Clark v Ventura Transit Pty Ltd (No.2)
[2018] FCCA 1184
•26 April 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CLARK v VENTURA TRANSIT PTY LTD (No.2) | [2018] FCCA 1184 |
| Catchwords: COSTS – Application for costs by Respondent pursuant to s.570 of the Fair Work Act 2009 (Cth) – whether certain failures by Applicant amounted to an unreasonable act or omission that caused the Respondent to incur costs – held failures by Applicant not unreasonable – held not satisfied Applicant’s unreasonable act or omission caused Respondent to incur costs – application for costs dismissed. |
| Legislation: Fair Work Act 2009, ss.117, 570 Federal Circuit Court of Australia Act 1999 (Cth), s.79 |
| Cases cited: Clark v Ventura Transit Pty Ltd [2018] FCCA 468 Donnelly v Edelsten & Ors (1994) 49 FCR 384 |
| Applicant: | GREGORY PAUL CLARK |
| Respondent: | VENTURA TRANSIT PTY LTD |
| File Number: | MLG 663 of 2016 |
| Judgment of: | Judge Jones |
| Hearing date: | 26 April 2018 |
| Date of Last Submission: | 26 April 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 26 April 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Campbell |
| Solicitors for the Applicant: | JobWatch Inc |
| Counsel for the Respondent: | Ms Drakeford of Marsh & Maher Richmond Bennison |
| Solicitors for the Respondent: | Marsh & Maher Richmond Bennison |
ORDERS
The time for the Respondent to file their Application in a Case (Costs) be extended to 9 April 2018.
The following parts in the affidavit of Anthony Thomas Maher filed on 9 April 2018 be struck out:
(a)lines 3 and 4 of paragraph 21; and
(b)paragraph 26.
The Application in a Case (Costs) filed by the Respondent on
9 April 2018 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 663 of 2016
| GREGORY PAUL CLARK |
Applicant
And
| VENTURA TRANSIT PTY LTD |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
Introduction and Background
On 9 April 2018, the Respondent, being the Respondent in the substantive proceedings but the Applicant in the Application in a Case the subject of this judgment, filed an Application in a Case seeking the following orders:
1. Pursuant to s 570 of the Fair Work Act and/or section 79(1) of the Federal Circuit Court of Australia Act, the Applicant pay the Respondent’s costs of the proceeding on a standard basis;
2. In the alternative, the Applicant pay the Respondent’s costs of and incidental to the Applicant’s application to amend his claim made 23 March 2017 on a standard basis.
The substantive proceedings in this matter were in relation to an application filed by the Applicant that the Respondent had contravened various general protections provisions under the Fair Work Act 2009 (Cth) (“the FW Act”) as well as s.117 of the FW Act. Judgment was delivered on 6 March 2018 with respect to the substantive proceedings (Clark v Ventura Transit Pty Ltd [2018] FCCA 468) (“the judgment”) and the Applicant’s application was dismissed.
Applicable Law
Under s.79 of the Federal Circuit Court of Australia Act1999 (Cth) (“the FCCA Act”), the Court has a general power to award costs, however, the power is qualified by sub-s.79(1) of the FCCA Act, which relevantly provides as follows:
79 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…
Section 570(2)(b) of the FW Act relevantly provides as follows:
570 Costs only if proceedings instituted vexatiously etc.
…
(2) 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 Respondent seeks costs under s.570(2)(b) of the FW Act.
The effect of s.570 of the FW Act is to limit the Court’s powers in relation to any order for costs in respect of proceedings relating to matters arising under the FW Act. As a result, the Court may only make orders in such proceedings for one party to pay the costs of the other party where one party’s unreasonable act or omission caused the other party or parties to incur costs. I agree with the Applicant’s submission in this case that the principles in relation to whether a party’s unreasonable act or omission has caused another party to incur costs were relevantly summarised in Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574 (“Clarke”) as follows (Clarke at [28]):
28. …The exception applies when two criteria are satisfied. The first criterion is that one party must have engaged in “an unreasonable act or omission”. As the reasoning of Tracey J in Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 392 and Siopis J in McAleer v The University of Western Australia (No 2) (2007) 161 IR 151 demonstrates, whether a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case. The second criterion is that the act or omission of one party must have “caused another party to the proceeding to incur costs in connection with the proceeding”. Once both criteria are satisfied, then the Court “may” in its discretion order the party which has engaged in the unreasonable act or omission to pay some or all of the costs of the other party.
In Hutchinson v Comcare (No.2) [2017] FCA 370 (“Hutchinson”), Bromberg J stated as follows (Hutchinson at [7]-[8]):
7. I generally agree with the observations of Mortimer J in Ryan v Primesafe [2015] FCA 8 at [64], as endorsed by the Full Court (Siopis, Collier and Katzmann J) in Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8], that the purpose of s 570 of the FW Act is to ensure that fear of a costs order does not discourage genuine litigants from pursuing cases with reasonable cause. The provision is concerned with access to justice.
8. With this in mind, the occasions upon which costs will be awarded under s 570 are likely to be exceptional: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199; 156 FCR 275 at [60] (Black CJ, North and Mansfield JJ). The fact that a party has conducted litigation inefficiently, made late concessions, or adopted a misguided approach will be relevant to, but not conclusive of, the party having acted unreasonably in a sense relevant to s 570(2)(b): Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; 170 FCR 574 at [29] (Tamberlin, Gyles and Gilmour JJ).
I note that in his Honour’s decision, Bromberg J also referred to the decision in Clarke.
The following documents are before the Court:
a)
the Application in a Case filed by the Respondent on
9 April 2018;
b)the affidavit of Anthony Thomas Maher (“Mr Maher”) filed by the Respondent on 9 April 2018;
c)the affidavit of Nicola Sophie Drakeford (“Ms Drakeford”) filed by the Respondent on 9 April 2018; and
d)an Outline of Submissions provided to the Court today by Counsel for the Applicant.
In the present case, the unreasonable act or omission is said by the Respondent to be the following failures of the Applicant:
a)first, a failure by the Applicant to accept an offer made by the Respondent at a conference held in the Fair Work Commission to pay the Applicant the sum of $14,000. In the affidavit of Anthony Thomas Maher filed on 9 April 2018, Mr Maher deposes that this offer was made on a purely commercial basis;
b)second, a failure by the Applicant to accept what is said by the Respondent to be a Calderbank offer made by the Respondent on 1 June 2016 (“the First Calderbank Offer”), which included a payment to the Applicant of $7,500 (gross). The correspondence making the First Calderbank Offer is contained in an attachment to the affidavit of Anthony Thomas Maher filed on 9 April 2018 and sets out the grounds on which the Respondent believes the Applicant’s refusal to work on the Boxing Day public holiday was not reasonable. The First Calderbank Offer was made after the Applicant filed his application in this Court and before the first directions hearing on 27 July 2016. This offer was not accepted and no alternative offers were made by the Applicant;
c)third, at the directions hearing in this Court held on 27 July 2016, the Applicant refused to attend mediation; and
d)
fourth, a further offer was made by the Respondent on
16 November 2016 (“the Second Offer”) for the Applicant to discontinue his claim and for each party to bear their own costs – essentially a “walk away” offer. That offer was not accepted and no alternative offers were made by the Applicant; and
e)
fifth, the substantive proceedings were listed for trial on
23 March 2017. On 21 March 2017, JobWatch Inc, who commenced representing the Applicant after the proceedings were initiated in this Court, informed the Respondent that the Applicant would seek leave to amend the Applicant’s application by adding three further alleged contraventions of sections of the FW Act, namely, ss.117, 343 and 345. JobWatch Inc informed the Respondent that they would be seeking leave to amend the Applicant’s application but that there would be no change to the substratum of facts. The Respondent notes that this notice was received at 6.47pm on 21 March 2017. Counsel for the Applicant has noted that a reason for the late notice was the most recent appointment of Counsel. The hearing listed on 23 March 2017 was vacated and orders were made granting the Applicant leave to amend his application.
In Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221 (“Melbourne Stadiums”), their Honours Tracey, Gilmour, Jagot and Beach JJ observed the following (Melbourne Stadiums at [166]):
166. It is well established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2) and its predecessors: see, for example, McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 598-9 (Buchanan J).
In the Outline of Submissions, Counsel for the Applicant has pointed out that in relation to a failure to accept an offer, the Full Court of the Federal Court of Australia in Melbourne Stadiums stated the following (Melbourne Stadiums at [167]-[168]):
167. Even if it be accepted that Mr Sautner’s offer was a reasonable one it does not necessarily follow that MSL’s failure to accept it constituted an unreasonable act: Alpine Hardwoods (Aust) Pty Ltd v Hardys Pty Ltd (No 2) (2002) 190 ALR 121 at 128.
168. This is also a case in which the Full Court’s counsel of caution in Stratton Finance Pty Limited v Webb (2014) 314 ALR 166 is particularly apposite. In that case a Calderbank offer had been made by the applicant in a case in which he made claims under the Fair Work Act and for breach of contract. The Full Court noted that Calderbank letters presupposed the existence of a “costs jurisdiction”. No such jurisdiction existed (subject to s 570(2)) where claims are made under the Fair Work Act…
(Emphasis in original)
The Full Court of the Federal Court in Melbourne Stadiums then referred to the decision in Stratton Finance Pty Limited v Webb [2014] FCAFC 110; (2014) 314 ALR 166 (“Stratton Finance”) (Melbourne Stadiums at [168]) where the Full Court of the Federal Court said as follows (Stratton Finance at [80]):
80. …To group together contractual and FW Act claims in an offer may permit the conclusion that the refusal of the offer was unwise, even unreasonable, but it does not follow that such is an unreasonable act or omission, for the purposes of s 570(2).
In Sagona v R & C Piccoli Investments Pty Ltd & Ors (No.2) [2014] FCCA 2925 (“Sagona”), her Honour Judge Whelan observed as follows (Sagona at [40]):
40. …The rejection of a favourable settlement offer at a time when the party had ample time to assess a claim can be unreasonable in circumstances where it would be unfair to require another party to bear costs for which it was not reimbursed.[1]
(Footnote in original)
[1] See Donnelly v Edelsten (1994) 49 FCR 384.
In making this observation in Sagona, Judge Whelan applied the finding in Donnelly v Edelsten & Ors (1994) 49 FCR 384 (“Donnelly”) where the Full Court of the Federal Court comprising of Neaves, Ryan and Lee JJ said as follows (Donnelly at 396):
…It may be said that such an order is not intended to punish a party who has failed to obtain judgment in terms as favourable as those contained in a rejected offer of compromise. The foundation for the order is the need for the costs order to do equity where a party who has succeeded in the proceeding has made a reasonable attempt to terminate the proceeding by an offer to compromise shown to have been a fair offer in all the circumstances and to have provided appropriate opportunity for the offeree to consider and deal with the offer…
(Citations omitted)
Consideration
For the following reasons I am not satisfied that the Applicant has unreasonably caused the Respondent to incur costs in these proceedings within the meaning of s.570(2)(b) of the FW Act.
First, the offer made at the Fair Work Commission was made on a commercial basis. The evidence before the Court about the circumstances in which the offer was made indicates to me that it may well have nothing to do with the merits of this case but was made on a commercial basis.
Second, the First Calderbank Offer was at a very early stage of the proceedings and prior to the filing and serving of evidence by both parties. I am not satisfied that it could be said that the Applicant was in a position to assess the evidence and consider the compromise that was offered by the Respondent. The offer was made on the terms that it was paid as a termination payment subject to tax and that the parties would enter a Deed of Release, including a Deed of Confidentiality. No mention was made of costs incurred to date.
I query whether the First Calderbank Offer was appropriate in circumstances where the proceedings in this matter purely arose out of the FW Act and, as I have already indicated, neither party had filed submissions.
I regard the refusal by the Applicant to attend mediation as neutral. In my view, attendance at this type of alternative dispute resolution is only useful where both parties wish to participate and it is generally my practice not to order mediation against the wishes of one party. In those circumstances, I am not satisfied that the decision of the Applicant not to accept the First Calderbank Offer was an unreasonable one.
Third, the failure of the Applicant to accept the Second Offer on the basis that the Applicant’s claim had little merit, while relevant, is not determinative of this matter. The Respondent relies on the fact that affidavits had been filed, however, the Respondent filed further affidavits in 2017 by the General Manager and the Site Manager of the Respondent. In these proceedings, submissions were made by the Respondent that those further affidavits were purely in relation to the addition of further claims to the Applicant’s application in the substantive proceedings, however, having determined the substantive proceedings, I am satisfied that the matters deposed in the further affidavits expanded on matters already ventilated in the earlier affidavits filed by the Respondent. I conclude from this that the Respondent had formed the view that their evidence contained in the earlier affidavits was not sufficient for the purpose of defending the allegations made by the Applicant. Consequently, I am not satisfied that it was unreasonable for the Applicant to decline the Second Offer.
Turning to the second part of the orders sought by the Respondent in the Application in a Case filed on 9 April 2018, it is true that the first hearing was vacated and the Applicant was granted leave to amend his application, however, this is not unusual in matters such as these and therefore, in my view, does not carry significant weight in considering this Application in a Case. On the basis that it is contained in evidence before the Court in an attachment to the affidavit of Anthony Thomas Maher filed on 9 April 2018, I accept that Counsel for the Applicant had only recently been involved and that the Applicant was entitled to press for matters which he may well have not otherwise been able to press for had he not sought leave to amend his application. In any event, I granted leave to the Applicant to amend his application.
It is noted that there was no evidence regarding the costs incurred in relation to the orders sought that the Applicant pay the Respondent’s costs. Ms Drakeford, appearing for the Applicant at the hearing of this Application in a Case, said that that is unnecessary, however, it makes the exercise of the Court a little difficult when there is no evidence about what was incurred. There was a total cost of $75,000, which is supported by a letter asserted by the Respondent. It would be very hard to separate out from that, or at least for me to form a view on, what part of the $75,000 comprised responding to the amended application, which is simply to deny it, and which part of the affidavits that were drafted pertained to that and which parts pertained to evidence that enlarged on the earlier evidence given by the managers of the Respondent.
It is true that the Applicant’s application was dismissed and that it can be said that the Applicant was completely unsuccessful in the claims that he made, which was reiterated by the Respondent in support of their Application in a Case. However, the reality is, as articulated in the judgment on the substantive proceedings, that the resolution of the application required determining many disputed factual matters and an assessment of the meaning of many notices posted by the Respondent at the workplace regarding the Applicant’s workplace rights.
In my view, it is evident from the judgment that the meaning of those workplace notices could never have been said to be clear. The meaning was ascertained primarily by reference to further evidence filed by the Respondent’s managers in 2017, which were directed to clarifying the meaning of the notices and the oral evidence given at the hearing. This is not simply evidence that was directly concerned with the Applicant’s alleged contraventions of the misleading and coercion aspects of the FW Act. It was actually relevant to the claim that adverse action was taken because of the exercise of a workplace right. The workplace right was dependent upon the Court’s finding about whether the Applicant complied with the relevant section of the FW Act, but also the meaning of the notices. All the substratum of facts in this case which were disputed were intertwined. Nothing can be separated out from the other.
In those circumstances, I am not satisfied that it can be said that the Applicant pressed on with a case that was hopeless or even bound to be dismissed by the Court. It seems to me that the oral evidence was actually critical to the Court’s determination of the alleged contraventions before it and, of course, the oral evidence did not take place until the hearing itself.
In these circumstances, the Respondent has not satisfied me that it has incurred costs because an unreasonable act or omission by the Applicant caused it to incur costs and, further, I am not satisfied that the Applicant’s amendment of his application caused the Respondent to unreasonably incur costs. Consequently, the order that I will make is that the Application in a Case filed by the Respondent on 9 April 2018 be dismissed.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of Judge Jones
Associate:
Date: 21 May 2018
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