Cross v Harbour City Ferries Pty Ltd T/As Harbour City Ferries & Ors (No 2)
[2017] FCCA 1713
•2 August 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CROSS v HARBOUR CITY FERRIES PTY LTD T/AS HARBOUR CITY FERRIES & ORS (No.2) | [2017] FCCA 1713 |
| Catchwords: INDUSTRIAL LAW – Costs – Application under s.351 of the Fair Work Act 2009 (Cth) – application dismissed – power to award costs – whether s.570 of the Fair Work Act 2009 (Cth) gives the Court power to award costs or is a condition on an existing power – application brought without reasonable cause – unreasonable failure to accept offer of compromise – Costs order made. |
| Legislation: Acts Interpretation Act 1901 (Cth), ss.13(3), 15AA Other Materials Cited: |
| Cases cited: Australian & International Pilots Association v Qantas Airways Ltd(No 3) (2007) 162 FCR 392; [2007] FCA 879 |
| Applicant: | CRAIG RICHARD CROSS |
| First Respondent: | HARBOUR CITY FERRIES PTY LTD T/AS HARBOUR CITY FERRIES |
| Second Respondent: | SYDNEY FERRIES CORPORATION |
| Third Respondent: | CRAIG RIECK |
| File Number: | SYG 690 of 2016 |
| Judgment of: | Judge Smith |
| Hearing date: | Decided on the papers |
| Date of Last Submission: | 5 June 2017 |
| Delivered at: | Sydney |
| Delivered on: | 2 August 2017 |
ORDERS
The applicant pay the costs of the first and third respondents on a party/party basis until 17 June 2016 and thereafter on an indemnity basis.
The applicant pay the costs of the second respondent on a party/party basis until 13 February 2017 and thereafter on an indemnity basis.
The costs of the respondents are to be as agreed, or as taxed under Pt.40 of the Federal Court Rules 2011 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 690 of 2016
| CRAIG RICHARD CROSS |
Applicant
And
| HARBOUR CITY FERRIES PTY LTD T/AS HARBOUR CITY FERRIES |
First Respondent
| SYDNEY FERRIES CORPORATION |
Second Respondent
| CRAIG RIECK |
Third Respondent
REASONS FOR JUDGMENT
The applicant commenced these proceedings on 24 March 2016 claiming that each of the respondents had contravened a number of general protection provisions in the Fair Work Act2009 (Cth) (FW Act) and seeking compensation from the first and second respondents. The Court delivered judgment in respect of the matter one year later after a two day hearing: Cross v Harbour City Ferries Pty Ltd t/as Harbour City Ferries & Ors [2017] FCCA 514 (substantive judgment). These reasons are to be read together with the reasons for the substantive judgment.
At the conclusion of the reasons for the substantive judgment I stated:
120.Mr Cross’ claims have all been rejected. The application must be dismissed. In light of my reasons for dismissing the application, there is a real question as to whether there should be an order for costs. I will hear the parties on that question.
The parties both filed submissions on the question of costs. The respondents seek the following orders (without alteration):
(a)the Applicant to pay the First and Thirds Respondents’ costs on a party / party basis until 17 June 2016 and thereafter on an indemnity basis;
(b)the Applicant to pay the Second Respondent’s costs on a party / party basis until 13 February 2017 and thereafter on an indemnity basis.
The basis for these orders is said to be that:
(i)the proceedings were instituted without reasonable cause; and
(ii)the maintenance of the proceedings constituted an unreasonable act that caused the first and/or second respondents to incur costs in circumstances where each of them had made reasonable offers of settlement which were unreasonably rejected by the applicant.
The respondents’ submissions on costs stated that they sought costs “pursuant to s.570 of the Fair Work Act 2009”. That section 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; 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.
In his submissions, Mr Cross also appeared to seek costs. I will deal with his submissions on that question after first considering what power there is to award costs in these proceedings.
The Federal Circuit Court of Australia Act 1999 (FCCA Act) makes the following provision for a power to make an order for costs:
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 or section 14, 15 or 16 of the Public Interest Disclosure Act 2013.
(2)The Federal Circuit of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit Court of Australia or Judge.
The word “jurisdiction” in this provision is used in the broad sense of the word, referring to a power rather than in the narrow sense of an authority to decide.
As these proceedings were in relation to a matter arising under the Act, the plain words of s.79(1) of the FCCA Act suggest that the power under s.79 to award costs does not arise in these proceedings.
As the parties’ submissions on costs did not address that possibility, the Court invited the parties to make further submissions addressed to the following questions:
(i)what is the effect of s.79(1) of the FCCA Act on these proceedings?
(ii)does s.570 of the FW Act give the Court a power to order costs or does it only act on another power, if any?
(iii)if s.570 of the FW Act is only a condition on an existing power to order costs, and s.79(2) of the FCCA Act does not apply to these proceedings, is there another power to order costs and, if so, what is it?
Only the respondents made submissions in response to that invitation.
The respondents conceded that the effect of s.79(1) of the FCCA Act was that the power under s.79 to award costs did not apply to these proceedings, and that the Court must obtain its power to award costs from another source. They submitted that that source was s.570 of the FW Act which was subject to the conditions in s.570(2) of the FW Act being met.
Before turning to deal with that submission, it is necessary to consider two matters: first, the limited nature of the respondents’ submissions; and secondly, whether the respondents’ concession about the effect of s.79(1) of the FCCA Act is correct.
As I have observed, the respondents’ submissions were that the Court’s power to award costs in these proceedings arose under s.570(2) of the FW Act. The respondents did not submit either that the Court had any non-statutory power to award costs in these proceedings or that the power to award costs arose under s.15 of the FCCA Act. For that reason, it is not necessary to consider those possibilities. However, I would make the following brief observations.
First, in spite of the historical differences between the Courts of Chancery and Common Law in respect of the power to award costs[1], and the inherent power in courts such as the House of Lords of the United Kingdom to award costs[2], there is a significant body of authority for the proposition that the authority of a court to award costs must always be traced to a statutory provision[3]. That supports the approach taken by the respondents.
[1] Garnett v Bradley (1878) 3 App. Cas. 944 at 953-954, 962.
[2] Guardians of West Ham Union v Church Wardens & Overseers & Guardians of the Poor of the Parish of St Matthew, Bethnal Green [1896] AC 477, 483.
[3] See Dal Pont, Law of Costs, (LexisNexis Butterworths, 3rd ed, 2013), p.141 [6.4] and the authorities referred to at footnote 16.
Secondly, the express statutory power of a court to make “all such other orders as the circumstances of the case require” (similar in terms to s.15 of the FCCA Act) has been held not to provide for the power to award costs.[4]
[4] Booker v Gill (1898) 15 WN (NSW).
Thirdly, although inferior courts have been found to have the power to award costs as part of their power to prevent abuse of the court’s process[5], as the respondents have not relied on this source of power, and the applicant has not had the opportunity to address it, it would be unfair to consider the exercise of power to award costs on that basis.
[5] Dal Pont, op. cit. pp.144 – 145 [6.9] and the cases cited there.
The next issue is whether s.79(1) of the FCCA Act has the effect that the Court’s power to award costs under s.79 of the FCCA Act, does not apply to these proceedings.
The plain words of s.79(1) of the FCCA Act suggest that the power in s.79(2) does not arise in these proceedings. That is to be contrasted with the power of the Federal Court to award costs provided for in s.43 of the Federal Court of Australia Act 1976 (Cth) (FCA Act). That section provides:
43 Costs
(1)The Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs must not be awarded. This is subject to:
…
(b)section 570 of the Fair Work Act 2009; and
(c) section 18 of the Public Interest Disclosure Act 2013.
…
The difference between s.43(1) of the FCA Act and s.79(1) of the FCCA Act is that, while the latter appears to exclude the power to award costs under s.79 of the FCCA Act in respect of matters arising under the FW Act, the former only makes the power to award costs subject to the limitations found in s.570 of the FW Act. Given that, in proceedings such as these, both courts have relevantly identical jurisdiction and otherwise have identical powers, that is an odd result. Such an odd result can support a construction inconsistent with the clear words of the statute where, for example, it could not have been intended by the legislature: Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (1981) 147 CLR 297 at 320-321; [1981] HCA 26 (Mason and Wilson JJ); Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384 [78]; [1998] HCA 28 (McHugh, Gummow, Kirby and Hayne JJ). In light of that, it is necessary to have regard to the broader context of s.79 of the FCCA Act to determine the purpose of s.79(1) as it currently stands.
The Court was first created by operation of the Federal Magistrates Act 1999 (Cth) (subsequently renamed the FCCA Act)[6]. Section 79 of the Act then provided:
[6] The Federal Circuit Court of Australia was established by the Federal Circuit Court of Australia Act 1999 formerly the Federal Magistrates Act) and its jurisdiction at inception was conferred by the Federal Magistrates (Consequential Amendments) Act 1999.
79 Costs
(1)This section does not apply to family law or child support proceedings.
Note: See section 117 of the Family Law Act 1975 in relation to family law or child support proceedings.
Section 117 of the Family Law Act 1975 (Cth) relevantly provided:
117Costs
(1)Subject to subsection (2) and section 118, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsection (2A) and the Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
At that time, the major jurisdiction of the Court was under the Family Law Act. It remains so today, but the jurisdiction has expanded considerably to include jurisdiction under numerous Commonwealth Acts including the FW Act.
Section 117 of the Family Law Act clearly gave power to award costs but then limited the exercise of the power: first, by making it the ordinary case that each party bear his or her own costs; and secondly, by imposing limits on orders outside the ordinary course. For that reason, s.79(1) of the FCCA Act, as first enacted, did not result in there being no power to award costs.
The Court (then known as the Federal Magistrates Court of Australia) was given jurisdiction under the Workplace Relations Act 1996 (Cth) (WR Act) (the predecessor to the FW Act) by operation of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth)[7]. There was at the time, and as will be seen, continued to be a provision restricting the costs orders that could be made in proceedings under that Act[8]. However, no amendment was made to s.79 of the FCCA Act at that time.
[7] See s.122B, Definitions.
[8] The history of that provision was described by Jessup and Tracey JJ in Australasian Meat Industry Employees Union v Fair Work Australia (No. 2) (2012) 203 FCR 430; [2012] FCAFC 103 at [3] – [4].
Section 79 was first relevantly amended by the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (Cth) (Amending Act) with effect from 1 July 2009. Items 14 and 15 of sch.17 to the Amending Act provided:
14Subsection 79(1)
After “proceedings”, insert “or proceedings in relation to a matter arising under the Fair Work Act 2009”.
15Subsection 79(1) (at the end of the note)
Add “See section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act.”.
Section 43 of the FCA Act was amended by the Amending Act[9] to include reference to s.570 of the FW Act as set out at [19] above.
[9] Item 9, Sch.17 of Pt.1.
There is a real question whether the note that was added by Item 15 of sch.17 of the Amending Act forms part of the FCCA Act: see s.13(3) of the Acts Interpretation Act 1901 (Cth) (AI Act). The amendment to the note was made by the passing of a Bill rather than by the editorial input of a publisher. That much suggests that the amendment to the note was, at the very least, part of the context in which the amendment to s.79 of the FCCA Act was brought about and so may be considered in determining the purpose of the amendment.
Having regard to the note for that purpose, it appears that the intention of the amendment was to make the power to award costs of proceedings in matters arising under the FW Act similar to that in proceedings under the Family Law Act, that is, to be governed entirely by the provisions of another enactment. In this case that enactment is the FW Act. This suggests that there was no intention to deprive the Court of the power to award costs in Fair Work proceedings.
That suggestion is fortified by the fact that the amendments to the FCA Act did not, even on their face, deprive the Federal Court of any power to award costs. Rather, it made plain what was already the case: that is, that the power to award costs under s.43 of the FCA Act was conditioned by the provisions of s.570 of the FW Act, as it had been by provisions of the WR Act and its predecessors.
There is no indication in the text or context of the Amending Act (other than the difference in the terms of the amendments to the respective costs provisions in the FCA Act and the FCCA Act) that there was any intention to distinguish between the Courts in terms of the power of each to award costs. Further, there is no indication that it was intended to alter the situation concerning costs in the Court that had existed under the WR Act.
The explanatory memorandum circulated by the Minister in relation to the Bill[10] which led to the enactment of the Amending Act, supports the view that there was no intention either to distinguish between the Courts or, in particular, to take away this Court’s previous power to award costs in industrial relations matters. The explanatory memorandum relevantly stated:
601.Together these items make consequential amendments to subsection 79(1) to make it clear that the general costs provisions contained in that section do not apply to proceedings in relation to a matter arising under the FW Bill.
602.In a proceeding where the Court is exercising jurisdiction under the FW Bill, the Court may only order a party to pay costs in accordance with clause 570 of the FW Bill.
603.The ability of the courts to awards costs in workplace relations matters has been limited since 1904 and is consistent with discouraging legalism in proceedings before industrial courts.
(Error in original)
[10] Parliament of the Commonwealth of Australia, House of Representatives, Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009, (circulated by authority of the Minister for Employment and Workplace Relations, the Honourable Julia Gillard MP)
The same was said in respect of the amendments to s.43 of the FCA Act in spite of the differences in those amendments.
I am conscious that [601] and [602] of the explanatory memorandum (and the equivalent paragraphs in respect of the FCA Act: [582] and [583]) are arguably irrelevant to the proper construction of s.79 of the FCCA Act. They express somebody’s view about the effect of the amendments, rather than the purpose of the amendments, and cannot give an effect to the relevant provision which is inconsistent with the terms of the FCCA Act as a whole[11]. However, even if I were to ignore those paragraphs, the clear indication that arises from [603] is that the power to award costs was intended to be kept as it had been for a considerable period of time; that is, subject to the constraints contained in the relevant industrial law legislation.
[11] Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 at [55]; [2003] HCA 2 (Gaudron, McHugh, Kirby, Gummow and Hayne JJ) referring to Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518 (Mason CJ, Wilson and Dawson JJ), 547 (Gaudron J), Mills v Meeking (1990) 169 CLR 214 at 223, 226 (Mason CJ and Toohey J); Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492; Federal Commissioner of Taxation v Ryan (2000) 201 CLR 109 at 126 [29] (Gleeson CJ, Gummow and Hayne JJ).
I note in passing that, as explained by Jessup and Tracey JJ in Australasian Meat Industry Employees Union v Fair Work Australia (No. 2) (2012) 203 FCR 430 at [3]; [2012] FCAFC 103, the original predecessor to s.570 of the FW Act was s.197A of the Conciliation and Arbitration Act 1904 (Cth) (C&A Act) which was only introduced in 1973, that is, not nearly 100 years ago. Nevertheless, there have been restrictions on costs since 1904[12] and the nature of the restriction in s.570 of the FW Act can be directly traced to an ancestor of that provision at least 40 years old.
[12] As originally enacted, the Conciliation and Arbitration Act1904 (Cth) contained a provision allowing for an order for costs and expenses to be made by a court, but those costs could not be in respect of the services of “counsel solicitor or agent”: s.38(i).
However, while the purpose of the amendment to s.79 of the FCCA Act was, in my view, to continue the position in relation to the power of a Court to award costs as it had been for a significant period, the plain words of s.79 of the FCCA Act as amended suggest that, unless the power arose from s.570 of the FW Act, the ordinary meaning of s.79 of the FCCA Act was inconsistent with that purpose. As will be seen, I have concluded that s.570 of the FW Act does not give any power to the Court to award costs, but only imposes a condition upon any power that arises elsewhere. Applying s.15AA of the AI Act, the proper construction of s.79 of the FCCA Act, as amended by the Amending Act, is the one that best achieves the purpose of the Act (in this case, both the FCCA Act and the Amending Act). That construction is arrived at by reading s.79(1) of the FCCA Act so that it reads:
(1)This section does not apply to family law or child support proceedings or, except insofar as it is read subject to s.570 of the Fair Work Act 2009, in relation to a matter arising under the Fair Work Act 2009 or section 14, 15 or 16 of the Public Interest Disclosure Act 2013.
(Emphasised words added)
On that construction, I do not accept that the respondents’ concession concerning the effect of s.79(1) of the FCCA was correct. However, on the basis that I may be wrong, I will address the submissions by the respondents that the power to award costs arises under s.570 of the FW Act.
In Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221; [2015] FCAFC 20 the majority of a bench of 5 judges (Tracey, Gilmour, Jagot and Beach JJ) held:
140Section 570 [of the Fair Work Act] operates as an express limitation on the broad discretion to award costs which is conferred on this Court by s 43 of the Federal Court of Australia Act 1976 (Cth) and on the County Court by s 78A of the County Court Act 1958 (Vic).
See also Ryan v Primesafe (2015) 323 ALR 107; [2015] FCA 8 at [66] (Mortimer J) (Ryan), Fair Work Ombudsman v Skilled Offshore (Australia) Pty Ltd (No. 2) [2015] FCA 1509 at [7] (Gilmour J); King v Patrick Projects Pty Ltd (No. 2) [2017] FCA 388 at [8] (Gilmour J).
As I have observed, unlike s.79 of the FCCA Act, s.43 of the FCA Act makes the power to award costs granted by that provision subject to, amongst other matters, s.570 of the FW Act. However, there is no reason to construe s.570 of the FW Act differently for different purposes. For that reason, those cases are binding authority for the proposition that s.570 of the FW Act does not confer any power to award costs either in the Federal Court or in this Court.
The respondents argue that that proposition is wrong when regard is had to the purpose of the FW Act.
Prior to March 2006[13], s.347 of the then WR Act regulated the Court’s power to award costs. Relevantly, it provided:
[13] Act No.86 of 1988 as amended. Compilation prepared on 16 December 2005.
347Costs only where proceeding instituted vexatiously etc.
(1)A party to a proceeding (including an appeal) in a matter arising under this Act ... shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
The respondents noted that s.347 of the WR Act imported a clear limitation on the manner in which the Court may exercise its discretion to award costs. That is, it sought to regulate the exercise of a Court’s power to award costs rather than act as the source of such power.
The respondents then addressed the successor to s.347 of the WR Act, noting that, after 27 March 2006 (when the WR Act was amended as part of what is known as the “Work Choices Amendments”[14]) s.824 of the WR Act (s.347 having been repealed) provided:
[14] Workplace Relations Amendment (Work Choices) Act 2005 (Cth).
824Costs only where proceeding instituted vexatiously etc.
(1)A party to a proceeding (including an appeal) in a matter arising under this Act ... must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
(2)Despite sub-section (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act ... is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.
In Australian & International Pilots Association v Qantas Airways Ltd(No 3) (2007) 162 FCR 392; [2007] FCA 879, Tracey J considered this provision and stated at [21]:
The power of the Court to award costs in a proceeding is conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). Absent the grant of such a power the Court could not order the payment of costs by or to any party: see Garnett v Bradley (1878) 3 App Cas 944 at 962. Section 347(1) placed a constraint on the power conferred by s 43 of the Federal Court of Australia Act. It was not the source of the Court’s power to award costs. Rather, it regulated the exercise of that power in matters arising under the Act. I can find no support in the authorities for the contention that a statutory power to award costs is to be treated as procedural but that statutory inhibitions on the exercise of that power are to be regarded as conferring substantive rights or privileges...
The respondents argued that s.570 of the FW Act is of a different nature. They emphasised that s.570 of the FW Act provides that a party “may be ordered by the court to pay costs … only in accordance with subsection (2) or section 569 or 569A.”
The respondents relied on the following authorities in support of their argument:
(i)Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526; [2011] FCA 333, where his Honour Barker J stated at [467]:
Costs in a proceeding under the FW Act will only be ordered in specified circumstances. Section 570(2) empowers the Court to order costs, but only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause – which is not relevant here; 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 FWA (Fair Work Australia) – which is not relevant here;
(ii)the matter arose from the same facts as the proceedings.
(Emphasis added)
(ii)Reeve v Ramsay Health Care Australia Pty Ltd (No 2) [2012] FCA 1322 at [8] and [15] (the latter in particular) where his Honour Barker J stated:
While s 570(1) and (2) thus empower the Court to award costs, by providing that the party may be ordered to pay the costs if the Court is satisfied about any of the subsequent matters, the Court retains a discretion to award costs under s 570(1) or (2). I would conclude that the discretion under s 570, when it arises, like the ordinary discretion of the Court to award costs should be exercised judicially, and that where a party, such as the first respondent here, has been successful in the proceeding and the Court is satisfied, as it is in this case, that the proceeding was instituted without reasonable cause then, unless there is some other relevant reason that should cause the Court to exercise its discretion differently, the party who has been successful in the proceeding should have their costs. There is no other reason suggested by the circumstances not to make a costs order. The fact the applicant is self-represented is an insufficient ground, at least in the circumstances of this case. The first respondent has been put to considerable trouble and expense in responding to a proceeding that is without merit and is entitled to its costs.
(Emphasis added)
(iii)Clifford v The Trustee for Healthy Hearing & Balance Care (t/as Healthy Hearing & Balance Care) [2016] FCCA 1637 at [41] (Judge Altobelli); and
(iv)Ryan v Custom Sportswear Pty Ltd t/as Jax Sports [2013] SAIRC 23 at [30].
I do not accept that the history of s.570 of the FW Act supports the respondents’ contention.
The respondents accept (correctly in my view) that s.347 of the WR Act did not grant any power to award costs, but acted as a limit on whatever existing power there was. Justice Tracey found that the successor to s.347 of the WR Act was of the same nature. Section 347 was in similar terms to s.197A of the C&A Act which provided:
197A. A party to –
(a) a proceeding before the Commission or the Registrar;
(b) a proceeding, including an appeal, before the Court, or before a court of a State or Territory, in a matter arising under this Act; or
(c) a proceeding before the High Court –
…
shall not be ordered to pay any costs incurred by any other party to that proceeding except where the party against whom the order is made instituted the proceeding vexatiously or without reasonable cause.
(Emphasis added)
In Bourke v Mapstone (1984) 55 ALR 311 Northrop J said in respect of that provision, at 313:
The section imposes a limitation on the power of the specified courts to make orders as to costs against parties to proceedings under the Conciliation and Arbitration Act. The section does not confer power to make an order for costs. The section imposes a limitation on power. The power to make an order for costs normally must be found in other statutory provisions.
The Full Court made a comment to the same effect on appeal: Brophy v Mapstone (1984) 3 FCR 227 at 239 (Smithers ACJ, Keely and Morling JJ).
In Canceri v Taylor [1994] IRCA 12; 123 ALR 667, Moore J concluded that s.347 of the Industrial Relations Act1988 (Cth) (which succeeded the C&A Act) should be construed in the same way as s.197A of the earlier Act. In that case, Moore J was sitting in the Industrial Relations Court of Australia which, although it had assumed the Federal Court’s jurisdiction in respect of industrial law matters, had no express power to award costs. His Honour found that the Industrial Relations Court did have the power to award costs because it was constituted as a superior court of record and a court of law and equity. Although this Court is a court of record and of law and equity (s.8(3) of the FCCA Act), as I have noted, the respondents did not argue that this gave the Court power to award costs. For that reason, I have not considered that possibility.
The difference in the wording of s.570 of the FW Act and its predecessors, does not support any intention to alter the effect of the provision so that it operates as a grant of power rather than a restriction of an existing power. While I accept that the change from “should not”, “must not” and “shall not” to “may … only” supports an argument that there was a change of meaning, and that there is some ambiguity in the words “may … only”, the proper construction of the current text is that there was no substantive change. As the Federal Court has found, s.570 of the FW Act does not operate as a grant of power to award costs.
The combination of the words “may” and “only” in the provision have, in my view, the same grammatical effect as the words “must not … unless”, “should not … unless” and “shall not … except”. The slight difference between them is that “may” is permissive whereas “must” and “shall” are restrictive. However, when “may” is qualified by the word “only” it, too, becomes restrictive. If the words “may” and “only” were contiguous there would be little argument that they would be restrictive rather than permissive. Thus, it is only the separation of those two words that gives rise to a possible alternative meaning. That separation is, in my view, too slight a basis to support a meaning that is different from the position in respect of costs that has been in existence since at least 1973.
For those reasons, I reject the argument that the power of the Court to award costs arises from s.570 of the FW Act. That power arises from s.79 of the FCCA Act as construed at [35] above. I turn next to whether the circumstances of this case meet the conditions imposed on the exercise of that power by s.570 of the FW Act.
I accept the respondents’ submission that the following principles are relevant to the issue of costs in this matter.
In Ryan , Mortimer J described the Court’s power under s.570 of the FW Act as follows at [64] to [66]:
Section 570: applicable principles
…
64.... The discretion conferred by the confined terms of s 570(2) should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] per Bromberg J. 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 Fair Work Act, or the defence of such claims. 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 (in particular, in my opinion) 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. ...
65.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.
The Full Court of the Federal Court of Australia in Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at [28]; [2008] FCAFC 143, set out the two criteria that must be satisfied before a costs order would be made under s.824 of the WR Act:
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] FCA 879; (2007) 162 FCR 392 and Siopis J in McAleer v University of Western Australia (No 2) [2007] FCA 247; (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.
These considerations continue to be applicable in the context of s.570(2) of the FW Act.
The relevant question to ask in determining whether a proceeding has been commenced without reasonable cause was stated by Wilcox J in Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264; [1992] FCA 539 to be:
… whether, upon the facts apparent to the applicant at the time of instituting proceeding, there was no substantial prospect of success.
Wilcox J went on to explain that:
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 applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.
Further, 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) of the FW Act. In this regard, in Veda Advantage Ltd v Malouf Group Enterprises Pty Ltd (No 2) (2016) 118 IPR 156; [2016] FCA 470, Katzmann J said, at [31]:
... [R]efusal to accept an offer not made in compliance with the rules (a Calderbank offer, see Calderbank v Calderbank [1975] 3 All ER 333) does not give rise to any presumption in favour of the offeror. The offeror needs to show that there was a genuine offer of compromise, and that it was unreasonable for the offeree not to accept it: Black v Lipovac at [217]–[218]. In deciding whether it is unreasonable for an offer to be rejected, the following matters should ordinarily be considered:
• the stage of the proceeding when the offer was made;
• the time afforded to the offeree to consider the offer;
• the extent of compromise involved;
• the offeree’s prospects of success, assessed as at the date of the offer;
• the clarity with which the terms of the offer were expressed;
• whether the offer foreshadowed an application for indemnity costs in the event of refusal.
The applicant based his application on five grounds. For the reasons I gave in the substantive judgment, I find that there was no reasonable basis for any of those grounds. Accordingly, I would make an order that the applicant pay the respondents’ costs. Nothing that the applicant has argued changes that conclusion. I also consider that the applicant ought to pay some of those costs on an indemnity basis.
It is convenient to consider the application of s.570 of the FW Act in respect of each of those grounds in turn.
First claim: breach of s.351 of the FW Act by Sydney Ferries and Mr Rieck
The applicant claimed that s.351 of the FW Act was breached by his employer in that adverse action was taken against the applicant because he had exercised his rights to family and carer’s responsibilities. That action was not to allocate shifts to the applicant and to move him from the Pool A list of employees to Pool B. As I found at [10] of the substantive judgment, Mr Rieck was never the applicant’s employer. Sydney Ferries was the applicant’s employer. For that reason, I concluded that the claim against Mr Rieck was baseless. This conclusion applies in respect of all of the claims made against Mr Rieck and I need not repeat what I have said there in relation to those claims.
The applicant does not now contend that Mr Rieck was ever his employer. Rather, he makes a number of assertions seeking to avoid an order for costs. These assertions include that Mr Rieck’s inclusion as a party was a mistake caused variously by Sydney Ferries’ failure to inform him of its correct telecommunications provider and later failure to provide its telephone records, ASIC records being incorrect, and his not being told by a lawyer who gave the applicant pro bono advice.
The applicant also pointed to Mr Rieck’s failure to seek an order removing himself as a party, the failure to “issue a Certificate of vexatious proceedings order under Federal Circuit Court Rules 2001”, and what he contended was an unfair refusal by the Court of an application by the applicant to amend his application on the first day of the hearing. The applicant also made numerous submissions attacking factual findings made in the substantive judgment.
None of those matters changes the fact that there was no evidence to support a claim against Mr Rieck as an employer. In particular, the fact that a respondent does not take steps to end proceedings early, does nothing to provide a basis for proceedings that have already been brought. That is sufficient to conclude that the Court may make a costs order in favour of Mr Rieck. If it were necessary, it would also be open to conclude the claim against Mr Rieck was vexatious, but I do not need to go that far.
In respect of Sydney Ferries, I found at [60] of the substantive judgment, that the applicant had not established even the basic facts which might give rise to a claim that Sydney Ferries had taken adverse action against him for one of the reasons in s.351 of the FW Act. For that reason, I am satisfied that, even on the applicant’s own evidence, there was no reasonable basis for the claim against Sydney Ferries. The applicant should be ordered to pay the costs of Sydney Ferries.
Second claim: refusal to answer the applicant’s enquiry required for his carer’s responsibilities
In the substantive judgment, I concluded that the applicant fabricated his claim in order to have some legal basis to bring an action against Sydney Ferries. This claim was entirely without foundation: [80]-[82]. That conclusion is sufficient to find that the second claim was made without any reasonable cause.
Third claim: Mr Rieck withdrew an offer of permanent employment; failed to offer any shifts; removed the applicant from the seniority list and failed to issue the applicant with a return to work order
I have dealt with all the claims against Mr Rieck and need say nothing more about them.
The applicant claimed that he was seeking to exercise his right under s.65 of the FW Act. However, as I explained at [88] of the substantive judgment, a request under that section must be in writing and set out details of the change sought and the reasons for the change. On the applicant’s own evidence there was no such request and this aspect of the ground never had any reasonable cause.
The balance of the claim was that the first respondent, Harbour City Ferries (HCF) took adverse action including withdrawing an offer of employment because he had made a complaint and enquiry into his employment. There was never any reasonable basis for that claim. It was clear at all times that the offer of employment was withdrawn because the applicant had failed to respond to it: [93] of the substantive judgment.
The applicant also argued that he should have been given notice to return to work or an abandonment of work notice under the relevant enterprise agreement[15]. That claim, too, was hopeless given that the applicant was never absent from work for 21 days as required by cl.26B.1 of that agreement: see [103] – [104] of the substantive judgment. This claim was yet another example, of attempts by the applicant, to justify his claim by reference to provisions which simply did not apply on his own evidence.
Fourth claim: failure to provide roster line, to allocate shifts, to issue an “abandonment of employment” notice and coercion not to exercise workplace rights
[15] Sydney Ferries Maritime (AMOU and MUA) Enterprise Agreement 2012.
All but the last of these claims have already been dealt with.
The coercion claim was rejected. There was no evidence that the offer which was said to have amounted to coercion was ever made ([108]) and even if such an offer had been made, it would not have amounted to coercion: [109]. Nothing in the applicant’s evidence supported this claim and it was clearly made without reasonable cause.
Fifth claim: misrepresentation by HCF
The applicant claimed that HCF had made misleading representations about his workplace rights by stating that he had not contacted HCF for shifts, and that he was removed from the casual list because he had not performed any shifts. I found in effect, at [114], that neither statement by HCF was misleading because, on the applicant’s own evidence, they were true.
For those reasons, none of the applicant’s claims were brought with reasonable cause and so s.570 of the FW Act allows an order for costs to be made against the applicant.
The applicant’s application for costs
As I have already noted, the applicant appears at one point in his submissions to seek an order for costs against HCF. The applicant claims that HCF unreasonably refused to participate in a matter before the Fair Work Commission (FWC): see sub-s.570(2)(c) of the FW Act. However, it seems that on the applicant’s own version of events[16], what is complained about, is HCF’s failure to provide telephone records (which, the applicant says, would have proven that HCF had falsely stated that it had telephoned the applicant) and a subsequent failure to agree to attend a further conference with the FWC. That does not, in my view, amount to a refusal to participate in a matter before the FWC but rather, a failure to do what the applicant wanted it to do in that matter. For that reason, even if I accepted the applicant’s assertions about what occurred before the FWC, I would not be satisfied that the requirements of sub-s.570(2)(c) of the FW Act were met.
[16] Which was in his written submissions rather than in any admissible form.
In any event, even if they were met, I would not make any costs order against HCF. First, the applicant is unrepresented and is not ordinarily entitled to any award of costs; and secondly, the applicant’s claim wholly failed and I see no basis for making an award of costs in his favour.
In considering what order, if any, should be made in respect of costs, the Court must have regard to a number of matters including:
(i)whether a party has been wholly unsuccessful; and
(ii)whether any party has made an offer in writing to the other party to settle the proceedings; and
(iii)the terms of any such offer.
The respondents in these proceedings did make offers to settle:
(i)The first and third respondents (HCF and Mr Rieck) made an offer by letter dated 9 June 2016:
i)marked “without prejudice except as to costs”;
ii)in which a payment of $5,000 was offered on terms that the proceedings be discontinued with each party paying its own costs;
iii)which was open to acceptance until 17 June 2016; and
iv)referring to the judgment of Calderbank v Calderbank [1975] 3 All ER 333 (Calderbank) and stating that the letter would be relied on, on the question of costs.
(ii)The second respondent (Sydney Harbour Ferries) made on offer by letter dated 10 February 2017:
i)marked “without prejudice save as to costs”;
ii)offering to pay $4,000 within 28 days of a judgment in which the proceedings were dismissed;
iii)which was open to acceptance until 13 February 2017; and
iv)referring to the judgment of Calderbank and stating that the letter would be relied on, on the question of costs.
Each of these offers was for the equivalent of many weeks work for the applicant in circumstances where, on the applicant’s own evidence, his case had no reasonable prospects of succeeding. The applicant’s failure to accept those offers, was not only an unreasonable act that caused the respondents to incur costs in defending the proceedings, (see sub-s.570(2)(b) of the FW Act) but sufficient in my view to warrant a costs order to be made on an indemnity basis from the date on which the offers expired.
Conclusion
For the reasons given above, I will make the following orders as to costs:
(i)The applicant to pay the costs of the first and third respondents on a party/party basis until 17 June 2016 and thereafter on an indemnity basis.
(ii)The applicant to pay the costs of the second respondent on a party/party basis until 13 February 2017 and thereafter on an indemnity basis;
(iii)The costs of the respondents are to be as agreed or as taxed under Part 40 of the Federal Court Rules 2011 (Cth).
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Smith
Date: 2 August 2017
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