Duck v Airservices Australia (No 3)

The matter before the Federal Court of Australia involved an application for costs against Augusta Ventures Limited (AVL), a non-party litigation funder, in an industrial class action. The applicant, Duck, sought a costs order against AVL, which was not a party to the proceedings but was funding the case against Airservices Australia. The court was required to decide whether it had the power to order costs against a non-party funder and, if so, whether it should exercise its discretion to do so in this case.

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.