Childers v Archive Storage Pty Ltd

[2018] FCCA 3192

FEDERAL CIRCUIT COURT OF AUSTRALIA

CHILDERS v ARCHIVE STORAGE PTY LTD [2018] FCCA 3192

Catchwords:
COSTS – Application for security for costs – whether the application was an unreasonable act that caused the applicant to incur costs – establishment that case was not brought unreasonably – costs order made.

Legislation:

Fair Work Act 2009 (Cth), s.570

Applicant: SUMMER CHILDERS

Respondent: ARCHIVE STORAGE PTY LTD ACN
160 054 937

File Number: SYG 1206 of 2018

Judgment of: Judge Smith

Hearing date: 10 August 2018

Date of Last Submission: 10 August 2018

Delivered at: Sydney

Delivered on: 16 November 2018

REPRESENTATION

Counsel for the Applicant: Ms S Kelly

Solicitors for the Applicant: Patron Legal

Counsel for the Respondent: Mr D O’Sullivan

Solicitors for the Respondent: Dentons

ORDERS

1. The respondent pay the applicant’s costs and disbursements of the application for security for costs fixed in the amount of $8,655.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1206 of 2018

SUMMER CHILDERS

Applicant

And

ARCHIVE STORAGE PTY LTD ACN 160 054 937

Respondent

REASONS FOR JUDGMENT

1. These proceedings involve claims that the applicant was dismissed by the respondent in contravention of the general protection provisions of the Fair Work Act 2009 (Cth).

2. On 6 July 2018, the respondent filed an application seeking an order that the applicant give security for the costs of and incidental to the proceedings. That application was heard and dismissed on 10 August 2018. The applicant now seeks an order for her costs of that application.

3. Given the nature of the proceedings, the power of the Court to award costs is governed by s.570 of the Act which provides:

   ...

   (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; or

   (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.

4. There was no dispute about the principles to be applied in the application of s.570(2). They were summarised in the applicant’s written submissions as follows:

   7. … The discretion conferred by the confined terms of s 570(2) should be exercised cautiously, and the case for its exercise should be clear. The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the FW Act, or the defence of such claims.

   8.  The policy behind s 570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. Insofar as it operates to the benefit of respondents, it is designed to ensure respondents feel free to pursue arguable legal and factual responses to the claims made against them.

   9.  None of those propositions deny the Court’s ability to find that one or both of the two preconditions expressed in ss 570(2)(a) and (b) exist where the factual circumstances warrant it. The legislative policy behind a provision such as s 570(1) is not inconsistent with the requirements for proceedings to be conducted reasonably, fairly and efficiently. As an access to justice provision, it contemplates parties and their legal representatives will access the Court responsibly.

   10. While the discretion must be exercised cautiously, there is also a need to keep constantly under scrutiny the manner in which the proceedings are conducted, including proceedings under the FW Act, to ensure that costs are not “unreasonably” incurred and that the public interest in the orderly and cost-effective administration of justice is not too readily placed to one side.

   (Citations omitted)

5. The applicant contends that the application for security for costs was an unreasonable act that caused her to incur costs. There were two essential bases for that submission: first, contrary to the respondent’s primary contention in support of its application, the substantive application did not have poor prospects of succeeding; and secondly, the respondent proceeded with the application after having this drawn to their attention, being invited to withdraw the application, and being told that, if they did not, an application for costs would be made.

6. The respondent argued that the applicant’s basic premise was that, in a security for costs application in proceedings to which s.570 of the Act applies, “it must be established that it is inherently likely that a costs order will be made and that a failure to do so will automatically result in the application for security for costs failing”. The respondent argued that this premise was flawed and, if followed, would circumscribe the discretionary power of the Court to order security for costs.

7. The respondent’s arguments are themselves flawed. First, they misstate the applicant’s argument. The applicant’s argument proceeded on the correct basis that her prospects of success was one of the bases for the application for security and that, in any event, given the effect of s.570 of the Act, it is a relevant consideration in the exercise of the Court’s discretion. That argument is correct.

8. Absent any consideration of the prospects of the success of the application, the Court cannot determine the likelihood of there being a costs order or the quantum of those costs. The mere fact that the Court has a broad discretion to make an order for security does not mean that the discretion is unfettered. The power of the Court to award any costs is fettered by s.570(2) and, for that reason, the question whether that provision may prevent any costs being awarded at all is relevant to an application for security.

9. The main difficulty facing any respondent who seeks an order for security for costs in proceedings such as these, is that there is a presumption that adverse action was taken for one of the prescribed reasons. Where, as here, there was no question that there was adverse action (in the form of dismissal) in circumstances where one of the prescribed reasons was clearly in play (the applicant’s pregnancy), it is very difficult indeed to argue, well prior to the close of evidence, that there is any likelihood of an award of costs against the applicant.

10. The applicant established that her case was not brought unreasonably. The respondent had been given notice of this possibility and yet persisted with its application. In my view, that was an unreasonable step. I am satisfied that sub-s.570(2)(b) is met and there is no reason, in my view, to refrain from making an order for costs.

11. The applicant filed evidence that the costs and disbursements incurred in respect of the application amounted to $17,180.15. The respondent contests the reasonableness of some of those costs.

12. On the basis of my finding, I consider that there ought to be an order for the costs incurred after 8 August 2018. Those costs amount to $8,155. I agree with the respondent’s submission that costs of travelling from Melbourne and staying in Sydney for the purposes of the application are unreasonable in respect of proceedings commenced in the Sydney registry of the Court. However, I consider that disbursements of $500 for photocopying are reasonable.

Conclusion

1. For those reasons, I order the respondent to pay the applicant’s costs and disbursements of the application for security for costs in the amount of $8,655.

I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Judge Smith

Date:         16 November 2018