Blood v Kareela Aviation Pty Ltd (No 2)
[2023] FedCFamC2G 494
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Blood v Kareela Aviation Pty Ltd (No 2) [2023] FedCFamC2G 494
File number: SYG 1512 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 16 June 2023 Catchwords: INDUSTRIAL LAW – Dismissal of proceedings brought under the Fair Work Act 2009 (Cth) – costs application – whether the respondent was entitled to an order for costs relevant considerations. Legislation: Fair Work Act 2009 (Cth) s 570
Federal Circuit and Family Court of Australia (General Federal Law) Rules 2022 (Cth) rr 1.07, 4.06, 22.02
Cases cited: Blood v Kareela Aviation Pty Ltd [2022] FedCFamC2G 432 Division: Fair Work Division Number of paragraphs: 22 Date of last submissions: 26 July 2022 Date of hearing: On the papers Place: Sydney Counsel for the Applicants: Mr A. Guy Solicitor for the Applicants: Australian Licensed Aircraft Engineers Association Solicitor for the Respondent: Norton White ORDERS
SYG 1512 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: DAVID ROBERT BLOOD
First Applicant
AUSTRALIAN LICENCED AIRCRAFT ENGINEERS ASSOCIATION
Second Applicant
AND: KAREELA AVIATION PTY LTD (ACN 001 693 812)
Respondent
order made by:
JUDGE CAMERON
DATE OF ORDER:
16 June 2023
THE COURT ORDERS THAT:
1.The respondent’s application for costs be dismissed.
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 CAMERON
INTRODUCTION
The first applicant, Mr Blood, was employed by the respondent, Kareela Aviation Pty Ltd (Kareela Aviation), initially under the Airline Operations – Ground Staff Award 2010 and then, from 4 May 2020 until his dismissal, by the Airline Operations – Ground Staff Award 2020 (collectively Award) and at all relevant times was a member of the second applicant, the Australian Licenced Aircraft Engineers Association (Association). The applicants commenced this proceeding seeking declarations that Kareela Aviation had contravened the Fair Work Act 2009 (Cth) (FW Act), pecuniary penalties and financial compensation for Mr Blood.
On 2 June 2022 the application was dismissed: Blood v Kareela Aviation Pty Ltd [2022] FedCFamC2G 432 (First Judgment), at which time Kareela Aviation foreshadowed the possibility of a costs application. In an email to the Court dated 27 June 2022 Kareela Aviation sought its costs of the proceeding. On 29 June 2022 the Court made the following orders by consent:
1.The applicants file and serve written submissions by 15 July 2022.
2.The respondent file and serve written submissions in response by 25 July 2022.
The Court also noted that the parties had agreed that the Court could determine Kareela Aviation’s application for costs based on written submissions and without an oral hearing.
These reasons concern that application for costs.
BACKGROUND FACTS
In the First Judgment it was recorded that:
4The applicants alleged that on 15 December 2020, Trevor Breed, Kareela Aviation’s managing director, told Mr Blood that he was being made redundant because Kareela Aviation had no work and that on 16 December 2020 Kareela Aviation terminated Mr Blood’s employment. They alleged that at no time on 16 December 2020 was the Association notified or consulted in respect of the redundancy decision.
…
6The applicants alleged that Kareela Aviation had contravened sub-cls.32.1, 32.2 and 32.4 of the Award by failing to discuss, in advance, with him or the Association its decision to make him redundant, by failing to provide him or the Association with all information relevant to its decision to make him redundant before taking that decision, and by failing to give him and the Association the opportunity to make suggestions that might have avoided the dismissal. The matters that the applicants alleged could have been raised were:
(a) reduction of hours;
(b) use of annual leave;
(c) use of long service leave; and
(d) other matters that might have evolved from the consultation process.
Clause 32 of the Award set out the obligation to consult “about major workplace change” arising out of
… a definite decision to make major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees … .
It was found that no obligation to consult Mr Blood arose because, in the circumstances, the Award did not impose one and that even if it had, Mr Blood:
… was told of the decision and of the effect that it would have on him, at least in the employment context. His retort that he did not want to be dismissed was noted and the terms of the redundancy discussed. He was given the 16 December 2020 document and on 18 December 2020 the draft deed of release. Those documents set out, with differing levels of detail, the decision and its financial particulars. Even assuming that cl.32 had applied to Mr Blood’s dismissal, the clause required no more in his case than was in fact done. (at [46])
It was also found that, in the circumstances, there had been no obligation to hold discussions with the Association or its relevant officer, Mr Re.
LEGISLATION
Because the proceeding was based on rights said to arise out the FW Act, the Court’s power to order costs is to be found in the FW Act and, in particular, in s.570 which relevantly provides:
570 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; or
(b)the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; …
The Federal Circuit and Family Court of Australia (General Federal Law) Rules 2022 (Cth) (Rules) relevantly provide:
22.02 Order for costs
(1) An application for an order for costs may be made:
(a) at any stage in a proceeding; or
(b) within 28 days after a final decree or order is made; or
(c) within any further time allowed by the Court.
(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.
RESPONDENT’S SUBMISSIONS
Kareela Aviation submitted that the case was contested solely on the issue of a failure to consult and that that contention had been devoid of merit because:
(a)Mr Breed had advised Mr Blood that he was considering making him redundant;
(b)Mr Breed raised the issue of Mr Blood’s misconduct;
(c)Mr Breed offered Mr Blood a redundancy;
(d)Mr Breed gave him an opportunity to consider taking a voluntary redundancy;
(e)Mr Blood did not request a support person;
(f)Mr Blood chose to accept a redundancy; and
(g)Mr Re, from the Association, was contacted by Mr Blood after he had already consulted with Mr Breed and accepted a voluntary redundancy and did not adduce any evidence that Mr Blood sought, and was denied, an opportunity to have a representative at the consultation.
Kareela Aviation submitted that:
It ought to have been apparent to the applicants at the outset that the application was commenced without reasonable cause on the basis that Mr Blood was consulted in relation to the decision and Mr Blood did not request the representation of ALAEA at the consultation. The facts surrounding these findings were not contentious.
Kareela Aviation also submitted that it had been unreasonable of the applicants to continue the proceeding once they were served with Mr Breed’s evidence, which supported the finding that there had been no major change at Kareela Aviation which would trigger the requirements for a consultation under cl.32 of the Award.
APPLICANTS’ SUBMISSIONS
The applicants submitted that Kareela Aviation had sought costs without a formal application or warning and that, although they had consented to the filing and service of submissions and to the determination of the matter on the papers, they sought the dismissal of the costs application by reason of its informality. They submitted that because no “formal application” had been made, the Court was not empowered to make the orders sought.
The applicants submitted that in any event their application had not been vexatious and that Kareela Aviation had not suggested that the predominant purpose of their conduct had been to harass or embarrass it. They further submitted that their action had not been brought without reasonable cause in the sense that it had not been manifestly groundless, so untenable it could not possibly succeed or disclosed a case which the Court considered could not succeed. It was submitted that to make out the latter argument the Court needed to be satisfied that at the time of instituting the proceeding, it ought to have been clear to the applicants that their case would fail. In that regard it was submitted that the question whether the termination of Mr Blood was a “significant change” and whether Mr Blood was consulted about the changes were live issues that warranted consideration by the Court and that whether there had been an obligation to consult with the Association was one that had not, at that point, been considered by a court or tribunal.
The applicants submitted that the pursuit of a contentious argument is not, simply because it is ultimately unsuccessful, an unreasonable act.
CONSIDERATION
Informality of application for costs
When judgment was delivered, Kareela Aviation foreshadowed the possibility of a costs application and was referred to r.22.02 of the Rules which, relevantly, provides for an application for costs to be made within 28 days of judgment, which is what happened in this case. Although the Rules do provide in r.4.06 that interlocutory applications are to be made in accordance with the approved form and supported by affidavit evidence, r.1.07 provides that the Court may, in the interests of justice, dispense with compliance with any of the Rules.
Particularly following extempore judgments, it is commonplace for costs applications to be made orally and instanter upon the delivery of judgment and without an affidavit in support, except if evidence is necessary for the assessment of the amount to be awarded. Even after some reserved judgments costs can be dealt with on the spot. In this case, the parties’ arguments have been based on the facts recited in the First Judgment and on matters of shared experience, such as the foreshadowing of a costs application on the last occasion. No affidavit evidence has been necessary. Significantly, the applicants have not contended that they would suffer any prejudice from the application being made in correspondence, rather than by way of a court form and it is difficult to think what could have been said in a form that was not said in the parties’ written submissions.
The consent orders made on 29 June 2022 are also to be noted. If an objection to costs being determined without the filing of a written application was to be made, it should have been made before the applicants agreed to the consent orders. Any objection that the applicants might have made to the absence of a written application has been superseded by those consent orders. It is now too late to pursue that issue.
In the circumstances, I conclude that it is in the interests of justice that the question of costs be determined now and, as the parties have been content to deal with it, based on their written submissions. I dispense with the requirement in r.22.02 of the Rules that Kareela Aviation file an application in proceeding
Entitlement to costs
I am not persuaded that the initiating application was doomed to failure or that it was unreasonable to pursue it. The correct application of cl.32 of the Award was not necessarily obvious. It was arguable that Kareela Aviation’s decision to make Mr Blood’s position redundant and dismiss him as a consequence would produce “major changes” at the business that would have significant effects on its employees, including but not limited to Mr Blood. The resolution of those issues was not foretold and depended, at least in part, on the evidence that was led and what accounts were given decisive weight. Similarly, whether Mr Breed’s version of events, and in particular whether his consultations with Mr Blood were sufficient to satisfy cl.32 of the Award, in the event that it applied, depended on the Court’s view of the evidence.
Finally, the circumstances in which an employer is required to engage with the Association as the representative of a particular employee was, apparently, a novel question, the correct answer to which was open to debate.
CONCLUSION
For the above reasons, I am not persuaded that the Court’s powers under s.570 of the FW Act are engaged.
Consequently, the application for costs will be dismissed.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 16 June 2023
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