Alvarez Nino v Kuksal (No 6)
[2024] FedCFamC2G 627
•2 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Alvarez Nino v Kuksal (No 6) [2024] FedCFamC2G 627
File number(s): MLG 806 of 2021
MLG 807 of 2021
MLG 808 of 2021
MLG 809 of 2021
MLG 810 of 2021
MLG 811 of 2021
MLG 812 of 2021
MLG 813 of 2021Judgment of: JUDGE FORBES Date of judgment: 2 August 2024 Catchwords: FAIR WORK – costs - small claims procedure– where applicants wholly successful – where applicants are foreign students represented by legal centre – where solicitors and counsel represented applicants pursuant to costs agreements - whether conduct of the respondent caused applicants to incur costs unnecessarily – where respondent made multiple recusal applications and pressed unmeritorious defences – where respondent abandoned final trial - respondent to pay applicants’ costs – where costs should be fixed Legislation: Fair Work Act 2009 (Cth) s 545, 548, 550, 570
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 22.02, 22.14
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 190 – 192
Federal Court of Australia Act 1976 (Cth) s 37M, 37N
Cases cited: ABCC v CFMEU [2019] FCAFC 36
Alvarez Nino v Kuksal [2022] FedCFamC2G 401
Alvarez Nino v Kuksal (No 2) [2022] FedCFamC2G 548
Alvarez Nino v Kuksal (No 3) [2022] FedCFamC2G 650
Alvarez Nino v Kuksal (No 4) [2023] FedCFamC2G 1051
Alvarez Nino v Kuksal (No 5) [2024] FedCFamC2G 203
Attorney-General v Wentworth (1988) 14 NSWLR 481
Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194
Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879
Australian Workers Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23
Beer v Lim & Anor [2012] FMCA 524
Carbone v James McConvill and Associates Pty Ltd [2019] FCA 1305
Carbone v James McConvill and Associates Pty Ltd (No 2) [2019] FCA 1594
Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115
Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3) [2017] FCA 810
Holland v Nude [2012] FWAFB 6508
Murdock v Virgin Australia Airlines Pty Ltd (No 3) [2024] FCA 227
Ryan v Primesafe [2015] FCA 8
R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470
Saxena v PPF Asset Management Ltd [2011] FCA 395
Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190
Division: Division 2 General Federal Law Number of paragraphs: 67 Date of hearing: On the papers Place: Melbourne Counsel for the Applicants: Mr Bunce Solicitor for the Applicants: JobWatch Inc Respondent: No appearance ORDERS
MLG 806 of 2021
MLG 807 of 2021
MLG 808 of 2021
MLG 809 of 2021
MLG 810 of 2021
MLG 811 of 2021
MLG 812 of 2021
MLG 813 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: WILMER JAHIR ALVAREZ NINO
First Applicant
ANA MELISA GARCIA CALVO
Second Applicant
JUAN CAMILO RIOS LONDONO (and others named in the Schedule)
Third Applicant
AND: SHIVESH KUKSAL
Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
2 AUGUST 2024
THE COURT ORDERS THAT:
1.The Respondent pay the Applicants’ costs to be fixed in the sum of $100,000.
2.The Respondent pay the costs referred to in Order 1 above to the Applicants’ solicitor within 28 days of the date of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE FORBES
In the next chapter in these eight related small-claims[1] proceedings, the applicants seek an order that the unsuccessful respondent, Mr Shivesh Kuksal, pay their costs of the litigation, calculated on a standard basis in accordance with the scale set out in Schedule 2 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (the Rules). The applicants also seek certification pursuant to r 22.14 of the Rules that it was reasonable for them to have engaged counsel to appear for them in the proceedings.
[1] Each of the applications was heard under the small claim procedure pursuant to s 548 of the Fair Work Act 2009 (Cth)
On 24 November 2023 I delivered judgment for each of the applicants against the respondent. For the reasons set out in Alvarez Nino v Kuksal (No 4) [2023] FedCFamC2G 1051 (Kuksal (No 4)) Mr Kuksal was ordered to pay compensation to the applicants pursuant to s 545(2)(b) of the Fair Work Act 2009 (Cth) (FW Act) for the underpayment of wages and superannuation as claimed in their respective amended applications.
On 15 January 2024 the applicants made an application for costs.
On 16 January 2024 Mr Kuksal made two applications - an application for the final judgment to be set aside and an application seeking my recusal from hearing the set-aside application. Orders were made for the filing of written submissions and affidavits. Both applications were listed for hearing on 16 February 2024.
On 16 February 2024 I dismissed the two applications made by the respondent for the reasons set out in Alvarez Nino v Kuksal (No 5) [2024] FedCFamC2G 203. I also ordered the parties to file written submissions and any reply on the matter of costs, to be determined on the papers.
The applicant filed submissions on costs on 23 February 2024. Despite being afforded the opportunity to do so, Mr Kuksal did not file any submissions on costs.
Having considered the applicants’ written submissions, I have decided that the respondent should pay the applicants’ costs. After taking into account the calculation set out in Appendix A to the applicants’ submissions and reflecting on my own experience of this long running and complex litigation, I have decided to fix the applicants’ costs in the sum of $100,000. My reasons are set out below.
COSTS
Much of the relevant background to this matter is contained in the preceding five judgments[2], including the final liability judgment delivered on 24 November 2023, Kuksal (No 4). These reasons assume a familiarity with the earlier judgments.
[2] Alvarez Nino v Kuksal [2022] FedCFamC2G 401; Alvarez Nino v Kuksal (No 2) [2022] FedCFamC2G 548; Alvarez Nino v Kuksal (No 3) [2022] FedCFamC2G 650; Alvarez Nino v Kuksal (No 4) [2023] FedCFamC2G 1051; Alvarez Nino v Kuksal (No 5) [2024] FedCFamC2G 203
However, the proceedings also had a unique dynamic all of which can never be captured in a written judgment. As the parties will be aware the proceedings were punctuated with numerous applications and rulings which were dealt with in the running. At times the proceedings were chaotic and hostile. They were certainly needlessly complicated and protracted. The conduct of the litigation by the parties has informed my attitude to the costs application.
The applicants (collectively) claim a total of $116,962.01[3] in costs pursuant to sections 570(2)(a) and/or 570(2)(b) of the FW Act.
[3] See Appendix A to the Applicants’ written submissions on costs dated 23 February 2024
Legal principles
Section 570 of the FW Act states:
Costs only if proceedings instituted vexatiously etc.
1.A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
2.The party may be ordered to pay the costs only if:
a. the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause;
b. or the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
c. the court is satisfied of both of the following:
i.the party unreasonably refused to participate in a matter before the FWC;
ii.the matter arose from the same facts as the proceedings.
Ordinarily, costs will not be awarded in proceedings brought under the FW Act. Costs will usually be borne by the party incurring them[4].
[4] Murdock v Virgin Australia Airlines Pty Ltd (No 3) [2024] FCA 227 (Murdock v Virgin Australia (No 3)) at [3] (Burley J); Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115; Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194
The legislative intent underlying s 570 is that potential applicants should not be put off from commencing proceedings due to a fear of costs being incurred if they are unsuccessful[5]. In an otherwise no-costs jurisdiction, the discretion to order costs must be exercised with caution[6]. A clear case for its exercise must be demonstrated. Even where the threshold is met, the Court retains a discretion.
[5] Murdock v Virgin Australia Airlines Pty Ltd (No 3) at [3] (Burley J); Ryan v Primesafe [2015] FCA 8; Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ)
[6] Murdock v Virgin Australia Airlines Pty Ltd (No 3) at [3] (Burley J); Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J)
Particular caution should be exercised when considering an application for costs in relation to proceedings which are being conducted under the small claims procedure set out in section 548 of the FW Act. As I have remarked in previous judgments during the course of this proceeding, the small claims procedure was designed to promote the efficient and cost-effective resolution of small underpayment claims. Section 548 relaxes the rules of evidence and procedure and there is a requirement for the Court to act in an informal manner and without regard to legal forms and technicalities[7]. During the course of these proceedings I have repeatedly emphasised this objective to the parties as well as reminding them of the overarching obligations set out in s 190 – 192 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFCOA Act) which requires the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
[7] Fair Work Act 2009 (Cth) s 548(3)(b)
Even though the general rule is that FW Act proceedings, and particularly small claims proceedings, should be heard on a no-costs basis, the Act allows a departure from that rule. I see no reason why litigation conducted under the small claims procedure should not be amenable to an award of costs where a clear case for departure from the general rule is made out.
To be seized of the discretion to order costs the Court must be persuaded that one of the limbs of s 570(2) has been engaged.
Section 570(2)(a)
Paragraph (a) of subsection 570(2) is engaged where the Court is satisfied that a party instituted the proceedings vexatiously or without reasonable cause.
Proceedings will have been instituted vexatiously if they were instituted to harass or embarrass the other party or to gain a collateral advantage[8].
[8] Attorney-General v Wentworth (1988) 14 NSWLR 481at 491; Holland v Nude [2012] FWAFB 6508 at [7]
In determining whether proceedings were instituted without reasonable cause, the relevant question is whether the proceeding had reasonable prospects of success when it was instituted, not whether it ultimately failed[9]. The purpose of this subsection is to protect parties from the risk of paying their opponents’ costs arising under the FW Act, while protecting the parties who are forced to defend proceedings instituted without reasonable cause[10].
[9] Australian Workers Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23; R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J; Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]
[10] Australian Workers Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23
In the present case the issue of whether proceedings have been instituted vexatiously or without reasonable cause should not be focused only on the substantive claims commenced by the applicants. As will be obvious from the judgement in Kuksal (No 4), I was satisfied that those claims were meritorious and the applicants were completely successful.
However, during the proceedings up to final judgment, and subsequently, the respondent also instituted numerous applications which are to be tested against the threshold in s 570(2)(a) of the FW Act. As I will go on to explain later in these reasons, I am satisfied that Mr Kuksal instituted many applications during the hearings which, if not vexatious, were certainly without reasonable cause and were doomed to failure.
Section 570(2)(b)
Section 570(2)(b) of the FW Act requires proof that:
a.the party against whom costs are sought has by its action(s) or omission(s), behaved unreasonably; and
b.those unreasonable act(s) or omission(s) caused the other party to incur costs[11].
[11] Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3) [2017] FCA 810 at [25] (Katzmann J)
The meaning of “unreasonable” is inherently sensitive to context[12]. An important part of the context in the present matter is that the applicants elected to pursue their claims through the small claims procedure. In doing so, it was a realistic expectation on their part that they and the respondent would conduct themselves within the bounds of informality, timeliness and cost effectiveness. That is not to say that legal or factual complications do not arise in small claims proceedings, but there is an expectation that parties will be mindful of proportionality when seeking to prosecute a point.
[12] ABCC v CFMEU [2019] FCAFC 36 at [18]
In his written submissions, Counsel for the applicants also submits that the reasonableness of the parties’ actions and omissions in a proceeding in this Court should be viewed through the lens of the overarching purpose and related obligations imposed by ss 190-192 of the FCFCOA Act. The applicants submit that approach has been adopted in the Federal Court where, in exercising its discretion on costs, the court has had regard[13] to equivalent obligations under ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth).
[13] See eg Ryan v Primesafe at [9], [51], and [66]; Carbone v James McConvill and Associates Pty Ltd [2019] FCA 1305 at [57] – [60]; Carbone v James McConvill and Associates Pty Ltd (No 2) [2019] FCA 1594 at [23] – [24]
The applicant for costs bears the onus of satisfying the Court that one or more of the criteria in s 570(2) are met. Determining whether a party acted unreasonably must be determined objectively according to the facts on a case by case basis[14].
[14] Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879
Applicants’ liability for the costs of representation
In all of the substantive proceedings which are the subject of the present costs application, each of the applicants was represented by JobWatch, a not-for-profit legal centre.
The applicants’ representative has informed the Court that JobWatch was engaged under a conditional costs agreement where payment of legal costs to JobWatch would only be required in the event of a “successful outcome”. The court has also been informed that senior and junior counsel were similarly engaged on conditional costs agreements.
In Kuksal (No 4), I found in favour of each of the applicants and made orders that they each be compensated by the respondent. The applicants submit, and I accept, that the judgment constitutes a “successful outcome” according to the agreement between the applicants and JobWatch[15]. Accordingly, each of the applicants will be liable to pay JobWatch if any costs are awarded to them in respect of the successful proceedings.
[15] Affidavit of John O’Hagan affirmed 15 January 2024 at [4]
The applicants submit that costs should be dealt with as a single sum across proceedings and ordered to be paid directly to JobWatch. The applicants have expressed a preference for this approach, to minimise any liability of the applicants to pay JobWatch in the event the respondent defaults on the costs order.
CONSIDERATION
The applicants submit that the Court should exercise its discretion under s 570(2)(b) of the FW Act and order that Mr Kuksal pay the applicants’ costs of the proceedings. The applicants submit that a costs order is justified because Mr Kuksal engaged in “multiple unreasonable acts and omissions”.
Further or in the alternative, the applicants submit that the Court’s discretion is enlivened by s 570(2)(a) by reason of Mr Kuksal making “multiple interlocutory applications vexatiously and without reasonable cause”.
For context, it is instructive to recall the circumstances which gave rise to these proceedings.
In April 2021, the 8 applicants instituted proceedings against Mr Kuksal and companies associated with him. The applicants were mainly international students, many from Spanish or South American backgrounds, who had been in Australia for varying periods, but most for less than 12 months. Each of the applicants claimed to have been employed by Mr Kuksal or by entities owned and controlled by him. They variously performed work between July 2017 and January 2018 performing cleaning, housekeeping and related duties in relation to guest accommodation operated by Mr Kuksal.
Five of the applicants claimed they were not paid for any work performed during the period of their employment and three claimed to have been underpaid. The amounts claimed by them were relatively small, ranging from $675 to $7,250, with the total amount claimed across all 8 applications being about $22,000. The applicants opted for the proceedings to be dealt with under the small claims procedure as outlined in s 548 of the FW Act.
As will be apparent from my previous judgments, these proceedings turned out to be anything but informal, efficient, timely or cost-effective. I will let the reasons in my earlier judgments speak for themselves. Those reasons lead to the inescapable conclusion that the conduct of the respondent significantly contributed to the prolongation, complexity and cost of the litigation. The applicants themselves were essentially blameless.
At [17] of his submission in support of this costs application, counsel for the applicants submitted as follows (omitting footnotes and references):
“Even with a hundred tongues, a hundred mouths, a voice of iron and, to these, brazen lungs, it would be difficult to fully articulate all of the unreasonable acts or omissions of the Respondent. Needless to say, the proceedings proceeded painfully at almost every step. All four of the published decisions in these proceedings catalogue the Respondent’s unreasonable acts and omissions, and/or applications made vexatiously and without reasonable cause. A selection of these are set out in chronological order in the table below.”
DATE EVENT 20 October 2021 Order made allowing Respondent to make an application for summary dismissal of the proceedings on the basis of professional misconduct by the Applicants’ representatives. Application not pursued. 7 February 2022 Respondent made oral submission for all applications to be summarily dismissed on various grounds. 17 February 2022 Respondent makes interlocutory application which sought Judge Forbes’ recusal from the matter. Application adjourned and then discontinued on 24 February 2022. 4 March 2022 Respondent issues a subpoena direction to Fair Work Ombudsman seeking the attendance of an officer to give evidence at hearing. Officer attended the court in response to the subpoena. Subpoena was not pressed. 15 March 2022 Respondent applies for an order that the proceedings be stayed for an application to the Federal Court of Australia seeking judicial review of previous interlocutory decisions made by Judge Forbes, declaratory relief and compensatory orders. The stay was not granted. 4 July 2022 Respondent makes oral application that Judge Forbes recuse himself from the matter. Matter was briefly adjourned to allow the Respondent time to properly articulate his grounds for the recusal application. Respondent was not present upon the resumption of the hearing. 4 July 2022 Respondent makes application for injunctive relief. He re- enters virtual court room and submits that Court should adjourn proceedings pending hearing of interlocutory application. If adjournment application is rejected, he will press application for recusal. The oral application was dismissed. 4 July 2022 Respondent objects to application made by Applicants requiring an adjournment and Orders requiring parties to file and serve relating to objections made for hearing on 29 and 30 August 2022. The Respondent did not file and serve any materials required. 29 August 2022 Respondent drops out of Microsoft Teams meeting just before Mr Howard Rapke is to make submissions regarding the cessation of his involvement. Matter was forced to stand down. Respondent re-joins meeting and make oral application to join Mr Rapke as party to the proceeding. Application was denied. 29 August 2022 Respondent makes another application for Judge Forbes recusal resulting in another adjournment. Application was denied. 29 August 2022 Respondent seeks another adjournment of the hearing due to lack of access to case files. This was denied. 29 August 2022 Email received from director of Erudite Legal requesting hearing to be adjourned due to officers of the company making an urgent applications to Supreme Court to restrain Mr Rapke. Respondent was to assist other parties with abovementioned applications. 29 August 2022 Respondent not in attendance upon resumption of hearing. 30 August 2022 Respondent not in attendance. 16 January 2024 Respondent filed application to set aside final orders. 24 January 2024 Respondent filed application for recusal of his Honour Judge Forbes. 8 February 2024 Respondent defaulted on orders to file submissions. 16 February 2024 Respondent’s applications dismissed for default. The time allocated for oral submissions was exceeded without the hearing of the applications.
I accept the submission. Indeed, it represents but a selection of the unreasonable acts and omissions and hopeless applications made by the respondent during the course of these proceedings.
For much of these proceedings Mr Kuksal conducted himself in a belligerent and disrespectful manner, often directly challenging the jurisdiction of the Court and embarking on long speeches in doing so. He spoke over the Court and the applicant’s representatives. Mr Kuksal accused the Court of bias and the applicant’s representatives of professional misconduct. He sought to undermine the authority of the Court by making unmeritorious recusal applications and by seeking adjournments on the threat of making applications to the Federal Court for judicial intervention. Not much came from any of this, save for the applicants being subjected to unnecessary delay, cost and inconvenience.
I again refer to the written submission of the applicants. At [18], counsel for the applicants notes that:
18.1 On multiple occasions, including 20 October 2021, 17 February 2022, 4 March 2022, multiple times on 4 July 2022, and on 16 and 26 January 2024, the Respondent made interlocutory applications which he did not pursue. The Applicants submit that it is evident that these applications were made strategically to delay and frustrate the proceedings with no intention of pursuing them, and therefore were vexatious or without reasonable cause.
18.2 Even in the most recent applications by the Respondent, while the Applicants’ costs application was already on foot for unreasonable acts or omissions and/or proceedings initiated vexatiously and without reasonable cause, the Respondent failed to act in a reasonable manner and initiated applications vexatiously and without reasonable cause.
The Respondent’s applications on 16 and 24 January 2024 sought very serious orders: the recusal of a Federal Judge and the setting aside of the judgment delivered after a two-day trial respectively. Orders were made by this Court, specifically setting out in notes contained in the Orders the very clear expectations of the Court for the efficient hearing of these applications in accordance with the overarching obligations set out in ss 190-192 of the Federal Circuit and Family Court of Australia Act 2021 and the requirements of the small claims jurisdiction as set out in s 548 of the Act.
These Orders required the Respondent to file submissions by 8 February 2024. The Respondent failed to do so, for his own applications. The Applicants duly filed their submissions, despite being an overstretched Community Legal Centre. Ultimately, not only did the applications themselves have a lack of sufficient prospects to justify the Respondent making them, but the Respondent further caused the Applicant to incur costs preparing submissions and appearing without making the necessary submissions himself.
Because the Respondent was in default of orders for his own applications, the applications were dismissed (notably after an hour or longer of various objections, question dodging, and repetitive submissions by the Respondent) and so the work performed by the Applicants (submissions, preparation for the hearing, appearance) was wasted. It is noted that, at that hearing, Counsel for the Applicants foreshadowed a costs application relating to those applications which forms part of the current application.
18.3 The Respondent consistently failed to comply with Court orders, which is “a matter for some seriousness” in relation to costs orders.
18.4 The general conduct of the Respondent during the numerous hearings was extremely disruptive, recalcitrant and repetitive, which unnecessarily extended the duration of each hearing.
18.5 The Respondent filed, at various stages of the proceedings, affidavits of hundreds of pages of largely irrelevant (and repetitive) material as well as extended submissions with page after page of block-quotes.
18.6 Throughout these proceedings, the Court has made multiple adjournments and other allowances to accommodate multiple interlocutory applications by the Respondent, in the context of the Applicants commencing proceedings in the small claims procedure, which is intended to be quick and informal, to minimise costs and delay.
18.7 Aside from the Beer v Lim question (on the availability of accessorial liability), it is submitted that the Defendant’s defence lacked merit and took as many points of argument as could be conjured up (rather than only those that were reasonably arguable).
18.8 In the final substantive judgment delivered in these proceedings, Forbes J held that the Applicant’s evidence and submissions were “effectively not challenged”, despite the protracted and convoluted progress of the proceedings. The Applicants submit that it follows from this that the Respondent conducted its defence in a way that failed to address the substantive claims and was intended to frustrate and delay the advancement of those claims. The Applicants submit that therefore the Respondent’s applications for that purpose were instituted vexatiously. Further, given no defence was properly advanced, many of the costs of proceedings were effectively and ultimately wasted.
Even allowing for some emotive advocacy in those submissions, it is difficult to quibble with the underlying facts and the force of the applicants’ arguments. The submissions are reinforced by my earlier judgments and by my own impressions and observations during the many court events.
I agree that objectively, many of the applications made by Mr Kuksal were unreasonable and never had any realistic prospect of success. Viewed in totality, I accept the submission that some interlocutory applications (such as recusal applications and adjournment applications to allow threatened applications to the Federal Court) were strategically placed to cause delay and to prevent the Court from engaging with the merit of the applications. Advancing hopeless applications to cause delay, knowing that the applicants were young and vulnerable and relying on support from a community legal centre, is properly described as vexatious. The inconvenience to the court, requiring ex tempore rulings and written reasons for interlocutory applications, also cannot be ignored.
To the above, I would add two other matters. First, the ambiguous state of Mr Kuksal’s representation during the proceedings added unnecessary complexity and confusion and was at times almost farcical. As I explained in Kuksal (No 4)[16], Mr Kuksal was at material times the beneficial owner and director of a legal practice which operated under a series of different names including The People Shop, New Edge Law and Erudite Legal. Mr Kuksal is not a lawyer or at least is not admitted to practice as such in Victoria. The legal practice was purportedly engaged to represent Mr Kuksal from time to time during the course of these proceedings, although the nature and scope of their engagement and role in this proceeding was often unclear. During the proceedings, various solicitors and firms associated with Mr Kuksal came on and went off the record, confusing both the Court and the applicants’ representatives. The Court had to waste time interrogating Mr Kuksal about the status of his representation and at times Mr Kuksal seemed unable to clarify whether he was represented or not.
[16] At [43] – [52]
Secondly, what is more difficult to describe, but is nonetheless real, is the aggregate effect of small discourtesies and delays which impacted the efficient hearing of these matters. I have mentioned elsewhere that this proceeding was extremely challenging from a case management perspective. Mr Kuksal was often late to join Microsoft Teams hearings, both at the start of the day or after adjournments. On numerous occasions he complained of connection issues or dropped out. Mr Kuksal frequently interrupted others, spoke out of turn and failed to adhere to court deadlines. He was invariably argumentative and obstinate. He was combative and often disrespectful of the applicants’ solicitor and counsel, accusing them of unprofessional conduct. This behaviour, which was a feature of the litigation from beginning to end, was unreasonable and subjected the applicants to delay, cost and inconvenience.
I am satisfied that the respondents conduct in these proceedings engages both limbs of s 570(2) of the FW Act and that the Court’s power to order costs is properly enlivened.
The applicants were wholly successful in this proceeding. I am satisfied that the respondent should pay each applicants’ costs of the proceeding and I will order that he do so. The applicants do not seek an order for indemnity costs. Accordingly, costs should be calculated in accordance with the scale in Schedule 2 of the Rules.
In terms of the proper quantification of costs, two matters need to be discussed.
The accessorial liability question
The applicants properly concede that not all applications by Mr Kuksal should be characterised as unreasonable or without reasonable cause. In particular the applicants concede that the hearing of Alvarez Nino v Kuksal [2022] FedCFamC2G 401 (Kuksal (No 1)) was necessitated in part by the amendment of the applicants’ claims and the need for the Court to determine a genuine controversy about accessorial liability in the small claims jurisdiction.
It is to be recalled that after an amendment to their applications, effected after the advice of counsel, each of the applicants alleged that if they were found to have been employed by a company owned and controlled by Mr Kuksal (rather than by Mr Kuksal personally) the Court should find that Mr Kuksal was “involved in” the contraventions of the employing entity within the meaning of section 550 of the FW Act, and is therefore, liable as an accessory. The applicants sought compensatory orders against Mr Kuksal in respect of that accessorial liability.
Mr Kuksal contended that the Court does not have jurisdiction, in a case being heard in the small claims procedures under section 548 of the FW Act, to make findings of accessorial liability or to make compensatory orders of the type sought by the applicants. Mr Kuksal objected to the Court’s jurisdiction and argued that the allegation of accessorial liability should be struck out or summarily dismissed. In support of submissions, Mr Kuksal relied on Beer v Lim & Anor [2012] FMCA 524 (Beer v Lim), an earlier ruling of this Court which held the Court did not have power to make an order against an accessory in a small claim proceeding.
I agree that the legal issue regarding accessorial liability and Beer v Lim was a legitimate and genuine controversy which fell to be determined in the course of these proceedings. No criticism can be directed at Mr Kuksal for taking the point because, prior to my judgment in Kuksal (No 1), the respondent had authority on his side.
Costs directly associated with the hearing of Kuksal (No 1) should be borne by the parties themselves.
Certification for the engagement of counsel
The applicants further submit that it was reasonable for the applicants to engage counsel to represent them in the proceedings, and requests that, as far as it is necessary, the Court issue a certificate to that effect under r 22.14 of the Rules. The applicants submit that a certificate should issue for the following reasons:
(a)addressing the actions and conduct of the respondent as set out above;
(b)the numerous complex interlocutory steps;
(c)the legal complexity in addressing Beer v Lim and the availability of accessorial liability in the small claims jurisdiction;
(d)eight proceedings were being heard together;
(e)the limited resources of Job Watch as a community legal service; and
(f)the availability of counsel on a conditional costs basis.
These were not vanilla proceedings and probably unlike any other previous small claims proceeding in this Court. Counsel ran the eight applications together and prepared common submissions. The range and number of interlocutory issues raised in the case required the experience of counsel.
I note also that the applicants seek the fee for only one counsel when both senior and junior counsel appeared together.
I do not require any further persuasion that this proceeding was one in which it was reasonable and appropriate for the applicants to have been represented by counsel and these reasons should be taken as my certification to that effect.
Previous costs orders
A costs order has already been made against the respondent on 24 February 2022 in relation to an adjournment necessitated by the respondent’s late filing of material in support of an interlocutory application that was then abandoned. The applicants submit that that order should be accounted for in, and replaced by, the orders the applicants seek in this application.
I agree that is a sensible course. The order for costs made on 24 February 2022 will be vacated, although the liability for costs will not. The costs ordered on that occasion will be accounted for in the orders I make in relation to this application.
Lump sum costs order
The applicants submit that costs should be awarded of $116,962.01, calculated pursuant to Schedule 2 of the Rules.
The applicants submit that they have calculated their costs conservatively in accordance with the scale. For example (as noted above) only one counsel’s fee is claimed where two appeared. The applicants emphasise that costs are not sought on an indemnity basis and the calculation does not take into account oral interlocutory applications.
The applicants submit that the amount of costs should be fixed forthwith, and not be subject to a further process of taxation, which might give the respondent further opportunity to engage in unreasonable conduct or to make vexatious or baseless applications. Moreover, the applicants submit that payment of a fixed amount can be directed to their solicitor under the conditional costs agreements, avoiding the complication of determining each individual’s liability for professional fees and individual taxation.
Pursuant to r 22.02(2) of the Rules, the court has a broad discretion with how to set costs:
(2) In making an order for costs in a proceeding, the Court may:
(a) set the amount of the costs; or
(b) set the method by which the costs are to be calculated; or
(c)refer the costs for taxation under Part 40 of the Federal Court Rules; or
(d)set a time for payment of the costs, which may be before the proceeding is concluded.
The applicants urge the Court to directly fix the amount of costs as provided for by r 22.02(2)(a) of the Rules.
In determining a fixed sum, the Court does not engage in a process of taxation or formal assessment. It is open to the Court to apply a much broader brush than would be applied on a taxation, but the approach must still be logical, fair and reasonable. The power to award a lump sum can be exercised when the Court considers that it can do so fairly between the parties where it has sufficient confidence that it can arrive at an appropriate sum on the materials available[17].
[17] See Harrison v Schipp [2002] NSWCA [22] per Giles JA and the cases cited therein
The overarching purpose of civil practice and procedure is to facilitate of the just resolution of disputes as quickly, inexpensively and efficiently as possible. In the context of a small claim this objective is best furthered by fixing costs. The costs and effort of a taxation would be disproportionate to the amounts claimed.
I have had regard to the calculations set out in Appendix A to the applicants’ written submission. I am satisfied that the calculation has been made in accordance with the correct schedule. I consider it appropriate to order a lump sum.
In fixing a lump sum which I consider to be fair and reasonable, I consider that an allowance should be made for some of the efficiencies and savings which I anticipate would have been achieved from running eight similar cases in parallel. The form of applications were similar and the submissions and representation were common across all eight. All the applications travelled as one, with evidence in one received as evidence in all others. I am also mindful of the quantum of the substantive claims (a total of just over $20,000) and the proportionality with the costs.
Taking all matters into account I have decided that the respondent should pay the applicants costs fixed in the sum of $100,000. The respondent should pay the costs to the applicants’ solicitor within 28 days of these orders.
I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 2 August 2024
SCHEDULE OF PARTIES
MLG 806 of 2021
MLG 807 of 2021
MLG 808 of 2021
MLG 809 of 2021
MLG 810 of 2021
MLG 811 of 2021
MLG 812 of 2021
MLG 813 of 2021Applicants
Fourth Applicant:
JUAN CAMILO PINEROS TORRES
Fifth Applicant:
LEONARDO FABIO HERNANDEZ ALARCON
Sixth Applicant:
GERALDINE TORRES AMEZQUITA
Seventh Applicant:
CAROLINA CORRALES RHENALS
Eighth Applicant:
NICOLAS MORENO RIVERO
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