FEDERAL COURT OF AUSTRALIA
Duck v Airservices Australia (No 3) [2021] FCA 304
File number: ACD 97 of 2017 Judgment of: BROMWICH J Date of judgment: 30 March 2021 Catchwords: STATUTORY INTERPRETATION – application for costs against non-party funder in industrial class action – whether power to order costs against non-party – whether in the exercise of discretion costs orders should be made against funder – where the Court cannot make an ordinary costs order against a party under s 43 of the Federal Court Act 1976 (Cth) because of s 570 of the Fair Work Act 2009 (Cth) – held: s 570 does not prevent the Court from making a non-party costs order as provision only applies to a party to proceedings
COSTS – whether s 570 of the Fair Work Act still a relevant consideration in the decision to award costs against a non-party – whether the general rule that costs follow the event applies – whether policy considerations of access to justice can be determinative – whether non-party was put on notice that costs would be sought because of application for security for costs in a concurrent case – where separate question that was recognised to be decisive to case raised for hearing separately and decided adversely, meaning that a full trial was avoided – where no suggestion that litigation was instituted vexatiously or without reasonable cause – where speculative submissions as to effect of decision on non-party funder schemes of limited assistance – held: underlying purpose of s 570 cannot be wholly set aside in favour of more general principles and discretion relating to the award of costs – held: not in the interests of justice to make a costs order against the non-party funder – application dismissed
Legislation: Civil Procedure Act 2005 (NSW) ss 155, 181
Federal Court of Australia Act 1976 (Cth) ss 33ZF, 37M, 37N, 43
Fair Work Act 2009 (Cth) s 570
Cases cited: Arklow Investments Ltd v Maclean (High Court of New Zealand, Fisher J, unreported, 19 May 2000)
Arundel Chiropractic Centre Pty Ltd v Deputy Commissioner of Taxation [2001] HCA 26; 179 ALR 406
Ashby v Slipper (No 3) [2015] FCAFC 9; 317 ALR 621
Augusta Ventures Limited v Mt Arthur Coal Pty Ltd [2020] FCAFC 194; 384 ALR 340; 300 IR 446
Bannon v Nauru Phosphate Royalties Trust (No 3) [2017] VSC 214; 51 VR 362
BMW Australia Ltd v Brewster; Westpac Banking Corp v Lenthall [2019] HCA 45; 374 ALR 627
Duck v Airservices Australia (No 2) [2019] FCA 1148
Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2004] UKPC 39; 1 NZLR 145; 1 WLR 2807
Gore v Justice Corporation Pty Ltd [2015] FCAFC 9; 119 FCR 429
Kebaro Pty Ltd v Saunders [2003] FCAFC 5
Knight v FP Special Assets Limited [1992] HCA 28; 174 CLR 178
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- Case
- [2021] FCA 304
- Decision Date
CaseChat Overview and Summary
The court considered the statutory interpretation of sections 43 and 570 of the Fair Work Act 2009 (Cth) and the Federal Court Act 1976 (Cth). It found that while section 570 did not prevent the court from making a non-party costs order, it was not in the interests of justice to make such an order in this case. The court found that AVL should have been on notice that section 570 did not provide a shield from a costs order in the way it did for an individual applicant. However, the absence of notice that a costs application might be made remained a relevant consideration in relation to the interests of justice. The court also noted that the speculative submissions as to the effect of the decision on non-party funder schemes were of limited assistance.
The court concluded that the underlying purpose of section 570 could not be wholly set aside in favour of more general principles and discretion relating to the award of costs. It found that it was not in the interests of justice to make a costs order against the non-party funder. The court dismissed the application for a costs order against AVL and made no order as to costs.
This decision highlights the importance of considering the underlying purpose of section 570 of the Fair Work Act in determining whether to make a costs order against a non-party funder. The court found that while the absence of notice that a costs application might be made was a relevant consideration, it was not determinative. The court also noted that making a costs order against a non-party funder could have a chilling effect on the bringing of large volume, small claim, class action cases involving difficult issues where success is far from assured.
Orders
Orders of the court
1. The respondent’s application for a costs order to be made against Augusta Ventures Limited, the non-party litigation funder for the applicant, be dismissed.
2. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Finally, Airservices Australia submits that lack of notice is but one factor that needs to be balanced with other discretionary considerations, citing Lander J in Vestris v Cashman at 472, and Kebaro Pty Ltd v Saunders. The respondents also submit that there was no obligation to provide notice of an intention to seek costs in circumstances where they had read of AVL’s commitment to pay any adverse costs order in its funding agreement, citing Gore v Justice Corporation Pty Ltd at [48]. Consideration and conclusions While AVL has correctly identified that I am not bound by the decision of the Full Court in Mt Arthur Coal, I accept their submission that the consideration of the application of s 570 is of assistance in the present case, but find that it is of limited and non-determinative assistance because the assertions relied upon predictions about what would happen in other cases in the future, rather than by reference to what actually occurred in this case. I would read the Full Court in Mt Arthur Coal as finding that the underlying purpose of s 570 cannot be wholly set aside in favour of more general principles and discretion relating to the award of costs. However, I consider I should accept the effect at least of Airservices Australia’s submission that because the Mt Arthur Coal decision related to an order for security for costs, the contextual importance of s 570 is lessened. The relevance of s 570 in a given Fair Work Act class action case may be great, small or non-existent, but that is a question to be answered in context and not in the abstract, in the exercise of the Court’s broad costs discretion. I reluctantly conclude that had this proceeding gone to trial, and only there failed, Airservices Australia’s arguments on costs would have been more likely to prevail, notwithstanding the concerns I have with that being seen to be the most likely outcome. I consider that such an outcome bears with it practical consequences for the efficacy of s 570 in large volume, small claim, class action cases involving difficult issues where success is far from assured. In my view this is likely to have a chilling effect on the bringing of such cases, undermining the objective of s 570 at a practical level. My reasons above give some indication as to how a non-party funder might be able to bring a given case addressing the indirect impact reasoning applied by the Full Court in Mt Arthur Coal, but I am not satisfied that AVL achieved that objective in this case. The burden of assessing the risk to the extent necessary to make out the indirect impact may just be too great in a given case. I am not satisfied that any denial of procedural fairness on the part of the respondents has been established. The plain words of s 570 mean that AVL should have been on notice that the provision did not in terms provide a shield from a costs order in the way that it does to an individual applicant in Fair Work Act proceedings. However, the absence of notice that a costs application might be made remains a relevant consideration in relation to the interests of justice. For completeness, I do not accept that AVL was put “on notice” that costs would be sought against it in this proceeding because security for costs were sought against it in the completely separate proceeding of Turner v Tesa Mining.