Beattie v Price Sierakowski Pty Ltd
[2011] FMCA 431
•9 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BEATTIE v PRICE SIERAKOWSKI PTY LTD & ANOR | [2011] FMCA 431 |
| INDUSTRIAL LAW – Costs – s.570 of the Fair Work Act 2009 – where notice of discontinuance filed late in proceedings – whether the applicant acted unreasonably or vexatiously. COSTS – Costs of part of claim commenced under TPA and at common law. |
| Fair Work Act 2009, ss.341(a)(ii), 351, 570 Trade Practices Act 1974, ss.52, 53B, 82 Federal Magistrates Court Rules 2001 Federal Magistrates Act 1999, s.79 Workplace Relations Act1996, s.834 Industrial Relations Act 1988, s.347 |
| Imogen Pty Ltd v Sangwin (1996) 70 IR 254 Employees Union of Australia v Jackson and O’Sullivan Pty Limited [1957] 1 FLR 17 Jaycorp Pty Limited v Australian Builders Labourers Federated Union of Workers (WA Branch) [1993] 46 IR 301 Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 Saxena v PFF Assets Management Ltd [2011] FCA 395 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 |
| Applicant: | ROBERT JOHN BEATTIE |
| First Respondent: | PRICE SIERAKOWSKI PTY LTD (ACN 113 920 442) |
| Second Respondent: | CHECKSIDE PTY LTD (ACN 078 807 048) |
| File Number: | PEG 190 of 2010 |
| Judgment of: | Raphael FM |
| Hearing date: | 2 May 2011 |
| Date of Last Submission: | 6 May 2011 |
| Delivered at: | Sydney (Via video link to Perth) |
| Delivered on: | 9 June 2011 |
REPRESENTATION
| For the Applicant: | In person |
| Counsel for the First Respondent: | Ms K Levi |
| Solicitors for the First Respondent: | Price Sierakowski |
| Solicitors for the Second Respondent: | Moray & Agnew |
ORDERS
Applicant pay the Respondent’s costs in relation to its response to the applicant’s claims of breach of contract found in paragraphs 20(a), (b), (e), (f), (g) and (h) of the Statement of Claim and of its response to the allegation of breaches of s.52 and/or 53B of the TPA. These costs are to be taxed in accordance with O.62 of the Federal Court Rules and to be paid at 60% of the Federal Court scale.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
PEG 190 of 2010
| ROBERT JOHN BEATTIE |
Applicant
And
| PRICE SIERAKOWSKI PTY LTD (ACN 113 920 442) |
First Respondent
CHECKSIDE PTY LTD (ACN 078 807 048)
Second Respondent
REASONS FOR JUDGMENT
(Corrected Judgment)
On 18 October 2010 Mr Beattie commenced proceedings by way of application and claim under the Fair Work Act 2009 (“FWA”) alleging dismissal and contravention of a general protection, namely termination of the applicant’s employment in contravention of s.351(1) of the FWA. In his application he sought compensation amounting to six months remuneration (calculated in two different ways) and the imposition of a pecuniary penalty upon the respondent. Mr Beattie argued in Part G of the claim that:
“Termination of my employment was in contravention of s.351(1), as my employment was terminated as a result of:
My taking leave/time off from work due to family or carer’s responsibilities, or for reasons including the need to take leave/time off from work due to family or carer’s responsibilities; and/or
My decision to use part of my sick leave entitlement as carer’s leave, during the time that I had off to look after my wife following her surgery, which is contrary to the firm’s policy despite it being stipulated as an entitlement in my employment contract.”
The applicant also claimed in his Statement of Claim for a breach of contract insofar as the respondent failed to comply with specific terms of the written contract relating to “work life balance”, “billing targets’, “grievance procedures” and “an implied term of trust and confidence”.
On 10 December 2010 Mr Beattie filed an Amended Application together with a Statement of Claim in which he sought not only the relief claimed under the FWA but also damages under s.82 for breach of s.52 and/or 53B of the Trade Practices Act 1974 (“TPA”). The allegations in respect of the TPA Act arose out of certain representations Mr Beattie said were made to him by a firm of recruitment agents employed by the respondent. The Statement of Claim also pleaded a large number of additional alleged breaches of s.341(a)(ii) of the FWA that he claimed constituted the taking of adverse action against him by his employers.
The matter commenced in Perth and was case managed by Federal Magistrate Lucev although his Honour recused himself from the final hearing. That was scheduled to take place on 28 and 29 March 2011. On 24 March 2011 Mr Beattie advised the respondents that he intended to file a Notice of Discontinuance. The relevant provisions of the Federal Magistrates Court Rules 2001 (the ‘Rules’) relating to Notices of Discontinuance are contained in pt.13 div.13.1 r.13.01 and are relevantly set out:
“13.01
Discontinuance
“(1) A party may discontinue an application or response by filing a notice of discontinuance in accordance with the approved form.
(2) A notice of discontinuance may be filed:
(a) at least 14 days before the day fixed for the final hearing of the application; or
(b) with the leave of the Court or a Registrar, at a later time.
(4) A party filing a notice of discontinuance must, as soon as practicable, serve a copy of the notice on each other party in the proceeding.”
13.02
Costs
(1) If a party discontinues an application, or part of an application, another party in the proceeding may apply for costs.”
The applicant needed the leave of the court to file the Notice of Discontinuance and so he sent to the court a letter to which was attached a medical report. He did not send a copy of the medical report to the respondents. The respondent indicated that they had no objection to the applicant discontinuing the proceedings although made it clear that it would be seeking costs. The court arranged for the matter to be mentioned on 28 March. The applicant did not appear at the hearing on 28 March but the court determined it was prepared to grant leave for the matter to be discontinued and that one of the matters it took into consideration was the content of the medical report. It also took into account the respondent’s agreement to the late filing of the Notice subject always to the question of costs. The respondent requested a copy of the medical report, the applicant resisted this. The court determined that there was no forensic need for the respondent to see the report at that time given its consent to the filing of the Notice of Discontinuance. Obviously, if the applicant intended to use the contents of the report in some way in relation to the costs argument the report would have to be provided. The court fixed a date for the hearing of the respondent’s application for costs and both parties attended and provided the court with written submissions subsequent to the hearing.
It should be noted that in regard to Mr Beattie’s claim under the TPA the respondent brought a cross claim against the recruitment consultants in which, at paragraph 11, it pleaded the misrepresentation which Mr Beattie had alleged. That misrepresentation related to the number of billable hours per day Mr Beattie was expected to undertake. In the job description for the role that Mr Beattie had seen in his initial interview with the cross respondent a billable budget of 4 hours per day was set out. The respondent pleaded that the cross respondent was well aware that the billable hours per day required was 6.5.
The respondent seeks costs against the applicant upon a solicitor and own client basis or alternatively upon a party and party basis (there is no costs issue in relation to the cross claim). The applicant resists these applications for costs. The matter is complicated by the fact that the pleading relates to different causes of action in respect of which different rules apply. In regard to the claims under the TPA and for breach of contract the normal rule would be that costs follow the event. If a party discontinues proceedings, whether with the leave of the court or without, he is liable for the opposing party’s costs unless that rule is negated by some other statutory provision. This is the case in respect of claims under the FWA. Section 79 of the Federal Magistrates Act 1999 (“FMA”) is in the following form:
“Costs
(1) This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009 .
Note: See section 117 of the Family Law Act 1975 in relation to family law or child support proceedings. See section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act.
(2) The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.”
Section 570 of the FWA deals with the question of costs in proceedings under that Act. That section is in the following form:
“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) exercising jurisdiction 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.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 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; or
(b) 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 FWA;
(ii) the matter arose from the same facts as the proceedings.”
The respondent argues that the claim commenced by Mr Beattie is one which brings itself within the exceptions to the no cost rule and that it is apparent on the face of the material filed by the applicant that the case was both doomed to failure and if properly advised would never have been brought or continued. The respondent also maintains that it is an available inference that the action was commenced and/or continued by the applicant for an improper purpose stating:
“(a)At a directions hearing on 26 February 2011 the applicant commented to the court that he had never intended for his application to proceed as far as it had; and
(b)On the face of the material before the court the applicant’s case was doomed to failure.”
In the submissions made to me by both parties there is reference to what occurred in mediations, of which were there two. One before a Fair Work Commissioner and one ordered by this court before a Registrar. Submissions by both parties appeared to have ignored the provisions of s.34 of the FMA and in particular and s.34(4) which is in the following form:
“Mediation
(4) Evidence of anything said, or of any admission made, at a conference conducted by a mediator in the course of mediating anything referred under subsection (1) is not admissible:
(a) in any court (whether exercising federal jurisdiction or not); or
(b) in any proceedings before a person authorised by a law of the Commonwealth or of a State or Territory, or by the consent of the parties, to hear evidence.”
I do not propose to take into account any of the representations made concerning what was said in the mediation, firstly because I think that they are covered by s.34(4) of the FMA and secondly because the amount of money that a party may claim during the course of a mediation can have no bearing upon whether or not a party commenced the proceedings without reasonable cause. This is a matter to be determined:
“At the time the relevant proceedings were instituted. The fact that the party instituting the proceedings later discontinues them is therefore not a matter to be taken directly into account in the application of the section.” Imogen Pty Ltd v Sangwin (1996) 70 IR 254 (henceforth “Imogen”) per Ryan J at [261].
Insofar as the instant case is concerned, I should look at the Amended Application and, more particularly, at the Statement of Claim. This document commences by setting out the background to the applicant’s employment with the respondent dealing with the pre-employment interviews that he had and the offer that was made to him. It includes references to certain questions asked by Mr Beattie before accepting the employment and details of the employment agreement itself. At paragraph 20 it commences the recitation of the alleged breaches of the contract, the FWA and the TPA. The respondent argues that the Statement of Claim:
“(a)was pleaded in such a way as to mask; rather than illuminate the issues in dispute;
(b) failed to identify issues that were genuinely in dispute and present such issues clearly and succinctly;
(c) failed to disclose a complete cause of action to support each claim for loss;
(d) included material extraneous to any apparent issues in dispute and;
(e) was as a result unusually difficult to plead to.”
No particulars are provided of these allegations. I have read the Statement of Claim and to my mind the applicant (who was self-represented and, although a paralegal with some qualifications in law, is not an admitted solicitor of the Supreme Court of Western Australia) seems to have done a very passable job of identifying the nature of his claims by reference to both the statutory provisions that he believes were breached and the alleged failures of the respondent to comply with the terms of the contract which he had previously set out. I also note that the damages claimed are explained and are the relatively modest figure of $35,466.92. Some additional damages are claimed under s.82 of the TPA.
Whilst I understand the respondent would wish to put its position in as much detail as possible it should always be remembered that I have not tried the case and much of the complaint made by the respondent concerning the applicant’s lack of evidence or pleading is impossible to judge on the basis only of the affidavits filed. I have considered the authorities on s.570 and its predecessors. They affirm the general principle that the courts should be careful in the exercise of the discretion present in s.570. In Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 (CFMEU), their honours Tamberlin, Gyles and Gilmour JJ reasoned that exercise of the discretion in haste may discourage litigation due to a fear of adverse costs orders (referring to s.570’s predecessor s.834 of the Workplace Relations Act1996 at [29]). In Saxena v PFF Assets Management Ltd [2011] FCA 395, Bromberg J held that such orders should only be made in clear cases (see [6]). This sentiment is also found in Wilcox J’s treatment of s.347 of the Industrial Relations Act 1988 in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 in which he surmised (at [264]-[265]):
“It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
In that case, where summary dismissal was granted, cost orders were made in accordance with the above test. Other examples of when cost orders have been made in consideration of s.570 (or its predecessors) include:
Where the respondent failed to comply with a Court order and for the delay of three months in applying for a court order to rectify that failure: Saxena;
Where an applicant with representation had two amended statements of claim struck out for lack of reasonable cause: the applicant’s first further amended statement of claim was found to have no reasonable prospect of success, the second was struck out because deficiencies afflicting the first were not corrected (see [31]): AIPA v Qantas.
Where it was found an applicant’s failure to comply with court directions was unreasonable: AIPA v Qantas;
Where an application was withdrawn the day before the projected hearing: Imogen (referring to s.347 of the Workplace Relations Act 1996). In that case, the application was an appeal in essence against the trial judge’s findings of fact and was untenable. Ryan J held that in such situations “the Court may more readily conclude that it was not reasonable” (at [261]).
In contrast, cost orders have not been made where:
A defence was abandoned at a late stage but this alone did not qualify as an unreasonable act, even though that lateness may have resulted in the incurrence of costs to the other party: CFMEU at [29] – [30];
In CFMEU their honours stated (at [29]),
“As the authorities indicate, there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable.”
In that case, their honours considered that although the abandonment was late, it was “properly made and beneficial to the appellants” (at [29]). This was so even though further costs may have been incurred. Their honours further held that:
“The mere fact that it could have done so in a different or timelier fashion is not sufficient, in itself, to warrant the making of an adverse costs order against it, particularly where the usual practice in litigation arising from the WR Act is to make no orders as to costs.”
The instant case is analogous in that sense. I have opined above as to the merits of the applicant’s submissions, which have not been heard in full. I have also considered the fact that the applicant was unrepresented. In this case the applicant’s claim is not “clearly unreasonable” and has not been made vexatiously. I believe that in these circumstances it would be inappropriate to order costs, and that s.570 should apply.
In regard to the claims of breach of contract found in paragraph 20 I note that paragraphs 20(c) and 20(d) are complemented in the FWA claims but the balance would require a response and insofar as the applicant terminated the proceedings by issuing a Notice of Discontinuance he should be obliged to bear the costs of such response, being not just the pleading but the evidence necessarily required.
In regard to the Trade Practices claim, whilst it would appear on the face of the documentation to have had some merit it was also discontinued. The applicant’s submissions do not address these areas of his claim and in the circumstances I believe that any costs associated with the response to this part of the claim, but excluding the cross claim, should be paid by the applicant.
The respondent has sought that the costs be based on a solicitor and own client basis alleging that the applicant continued the claim for an improper purpose pointing to the various offers of settlement which I have determined not to take into consideration. The respondent also alleges that it would be open for the court to find that the applicant’s claim was continued in circumstances where, had he been properly advised, he should have known he had no reasonable chance of success: Employees Union of Australia v Jackson and O’Sullivan Pty Limited [1957] 1 FLR 17. It would appear from the pleadings and the evidence filed that there is a real issue in this case as to whether the applicant’s employment was terminated or whether he resigned. There were clearly other issues relating to the proper construction of the arrangements between the parties, the applicant’s performance of his obligations and the actions of the respondent in relation to his taking of leave including carer’s leave. These allegations and counter allegations are the stuff of employment claims. They do not appear to me to be untenable and I do not think it appropriate in relation to an application for costs in a case that has not been heard that the details of the evidence filed be examined minutely in order to try and determine who might have won. In any event, a decision on these matters is not made on the basis of who might have won but on the basis that a case was brought that should not have been: Jaycorp Pty Limited v Australian Builders Labourers Federated Union of Workers (WA Branch) [1993] 46 IR 301 per French J. Because of the restricted nature of this order for costs it would not be appropriate to order that they be calculated in accordance with sch.1 to the Rules. The best way of ensuring that the respondent receives no less and no more than that to which it is entitled under these orders is to have the costs taxed under Order 62 of the Federal Court Rules. But costs should not be paid at the Federal Court rate as the matter has been brought in this court. The order which I will make is therefore that the Applicant pay the Respondent’s costs in relation to its response to the applicant’s claims of breach of contract found in paragraphs 20(a), (b), (e), (f), (g) and (h) of the Statement of Claim and of its Response to the allegation of breaches of s.52 and/or 53B of the TPA. These costs are to be taxed in accordance with O.62 of the Federal Court Rules and to be paid at 60% of the Federal Court scale.
For the avoidance of doubt there will be no order for costs in relation to this application for costs as no party has completely succeeded.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Raphael FM
Date: 9 June 2011
CORRECTIONS TO JUDGMENT
The final line of Paragraph 16, which read “I would not go so far as to say this in the instant case,” has been removed.
Former Paragraph 17 which read:
“The Rules in relation to costs provide in pt.21 Order 21.02(2):
“(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 Order 62 of the Federal Court Rules or under Chapter 19 of the Family Law Rules; or
(d) set a time for payment of the costs, which may be before the proceeding is concluded.””
has been removed.
Former Paragraph 18 is now Paragraph 17 and has been amended by the inclusion of the words “for costs” to read: “For the avoidance of doubt there will be no order for costs in relation to this application for costs as no party has completely succeeded.” It previously read: “For the avoidance of doubt there will be no order for costs in relation to this application as no party has completely succeeded”.
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