De Beer v TRANSITCARE LIMITED and Ors (No.2)
[2019] FCCA 2652
•20 September 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DE BEER v TRANSITCARE LIMITED & ORS (No.2) | [2019] FCCA 2652 |
| Catchwords: INDUSTRIAL LAW – Fair work – costs. |
| Legislation: Fair Work Act 2009 (Cth), ss.550, 569, 569A, 570(1), 570(2) Federal Circuit Court of Australia Act (Cth), s.79 |
| Cases cited: Cugura v Frankston City Council [2012] FCA 1299 Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 |
| Applicant: | LOUIS DE BEER |
| First Respondent: | TRANSITCARE LIMITED |
| Second Respondent: | PETER MARK EMERY |
| Third Respondent: | MARIAE LECKIE |
| Fourth Respondent: | TERENCE O’TOOLE |
| Fifth Respondent: | FRANCINE WICKS |
| File Number: | BRG 368 of 2015 |
| Judgment of: | Judge Jarrett |
| Hearing date: | By written submissions |
| Date of Last Submission: | 12 August 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 20 September 2019 |
REPRESENTATION
| The Applicant appeared in person |
| Solicitors for the First, Second, Third, Fourth and Fifth Respondents: | McCullough Robertson |
ORDERS
There be no orders as to costs of the application or the costs of the counterclaim.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 368 of 2015
| LOUIS DE BEER |
Applicant
And
| TRANSITCARE LIMITED |
First Respondent
| PETER MARK EMERY |
Second Respondent
| MARIAE LECKIE |
Third Respondent
| TERENCE O’TOOLE |
Fourth Respondent
| FRANCINE WICKS |
Fifth Respondent
REASONS FOR JUDGMENT
On 1 July, 2019 I gave judgment for the applicant against the first respondent for part of his claim against it for the reason I then published. I also gave judgment in a much larger sum for the first respondent against the applicant on its counterclaim against him. The applicant’s claims against the remainder of the respondents was dismissed.
I adjourned the question of pre-judgment interest and costs pending agreement between the parties or further submission. The parties have been able to agree upon some matters and not upon others.
The agreed matters are:
a)a variation to the judgment to include an order that the applicant pay to the first respondent the sum of $5,580 for what is described in the material as the Maranoa Variation;
b)interest payable to the applicant on the amount awarded to him quantified at $741.11 in accordance with the breakdown of the calculation provided at Attachment 1 to the respondents’ submissions;
c)interest payable to the first respondent on the amount awarded for the applicant’s breach of fiduciary duty – $3,474.62.
d)interest payable to the first respondent in respect of what is described in the material as the Holden motor vehicle transaction – $5,165.24.
The matters that remain in dispute between the parties concern the calculation of interest in respect of two aspects of the amounts awarded to the first respondent on its counterclaim and the incidence of the costs of the proceedings.
I will deal with the question of interest first. It concerns two matters, namely the amount awarded in respect of the claim referred to in the material as the Mercedes-Benz purchase and lease and the Maranoa Variation. In both cases, the argument relates to the arithmetic of the first respondent’s calculations. The applicant contends that his calculations are the more accurate. But that is not at all clear. Whilst the applicant has appended to his submissions what purport to be corrections to the first respondent’s calculations, the purported corrections are not explained. The first respondent’s calculations appear to be accurate and I find that they are reliable. I accept the interest calculations contended for by the first respondent.
Thus, in respect of the Mercedes-Benz purchase and lease the amount for interest is $2,655.02, comprising interest of $1,530.78 for the deposit and $1,114.24 for the proceeds of sale as explained in the first respondent’s submissions.
In respect of the interest payable to the first respondent for the Maranoa Variation, the amount is $1,822.12 as explained in the first respondent’s written submissions filed on 22 July, 2019.
I turn to deal with costs. The applicant contends that there should be no costs orders at all. The respondents, collectively, seek an order that the applicant pay their costs of the applicant’s claims and of the counterclaim.
The Court generally has power to make an order as to costs in proceedings before it: s.79 of the Federal Circuit Court of Australia Act 1999 (Cth). That general rule gives way where another Act provides that costs must not be awarded: s.79(2) of the Act. The award of costs is in the discretion of the Court and is generally made in accordance with the costs fixed in schedule 1 to the Federal Circuit Court Rules2001.
Ordinarily, costs follow the event in general litigation. In these proceedings, the applicant advanced his case as one for breach of various aspects of his employment contract with the first respondent as well as one for consequential findings that the first respondent had contravened the Fair Work Act2009 (Cth). His case against the personal respondents was that they were liable as accessories to the first respondent’s contraventions pursuant to s.550 of the Fair Work Act. They were not said to be liable to him in any other way.
Section 570 of the Fair Work Act 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.
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; 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.
Sections 569 and 569A of the Fair Work Act have no present relevance to this proceeding and may be safely passed over.
By the operation of s.570(1), if the proceedings here can be described as proceedings … in a court … in relation to a matter arising under this Act neither party can secure an order for costs unless they bring the case within s.570(2) as set out above. The immediate issue, then, is whether s.570(1) has application to these proceedings given that the applicant’s claims were based not only in the Fair Work Act but also the general law of contract. Does the addition of claims that the Fair Work Act has been breached, to what are otherwise proceedings concerning the breach of an employment contract engage s.570(1) such that its provisions apply to the proceedings as a whole?
As explained by White J in Stanley v Service to Youth Council Incorporated (No.3) (2014) 225 FCR 357, the answer is “yes”. In that case his Honour considered that the text of s.570(1) is such that where the proceedings can be said to be in relation to a matter arising under the Fair Work Act, the limitation provided upon the making of costs orders by s.570(2) will apply to the whole of the proceedings, not just the aspects of it which directly engage the Fair Work Act. Thus, where a single proceeding comprises several disparate causes of action arising from the same facts, including claims under the Fair Work Act, the requisite degree of connection for the purposes of s.570 will be satisfied and that section will have application across all causes of action in the proceedings. His Honour’s approach has been applied on a number of occasions: Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221 at [155]‑[158] (Tracey, Gilmour, Jagot and Beach JJ); Schroder-Turk v Murdoch University (No.2) [2019] FCA 1434; Rossetti v Aus Gold Mining Group Pty Ltd (No.2) [2019] FCA 1104 to name a few.
The first respondent has not attempted to address this argument at all – either in its primary submissions on costs or by any submission in reply. It has put its case on the basis that the Court has power to order costs and costs should follow the event. That is not so in the present proceedings.
I am satisfied that the present proceedings can be properly described as proceedings … in a court … in relation to a matter arising under the Fair Work Act for the purposes of s.570(1) of that Act. That not only includes the applicant’s claims against the respondents, but also the first respondent’s counterclaim against the applicant. It is part of the same proceeding.
Thus I can only make a costs order if one of the circumstances set out in s.570(2) of the Fair Work Act exists.
Subsection 570(2)(a) has no application. The proceedings were not vexatious nor instituted without reasonable cause. Although his success was modest, the applicant was nonetheless successful in part of his application.
Nor does s.570(2)(c) have any application.
The respondents advance their argument for a costs order, in part, by reference to an offer to settle made by the first respondent to the applicant that he did not accept. Had he accepted it, the amount payable to the first respondent would have been less than the amount he will have to pay under the judgment in this case (including pre-judgment interest). Leaving aside interest, the amounts for which I found the applicant liable to the respondent were similar in quantity to those set out in the offer.
A deliberate refusal to accept a timely offer to compromise proceedings can amount to an unreasonable act or omission which has caused the other party to incur costs for the purposes of s.570(2)(b) of the Act: Cugura v Frankston City Council [2012] FCA 1299 at [31]. A finding that there has been such a refusal, rather than a simple failure to respond by an unrepresented litigant, would weigh more heavily in favour of a conclusion that s.570(2)(b) of the Act is engaged.
The applicant argues that his deliberate rejection of the respondents’ offer was not unreasonable because:
a)the offer was made on 15 February, 2017, despite the proceedings having been on foot since on or about 9 May, 2015 shortly before the commencement of the trial in this matter and after all of the costs, save for the costs of the trial itself, had been incurred;
b)the offer was only open for acceptance until 5:00pm on 17 February, 2017 – that is to say for two days; and
c)the offer was that the applicant pay the first respondent the amount of $48,000 (including interest and GST).
The judgment to which the applicant is subject is only slightly higher than that contained in the offer.
I accept the applicant’s submissions. In this case both parties enjoyed degrees of success – perhaps the first respondent more than the applicant. But both had aspects of their case accepted and rejected. But the amount sought by the first respondent under its counterclaim was substantially rejected.
I am not satisfied that the applicant’s failure to accept the first respondent offer of compromise made on 15 February, 2017 was unreasonable in the circumstances. Nor am I satisfied that the failure to accept that offer caused the respondent to incur costs.
In those circumstances, the Court may not order the applicant to pay the respondents’ costs of the proceedings. Accordingly, there will be no order for costs on the applicant’s claim and no order for costs on the first respondent’s counterclaim.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 20 September 2019
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