Cavar v Secom Australia Pty Ltd (No 2)
[2021] FedCFamC2G 289
•26 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Cavar v Secom Australia Pty Ltd (No 2) [2021] FedCFamC2G 289
File number(s): SYG 1610 of 2020 Judgment of: JUDGE HUMPHREYS Date of judgment: 26 November 2021 Catchwords: PRACTICE & PROCEDURE – Application for costs – whether the applicant has frequently instituted or conducted vexatious proceedings in Australian Court – cost order made. Legislation: Federal Circuit and Family Court Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)
Fair Work Act 2009 (Cth)
Cases cited: Ashby v Slipper (No 2) FCAFC 67
Australian & International Pilots Association v Qantas Airways Limited (No 3) (2007) 162 FCR 392
Australian Workers Union v Leighton Contractors Pty Ltd and Ors (No 2) [2013] FCAFC 23
Baker v Patrick Projects Pty Ltd (No2) [2014] FCAFC 166
Butterworths Australian Legal Dictionary 1997
Cavar v Secom Australia Pty Ltd [2021] FedCFAMC2G 163
Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225
Garrett v Commissioner of Taxation [2015] FCA 117
Golowenko v Clime Investment Management Ltd ACN 067 185 899 [2021] FedCFamC2G 241
Kanan v Australian Postal and Telecommunications Union [1992] FCA 539
Saxena v PPF Asset Management Ltd [2011] FCA 395
Trustee for the MTGI Trust v Johnson (No 2) [2016] FCAFC 190
Division: Division 2 General Federal Law Number of paragraphs: 32 Date of last submission/s: 18 November 2021 Date of hearing: 18 November 2021 Place: Parramatta Counsel for the Applicant: There was no appearance on behalf of the Applicant. Solicitor for the Respondent: Mr Tass ORDERS
SYG 1610 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CELIA CAVAR
Applicant
AND: SECOM AUSTRALIA PTY LTD
Respondent
ORDER MADE BY:
JUDGE HUMPHREYS
DATE OF ORDER:
26 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The Applicant to pay the Respondent’s costs fixed in the amount of $17,718.00 within 28 days of the date of this order, or such other time as may be agreed between the parties
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 HUMPHREYS
INTRODUCTION
This judgment concerns an application for costs made by the respondent, Secom Australia Pty Ltd (“Secom”). This application follows the summary dismissal, pursuant to rule 13.10(1)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2001 (Cth) (“the Rules”), of an application made by Celija Cavar (“the applicant”) pursuant to the Fair Work Act 2009 (Cth) (“the Act”) and other Commonwealth legislation seeking reinstatement and compensation for unlawful dismissal, mental stress, harassment and bullying.
The applicant claimed that these matters arose out of her employment with Secom, as a taxi rank Security Guard. This judgement should be read in conjunction with the previous judgement on the substantive matter: Cavar v Secom Australia Pty Ltd [2021] FedCFAMC2G 163 (the substantive judgement).
Secom now seeks orders pursuant to s 570 of the Act and s 214(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCOA Act”) that the costs be paid by the applicant to the respondent specified in the amount $48,883.83 or such other amount as the Court deems reasonable in all the circumstances.
THE LAW
The Court recently set out the law in relation to costs in Fair Work matters in Golowenko v Clime Investment Management Ltd ACN 067 185 899 [2021] FedCFamC2G 241 at [7] to [27]. For convenience those paragraphs are reproduced here, with certain deletions of material not germane to the current case:
[7] Section 570 of the Act is as follows:
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.
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;
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.
[8] The Court now operates under new Rules contained within the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (“the Rules”). In so far as they relate to General Federal Law, the new Rules to a large extent replicate the previous Federal Circuit Court Rules2001 (Cth).
[9] Rule 1.04 of the Rules states as follows:
Overarching Purpose.
(1)The overarching purpose of these Rules, as provided in section 190 of the Act, is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.
(2)To assist the Court, the parties must:
a)avoid undue delay, expense and technicality; and
b)consider options for primary dispute as early as possible
[10] Rule 13.02(1) of the Rules reads as follows:
(1)If a party discontinues an application, or part of an application, another party to the proceeding may apply for costs.
[11] Rule 13.02(2) provides that a party may apply to the Court for an order for costs where the other party discontinues an application. Rule 21.02 of the Rules, as it was previously, is now reproduced as r 22.02 of the Rules. It and r 22.02 reads as follows:
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 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.
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;
Determination of maximum costs
(1)The Court may specify the maximum costs that may be recovered on a party and party basis:
a)by order at the first court date; and
b)on its own initiative or on the application of a party.
(2)However, an amount specified must not include an amount that a party is ordered to pay because the party:
a)has failed to comply with, or has sought an extension of time for complying with, an order or any of these Rules; or
b)has sought leave to amend a document; or
c)has otherwise caused another party to incur costs that were not necessary for the economic and efficient progress of the proceeding or hearing of the proceeding.
(3)The Court may vary the maximum costs specified if, in the Court’s opinion, there are special reasons and it is in the interests of justice to do so.
[12] It is common ground between the parties that where an order is made for the payment of costs, the manner in which the amount of those costs may be set is a discretionary matter for the Court. In this case three methods are available.
[13] The first being, an amount fixed by reference to the relevant Scales of Costs contained within the Rules…
[14] The second method, would be to refer to matter for as assessment/ taxation of costs on a party-party basis.
[15] The third method, and that sought by the respondent, would be to allow costs on an indemnity basis…
[16] The discretion to award costs pursuant to s 570 of the Act should be exercised with some caution. In Trustee for the MTGI Trust v Johnson (No 2) [2016] FCAFC 190 at [8] the following was said:
Section 570 of the FW Act confers discretion on the Court to order costs in Fair Work matters where proceedings were instituted vexatiously or without reasonable cause. Not only must this discretion be exercised judicially according to the terms defining it, it must be exercised with caution because of the exceptional nature of the power in an otherwise no-costs jurisdiction. The case for its exercise should be clearly demonstrated: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6].
[17] The relevant principles were summarised in Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23 at [7]:
(1)The purpose or policy of the section is to free parties from the risk of having to pay their opponents’ costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause.
(2)It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order.
(3)The relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed.
[18] That can be tested by asking whether the party bringing the action, on the facts apparent to the party and its lawyers, properly advised, should have known the claim had no reasonable prospects of success: (see; Baker v Patrick Projects Pty Ltd (No2) [2014] FCAFC 166 at [9]-[10].
[19] In relation to s 570(2)(b) of the Act, whether a party engaged in an ‘unreasonable act or omission’ will depend upon the particular circumstances of the case. In Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879 at [36] it was held that “prosecution of any incompetent or hopeless case can be regarded as ‘an unreasonable act’ … Conversely… the pursuit of a contentious, and ultimately unsuccessful argument is not an unreasonable act”….
[26] Once the power to award costs is enlivened under s 570(2) of the Act, the Court can make an order for costs to be paid on an indemnity basis, as it could, and often would, in litigation with the general law principles as to the award of such costs applied: (see; Shea v Energy Australia Services Pty Ltd (No 2) [2015] FCAFC 14 at [10]. In Torpia v Zarfati [2009] FMCA 166, Barnes FM noted at [14] that:
There is also authority … that indemnity costs should not be ordered in the absence of a presumption that the action was commenced for some ulterior motive or because of a wilful (as distinct from inadvertent) disregard of known facts or established law.
[27] The test as to whether indemnity costs should be awarded, is whether the justice of the case might so require or, whether there exists some special or unusual feature of the case to justice for the Court in departing from the ordinary practice: (see; Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879).
THE RESPONDENT’S SUBMISSIONS
In an Affidavit affirmed on 9 November 2021, Justine Marshman, Human Resources Manager for Secom, deposes that the legal costs incurred by Secom amount to $48,883.83. Attached to Ms Marshman’s Affidavit are invoices from two firms of Solicitors supporting this claim. It is alleged that the applicant forwarded multiple correspondence, submissions and four Affidavits that made inflammatory and irrelevant allegations of criminality and misconduct against Secom and its Solicitors that resulted in unnecessary and increased legal costs for Secom in the proceedings.
Also attached to Ms Marshman’s Affidavit is a copy of a letter dated 2 September 2020 from Capello Rowe, Solicitors to the applicant. That letter proposed by way of settlement that Ms Cavar discontinue the proceedings on the basis that Secom would not seek legal costs in the sum of $5,000.00 that had been incurred to date. The letter indicated if the proceedings were not discontinued Secom would seek to have the matter summarily dismissed and seek costs.
Following an unsuccessful mediation conducted by a Registrar of the Court, on 20 April 2021, Hunt and Hunt, the Solicitors who were now acting for Secom wrote to the applicant offering to settle the matter for the sum of $1,000.00, with each party to pay their own legal costs. In the letter, the solicitor’s stated that Ms Cavar’s claim was “inherently flawed, is unmeritorious, frivolous or vexatious and is doomed to fail”. The settlement offer was made on a commercial basis and if not accepted, the offer would be tendered to the Court in relation to the issue of costs.
Each of s 570(2)(a), (b) and (c) of the Act is disjunctive. If the Court is satisfied as to any one of these sections, then this would form the basis for an order to be made as to costs.
Section 570(2)(a) of the Act deals with vexatious proceedings. In Garrett v Commissioner of Taxation [2015] FCA 117 at [4], Pagone J found vexatious referred to proceedings that were “scandalous, which disclose no reasonable cause of action, which are oppressive, which are embarrassing, or which are an abuse of the process of the Court”. It was submitted that the applicant’s predominant purpose in instituting proceedings was to harass and embarrass Secom and not for the purpose of having the Court adjudicate on the issues to which they gave rise.
The applicant made repeated allegations of criminal conduct committed by officers of Secom, unrelated third parties, and Secom’s legal representatives without any independent or corroborative evidence to support the allegations. The applicant’s claim consisted of an unfounded narrative of criminal conspiracy at the hands of Secom.
In the alternative, it was submitted that the applicant instituted the proceedings without reasonable cause. At the time that the applicant instituted the proceedings they had no reasonable prospects of success. In Kanan v Australian Postal and Telecommunications Union [1992] FCA 539 at [473], Gibbs J stated:
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 appellant’s own version of the facts, it is clear that the proceedings must fail, it may be properly said the proceeding lacks a reasonable cause”.
It was submitted that the proceedings instituted by the applicant were entirely misconceived and unsupportable. The Court so found, at [41] of the substantive judgement in the matter. It was submitted that the claim was doomed to fail as it was fundamentally baseless and without reasonable cause.
It was further submitted that the applicant had acted in an unreasonable manner by her actions or omissions pursuant to s 570(2)(b) of the Act. This was due to actions in failing to resolve the matter efficiently and expeditiously. The applicant’s pursuit of her case which was “incompetent or hopeless” constituted an objectively unreasonable act: (see; Australian & International Pilots Association v Qantas Airways Limited (No 3) (2007) 162 FCR 392 at [32]).
Further it was submitted that the applicant should pay Secom’s costs on an indemnity basis if the Court were satisfied that there is “some special or unusual feature of the case to justify the Court departing from the usual practice” of ordering costs to be paid on a party party basis: (see; Colgate-Palmolive v Cussons Pty Ltd (1993) 46 FCR 225). In that case at [24] the Full Court indicated that the kinds of situations in which indemnity costs might be considered are where a litigant had:
a) Commenced or continued an action knowing that it had no chance of success;
b) Made false or irrelevant allegations of fraud;
c) Made groundless allegations which prolong a case; and
d) Imprudently refused an offer of compromise.
In this case, the applicant refused two offers of compromise. The second was a “Calderbank” offer of payment of $1,000.00 with each party to pay their own costs. It was submitted that the applicant’s unrepresented status should be ignored as she claims to have foreign legal qualifications and has prosecuted several claims previously in this area in Australian Courts and Tribunals.
In relation to the quantification of costs it was submitted that the sum of $47,883.83 was fair and reasonable for a person holding the position of Senior Associate and that sum reflected a discount of 10% to reflect fair and reasonable costs.
If the Court were minded to order costs pursuant to r 22.09 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (“the Rules”) by reference to the scale at Part 1 Schedule 2, these would amount to $14,754, plus the filing fee disbursement of $1000 in relation to the Application in a Case for Summary Dismissal. Secom further seeks the amount of $5,000.00 in relation to costs associated with the costs application reflecting the time to prepare and settle the Affidavit of Ms Marshman and written submissions.
THE APPLICANT’S SUBMISSIONS
The applicant did not appear at the hearing. The applicant initially advised the Court that she was unable to attend in person as she was not fully COVID 19 vaccinated. Arrangements were then made for the applicant to attend by MS Teams video or telephone link. Instructions on dialling in were sent to the applicant ahead of the hearing. Prior to the hearing and then in open Court, attempts were made to contact the applicant. The calls went through directly to voicemail. On the application of the respondent the Court determined to proceed with the matter, in the absence of the applicant pursuant to r 13.06(e) of the Rules.
The applicant relies upon no less than three separate Affidavits and written submissions filed on 27 October, 1 November and 8 November 2021.
The first submissions to a large extent, take issue with the substantive findings of the Court in ordering that the applicant’s claim be summarily dismissed. Interestingly, the following submissions appear in relation to the Court and is reproduced as it appears in the submission:
“He must be totally unfit, he exercises foreign law, most likely from muslim countries laws, and under the influence of his associate (who is specifically named but redacted from this judgement for privacy reasons) who sound to me as muslim background – no matter what specific country.”
The applicant goes on later in the submission that:
“Second act is breached by Judge Humphreys is Natural Justice-Judicial misbehaviour and Incapacity Act 2012, requires his removal based on his incapacity/mentally unfit to exercise the judicial functions”.
The applicant’s second submission denies that she has been vexatious and seeks fair, reasonable and proportionate to the importance and complexity of the issue, costs against the two solicitors who acted for Secom. The applicant accuses one of them of “dishonesty and disreputable conduct” and in breach of various Solicitor’s Conduct Rules. The applicant’s Affidavit of the same date accuses Secom of affray under s 93 of the Crimes Act 1900 (NSW). Further matters are raised which either have no relevance to the costs application, or are disjointed and difficult to follow.
The applicant’s third set of submissions are similarly misconceived, making reference at one point to the Criminal Procedure Act 1986 (NSW) as a basis for Secom “and his legal representative have to be charged, and bit (sic) their own costs”. The applicant goes on to state that:
“the applicant is a big victim of crime , organised by the respondent’s management what is proved with evidence which cannot be denible, and for that purpose as the respondent is an international company with office registered in Australia too, I applicant considering to allege and breach of international conventions, in particular discrimination against women”.
The applicant’s Affidavit of the same date raised further matters that are either irrelevant to the issue of costs, are misconceived, disjointed or difficult to follow.
CONSIDERATION
The appropriate starting point is the various conclusions in made in the substantive judgement. These include at [38] that the respondent Secom, terminated the applicant’s employment based on her poor performance, failure to comply with relevant policies and procedures and the use of inappropriate and aggressive language in her communications, and not the exercise of any workplace right by Ms Cavar. The applicant’s case consisted of bare assertions without any evidence to support them. At [41] the Court concluded that Ms Cavar’s case, even at its highest, did not have any reasonable prospects of success. The case consisted of a series of inflammatory allegations of criminal conduct and/or conspiracies including at the hands of organised crime by the respondent.
Section 570(2)(a) of the Act allows a Court to make a costs order where the proceedings have been instituted vexatiously or without reasonable cause. This is a high threshold and even if satisfied, the Court still retains a discretion not to award costs: (see; Australian Workers Union v Leighton Contractors Pty Ltd and Ors (No 2) [2013] FCAFC 23 at [7]-[8]).
An action may be deemed frivolous and vexatious if it is ‘so obviously untenable that it cannot possibly succeed, or is ‘manifestly groundless’ or so ‘manifestly faulty that it does not admit of argument”: (see; Butterworths Australian Legal Dictionary 1997 at [506]). Vexatious is also defined in s 7 of the FCFCOA Act to include a proceeding that is an abuse of the process of the Court or a proceeding instituted without reasonable cause.
In the Court’s view, given the findings made in the substantive matter set out above, the Court is satisfied that the requirements of s 570(2)(a) of the Act have been made out. The proceedings are vexatious. They were manifestly groundless and obviously untenable. They had no prospects of success. The unsubstantiated and scandalous allegations made by Ms Cavar constitute an abuse of process of the Court.
The Court is further satisfied that this case is an exceptional one such as to justify the Court to exercise its discretion to make a costs order: (see; Ashby v Slipper (No 2) FCAFC 67 at [35]), due to the conduct of the applicant in the groundless and scandalous allegations made by her and by refusing offers of compromise made on a commercial basis by the respondent.
The next matter that the Court must then consider, is on what basis a costs order should be made. Three options are open. The first is by reference to the relevant Court scale. The second would be an assessment on a party-party basis. The third would be indemnity costs as claimed in the amount of $47,883. 83.
The Court is conscious that the Act was deliberately legislated as a ‘no-costs’ jurisdiction which reflected a policy of protecting a party instituting proceedings from liability for costs. The Court is also conscious of the overall objectives of the Court as reflected in both FCFCOA Act and the Rules to resolve matters as economically as possible.
As a matter of discretion, the Court is of the view that an order by reference to the relevant Court scale is appropriate in all the circumstances. Such an order will still be significant in quantum and sends a clear message that litigants who commence frivolous and vexatious proceedings in the Fair Work jurisdiction of this Court should not expect to escape unscathed from the burden of a costs order.
The Court is satisfied that an order for costs in the fixed amount of $14,754.00 is the appropriate order. This is the amount set out in the written submissions of Secom. Added to this, should be a further amount of $1,964.00 in relation to the preparation and attendance at the hearing on this date. An amount of $1,000.00 should be added being the filing fee for the successful summary dismissal application. This makes a total of $17,718.00. That amount is to be paid within 28 days or such other time as may be agreed between the parties.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Associate:
Dated: 26 November 2021
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