FEDERAL COURT OF AUSTRALIA
Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194
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- Case
- [2020] FCAFC 194
- Decision Date
CaseChat Overview and Summary
The court examined the statutory context of the Fair Work Act and the rationale underpinning section 570, which provides a "no costs" jurisdiction. The court found that the circumstances in which an applicant in Fair Work Act proceedings should be required to provide security for a respondent's costs are likely to be exceptional. The court emphasised that an applicant should not ordinarily be required to provide security for costs that would not be payable in the absence of unsatisfactory conduct on their part. The court also noted the importance of not undermining the terms and rationale of section 570 by requiring someone other than the applicant to provide security for a respondent’s costs. The court considered that the policy rationale for section 570 should not be undermined by indirect means, such as ordering security from a person other than the applicant when it is the applicant who will bear the burden of the security.
Ultimately, the Full Court concluded that the primary judge had overlooked critical considerations related to section 570. The court held that the primary judge exercised the discretion without regard to the impact on the respondents and the implications of section 570. The Full Court allowed the appeals, set aside the orders made by the primary judge, and dismissed the interlocutory application for security for costs with costs.
The final orders included granting leave to appeal, allowing the appeals, setting aside the primary judge's orders, dismissing the application for security for costs, and ordering the respondents to pay the applicant’s costs of the application for leave to appeal and of the appeal.
Orders
Orders of the court
1. Leave to appeal against the orders of the Court on 28 October 2019 be granted in the form of the draft notice of appeal relevantly exhibited to the affidavit of Neill Curtis Brennan dated 8 November 2019.
2. The said draft notice of appeal stand as if filed.
3. The appeal be allowed.
4. The orders of the Court on 28 October 2019 be set aside and in lieu thereof it be ordered that the interlocutory application for security for costs be dismissed with costs.
5. The respondents pay the applicant’s costs of the application for leave to appeal and of the appeal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
As is apparent, in these passages the Judge was addressing the antecedent question concerning the appropriateness of a commercial litigation funder being required to pay the costs of a successful respondent.Consideration In my view, a number of implications of present relevance can be drawn from the statutory context of the FW Act, from s 570, and from the rationale which underpins s 570. First, and perhaps most obviously, the circumstances (if any) in which an applicant in proceedings in relation to a matter under the FW Act should be ordered to provide security for a respondent’s costs are likely to be exceptional. An applicant should not ordinarily be required to provide security for costs which, in the absence of unsatisfactory conduct on his or her part, will never be payable. Secondly, care should be exercised to ensure that both the terms and rationale of s 570 are not undermined by requiring persons other than the applicant to provide security for a respondent’s costs in a proceeding to which s 570 applies. That would obviously be the case if an order was made that the applicant’s proceeding be stayed or dismissed if the ordered security is not provided. It could hardly be appropriate for a court to order a stay of proceedings until some person other than the applicant has provided security for a respondent’s costs. Related to this is the consideration, explained in the reasons of the Chief Justice, that an order for the provision of security is not like other orders of the Court for payment of a monetary sum. They are not enforceable in the manner of a monetary judgment. Such orders are instead made in the control of the conduct of litigation in the Court. It is rare for an order for security to be made unless accompanied by some consequence in the proceeding. Thirdly, the policy rationale for s 570 and its effect should not be undermined by indirect means, for example, by an order for the provision of security by a person other than the applicant when it is the applicant who will bear the burden of the provision of the security. The Court should not allow, let alone assist, a respondent to bring about indirectly a situation which would not be permissible by direct means. Section 570 also gives rise to other implications which are not presently relevant. For example, the costs which a party is required by s 570 to bear personally should not be capable of recovery as a component of damages in a second action brought by that party: Anderson v Bowles [1951] HCA 61, (1951) 84 CLR 310 at 323; Russell v The Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2008] NSWCA 217, (2008) 72 NSWLR 559 at [48]‑[49]. In my respectful opinion, the primary Judge overlooked the first three matters to which I have just referred. Paragraphs [77]‑[80] of the Judge’s reasons indicate that his Honour exercised the discretion by considering the justice of ordering a litigation funder to provide security as a freestanding matter, that is, by reference to AVL’s role in the respective proceedings and by reference to its commercial interest. The Judge did not have regard to the impact on Mr Turner and the group members of the order that AVL provide security and did not have regard to the implications to be drawn from s 570 identified above.