Chen v Project Flow Pty Ltd
[2022] FedCFamC2G 291
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Chen v Project Flow Pty Ltd [2022] FedCFamC2G 291
File number(s): SYG 95 of 2022 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 8 April 2022 Catchwords: COSTS – Industrial law – application for costs incurred by applicant in applying for default judgment but which the applicant did not press after the respondent filed a response to Form 2 filed by the applicant – whether costs incurred by the applicant in applying for default judgment and in pressing for an order for the costs he had incurred caused by the unreasonable act or omission of the respondent – order for costs made. Legislation: Fair Work Act 2009 (Cth) ss 340(1), 570
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 169
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), Schedule 2
Cases cited: CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467 Division: Fair Work Number of paragraphs: 20 Date of hearing: 8 April 2022 Place: Sydney Solicitor for the Applicant: Mr D Garan of Berrigan Doube Lawyers, by telephone Counsel for the Respondent: Mr E Thompson, by telephone Solicitor for the Respondent: Yazbeck Law ORDERS
SYG 95 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: SIYUAN CHEN
Applicant
AND: PROJECT FLOW PTY LTD
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
8 APRIL 2022
THE COURT ORDERS THAT:
1.The application in the proceeding filed on 31 March 2022 is dismissed.
2.The respondent pay the applicant’s costs of that application set in the sum of $2,500.
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
(Revised from transcript)
On 31 March 2022 the applicant filed an application in a proceeding seeking, in effect, orders for default judgment. The background to that application is as follows.
On 25 January 2022 the applicant filed an application in this Court seeking relief under the Fair Work Act2009 (Cth) (FW Act). That application was accompanied by a Form 2, Part G of which sets out allegations of fact, very much along the lines a statement of claim would set out allegations of fact. The cause of action pleaded or alleged in Part G is a contravention by the respondent of s 340(1) of the FW Act. That, at any rate, is the principal claim made in Part G.
The application and the Form 2 were served on the respondent on 2 February 2022. That is based on an affidavit of service which was filed with the Court on 11 February 2022. The matter came before me on a first court date. Mr Garan appeared for the applicant, and Mr Bodon, acting as agent, appeared for the respondent. On that day I made orders, first, that the respondent file and serve its response to the Form 2 filed by the applicant by 25 February 2022, and that the matter be referred to a Registrar for mediation on a date to be fixed by the Registrar pursuant to s 169 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (FCFC Act). The respondent did not comply with the orders made on 15 February 2022, but on 1 April 2022 filed its response. That occurred one day after the applicant filed the application for default judgment.
There are a number of observations to be made about the response. It contains a paragraph which denies the entirety of the alleged contraventions. That form of pleading or response does not engage with the allegations made in the Form 2. The response also makes a positive allegation which, presumably, is raised to say that there was no adverse action; but on its face the document which is filed as a response does not really illuminate the entirety of the respondent’s intended defence.
The respondent’s solicitor, Mr Yazbeck, filed an affidavit made on 5 April 2022. That affidavit has been filed to provide information on the basis of which an assessment can be made as to why a response was not filed as required by my orders, and the reasonableness of any explanation that might arise from that evidence. In his affidavit Mr Yazbeck says that on 3 March 2022 he received “preliminary instructions” in this matter; that between 3 March 2022 and 9 March 2022 he received further instructions; and that between 9 March 2022 and 1 April 2022 he attempted to arrange a teleconference with Mr Garan to explore a resolution of the matter by way of the mediation that was scheduled for 8 April 2022. Mr Yazbeck says that the purpose of his doing so was to avoid incurring further costs, and in support of that general statement Mr Yazbeck annexes email communications between him and Mr Garan. In any event, as I have noted before, no response had been filed and, on 31 March 2022, the applicant filed an application for default judgment.
By email sent on 5 April 2022, Mr Garan informed Mr Yazbeck that the applicant was prepared not to proceed with the application for default judgment but, on the basis that the respondent pay the applicant’s legal costs, which were said to be $3,147. That was not accepted, and it is unnecessary for me to go to the evidence to say whether that was, in effect, explicitly rejected.
Before me today Mr Garan submitted that an order for costs should be made. He submits that the explanation given by the respondent is not reasonable. Mr Garan relies on the fact that an offer was made on 5 April 2022, some four days after the respondent filed a response to the Form 2. He also pointed to the history of this matter preceding the commencement of this proceeding in the Fair Work Commission (FWC), where two conciliation conferences were appointed but at neither of which did anyone on behalf of the applicant appear. That, however, is not a matter which I will take into account.
Mr Thompson, who appeared for the respondent, submitted that an order for costs should not be made in favour of the applicant and, indeed, an order for costs of today’s hearing should be made against the applicant. He relies on three matters. The first is that the applicant, by accepting that the application for default judgment must be dismissed, means that costs should follow the event. Secondly, Mr Thompson submits the applicant has acted unreasonably. Mr Thompson relies on the applicant not giving any notice of its application for default judgment. Although this is put as a third point, I think it can be dealt with as an aspect of what is said to be the unreasonable conduct of the applicant, and that is that, before today’s hearing, the respondent proposed that the application for default judgment be resolved on the basis that the respondent would bear its own costs.
The application and cross-application for costs are brought in a proceeding for relief under the FW Act. That means that the power to order costs is regulated by s 570 of the FW Act, subsection (1) of which provides that:
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.
Sections 569 and 569A are not relevant to the issues I need to determine today. Subsection 570(2) of the FW Act relevantly provides that:
The party may be ordered to pay the costs only if . . . (b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs
The question I am required to determine is whether the applicant’s incurring costs in filing an application in a proceeding for default judgment is due to any unreasonable act or omission by the respondent.
If there were no evidence of any engagement by the respondent’s solicitor as set out by Mr Yazbeck in his affidavit, there would be no doubt in my mind that the filing of an application for default judgment would have been due to the unreasonable act of the respondent, that unreasonable act being not complying with the orders I made on 25 February 2022. The question is whether that act is not unreasonable, having regard to the matters that have been put before me today.
The essence of those matters is the respondent’s solicitor trying to settle the matter with a view to trying to put things in place so that the matter can be appropriately dealt with at mediation. In my opinion, that does nothing to ameliorate the unreasonableness that would otherwise attach to the first respondent not complying with the orders I made. However well-intentioned Mr Yazbeck’s dealings and response to instructions might be, it is still the case that it was done in complete disregard of the orders that was made on 25 February 2022. It was always open for Mr Yazbeck to apply to the Court, if he so wished, to vary the orders that were made on 25 February 2022. Further, it is the usual practice of this Court – and, indeed, it is only a question of common sense – that a mediation requires, at the very least, the identification of what is in dispute between the parties. It is almost futile for a mediation to take place when a respondent has not bothered to put a responsive document to a claim such as would at least identify to the applicant and, as importantly, to any mediator, what the scope of the dispute is and, therefore, what the scope of a settlement might be.
Then it is said that the unreasonableness of not filing a defence is ameliorated by the fact that the applicant gave no notice of its intention to file an application in a case. Mr Thompson submitted that, had such notice been given, then of course a response would have been filed and that would have, presumably, prevented the applicant from filing this application in a proceeding. That, in my opinion, does not ameliorate the unreasonableness of the respondent not filing a response, because it was always open to the respondent to file a response and, therefore, prevent the applicant from filing an application in a proceeding.
So, in my view, the costs that the applicant incurred up to and including the filing of the application in a proceeding was caused by the unreasonable conduct of the respondent, that unreasonable conduct being failing to comply with an order of the court made some five weeks before, on 25 February 2022.
Then there are the additional costs that the applicant, and now I will include the respondent, incurred after the application for default judgment was filed. The respondent submits that any further costs the applicant has incurred are not due to any unreasonable act by the respondent because the respondent offered that the application be disposed of on the basis of the respondent bearing his own costs. Whether that submission has any merit depends on whether there was any merit in the respondent offering to deal with the application for default judgment on that basis. Assuming I am right in concluding that the filing of the application by the applicant for default judgment was due to the unreasonable act of the respondent, that unreasonable act being not filing a response as required by the orders made on 25 February 2022, it is hardly reasonable to offer to have that application for default judgment disposed of on the basis that the costs the applicant incurred in filing an application for default judgment not be paid by the respondent.
So, in my view, the applicant’s continuing up to the hearing today for the purpose of seeking his costs is due to the unreasonable conduct of the respondent, that unreasonable conduct being not accepting that it should pay the costs the applicant incurred, at least up to the time of filing of the application for default judgment. I am satisfied I should make an order to requiring the respondent to pay the applicant’s costs.
Next there is the question of quantum. The applicant claims his costs are $4,352. Mr Thompson, quite correctly, submits that this is not the amount provided for in Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules).
The Court is not bound to apply the costs provided for in that Schedule; it has a discretion to do so – see CIQ17 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (No 2) [2020] FCCA 3467. I am therefore not bound to assess the applicant’s costs by applying the scale provided in Schedule 2 to the GFL Rules. I am also not prepared, however, to assess those costs in the amount the applicant claims. There is a certain element of arbitrariness in assessing costs in a lump sum, but my sense is that $2,500 would be a sufficient indemnity for the costs the applicant has incurred.
The orders I propose to make today are to dismiss the application for default judgment, and also order that the respondent pay the applicant’s costs of that application set in the sum of $2,500.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 26 April 2022
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