Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors
[2017] FCCA 416
•10 March 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v NSWMOTEL MANAGEMENT SERVICES PTY LTD & ORS | [2017] FCCA 416 |
| Catchwords: INDUSTRIAL LAW – Costs application – interlocutory application under the Fair Work Act 2009 (Cth) – whether unreasonable act or omission – whether caused respondents to incur costs – no order for costs. |
| Legislation: Fair Work Act 2009 (Cth) ss.570, 570(2)(b) Fair Work Regulations 2009 (Cth) |
| Cases cited: Ryan v Primesafe [2015] FCA 8 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | NSW MOTEL MANAGEMENT SERVICES PTY LTD |
| Second Respondent: | MICHAEL PARKES |
| Third Respondent: | ROWENA SIOCO PARKES |
| File Number: | MLG 661 of 2016 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | On the papers |
| Date of Last Submission: | 2 March 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 10 March 2017 |
REPRESENTATION
| Solicitors for the Applicant: | Ms Ablett, Fair Work Ombudsman |
| Counsel for the Respondents: | |
Solicitors for the Respondents: | Stonier & Associates |
ORDERS
The respondents’ application for their costs of the directions hearing on 2 December 2016 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 661 of 2016
| FAIR WORK OMBUDSMAN |
Applicant
And
| NSW MOTEL MANAGEMENT SERVICES PTY LTD |
First Respondent
And
| MICHAEL PARKES |
Second Respondent
And
| ROWENA SIOCO PARKES |
Third Respondent
REASONS FOR JUDGMENT
Introduction
These reasons concern an application for costs of a directions hearing on 2 December 2016.
On 31 March 2016 the Fair Work Ombudsman (“the applicant”) commenced proceedings in this Court against NSW Motel Management Services Pty Ltd (“the first respondent”), Michael Parkes (“the second respondent”) and Rowena Siocco Parkes (“the third respondent”) (collectively “the respondents”).
In the substantive proceedings the applicant alleges the respondents contravened, or were involved in contraventions by the first respondent of various provisions of the Fair Work Act 2009 (Cth) (“the FW Act”), the Fair Work Regulations 2009 (Cth) and applicable modern awards arising from the employment of four Philippine nationals between 2013 and 2014 at three motels operated by the first respondent in Halls Gap, Queanbeyan and Taree.
The proceedings first came before the Court on 12 May 2016 when the following orders were made:
“1. The Respondents file and serve their Defences addressing the Statement of Claim filed on 31 March 2016 in these proceedings on or before 10 June 2016 at 4:00 pm.
2. The Applicant file and serve any Reply to the Respondents’ Defences and any Responses on or before 24 June 2016 at 4:00 pm.
3. The proceedings shall be subject to mediation to be held by 29 July 2016 though not before 11 July 2016 with the mediation to be conducted by a Registrar of the Court as mediator appointed by the Registrar of the Court.
4. The proceeding be listed for directions in the Federal Circuit Court of Australia at Melbourne at 10:00 am on 16 September 2016.
5. The parties have liberty to apply.”
Following a mediation the proceedings returned to Court on 16 September 2016 when the following orders were made:
“1. The Applicant file a Statement of Agreed Facts (including any issues in dispute), if any, on or by 28 October 2016.
2. The Applicant is to file and serve any affidavit material on which it intends to rely on the issue of liability on or before 2 December 2016.
3. The Respondent is to file and serve any affidavit material on which it intends to rely on the issue of liability on or before 3 February 2017.
4. The Applicant is to file and serve any affidavit material in reply on which it intends to rely on or before 3 March 2017.
5. The matter be re-listed for a directions hearing on 10 March 2017.
6. By 10 March 2017, each party:
a. is to advise the other party, in relation to each witness who has provided affidavit evidence in the proceeding on behalf of the other party, which witnesses are not required to attend for cross-examination; and
b. is to file and serve a table (in word format) setting out any evidentiary objections they may have to contents of any affidavits, to the admissibility of any other material to be relied upon by the other party, and a brief statement of the reason for such objection.
7. Any party the subject to any evidentiary objection is to file and serve their response to such objection by way of amendment to the table in 6(b) above, such response is to include a statement as to whether the objection is admitted or not, and if not, a brief statement as to the basis for admissibility and to serve that amended table on the party by no later than 17 March 2017.
8. The Applicant is to file and serve its written submissions no later than 28 days prior to the hearing.
9. The Respondents are to file and serve its written submissions no later than 21 days prior to the hearing.
10. The Applicant is to file and serve its written submissions in reply no later than 14 days prior to the hearing.
11. The matter be listed for a hearing in respect of liability with an estimated duration of 4 days on 1 August 2017.
12. The parties have liberty to apply.”
On 29 November 2016 the applicant sent correspondence to the Court copied to the respondents’ solicitors. The correspondence referred to the above orders and inter alia “enquired” whether the Court could list the matter for a directions hearing. On 30 November 2016 a notice of listing issued setting the matter down for a directions hearing on 2 December 2016.
At the directions hearing on 2 December 2016 Ms Ablett, solicitor, appeared on behalf of the applicant and Mr Kewley of Counsel appeared on behalf of the respondents. By that time the respondents’ solicitor, Ms Stonier, had filed an affidavit on 1 December 2016. Following submissions by both parties the following orders were made:
“1. Time be extended for compliance to order 1 made on 16 September 2016 until 23 December 2016.
2. Orders 2, 3, 4, 6 and 7 made on 16 September 2016 be vacated.
3. The Applicant file and serve any affidavit material on which it intends to rely on the issue of liability on or before 4pm on 3 February 2017.
4. The Respondents file and serve any affidavit material on which they intend to rely on the issue of liability on or before 4pm on 17 March 2017.
5. The Applicant file and serve any affidavit material in reply on which it intends to rely on or before 4pm on 18 April 2017.
6. By 5 May 2017, each party:
a. is to advise the other party, in relation to each witness who has provided affidavit evidence in the proceeding on behalf of the other party, which witnesses are not required to attend for cross examination; and
b. is to file and serve a table (in word format) setting out any evidentiary objection they may have to contents of any affidavits, to the admissibility of any other material to be relied upon by the other party, and a brief statement of the reason for such objection.
7. Any party the subject to any evidentiary objection is to file and serve their response to such objection by way of amendment to the table in 5(b) above, such response is to include a statement as to whether the objection is admitted or not, and if not, a brief statement as to the basis for admissibility and to serve that amended table on the party by no later than 26 May 2017.
8. The parties have liberty to apply.
9. Each party’s costs of this day be fixed at $2,887, and the question, whether and if so which party should have the costs of this day, be reserved to the adjourned date.
10. The Applicant file and serve an outline of submissions and any affidavit in support in relation to the question of costs 14 days prior to the adjourned date.
11. The Respondents file and serve an outline of submissions and any affidavit in support in relation to the question of costs seven days prior to the adjourned date.”
Costs application and parties submissions
The applicant filed an outline of submissions and an affidavit of Lyndall Ablett on 24 February 2017. The applicant’s submissions were:
“1. On 2 December 2016, the Court ordered that:
(a) the Applicant's and the Respondents' costs of the 2 December 2016 directions hearing (December Directions) be fixed at $2,887; and
(b) the parties were to file submissions on the question of whether costs should be awarded and if so, which party should be liable. The hearing on the issue of costs has been adjourned to 10 March 2017.
2. The Applicant submits that each party should bear its own costs. The Applicant does not seek its costs of the December Directions, and will oppose any submission that the Applicant pay the Respondents' costs of the December Directions.
A. EVIDENCE RELIED UPON
3. The Applicant relies upon the following:
(a) Statement of Agreed Facts filed on 22 December 2016 (SOAF);
(b) Affidavit of Sally Ann Stonier filed on 1 December 2016 (Stonier Affidavit); and
(c) Affidavit of Lyndal Catherine Ablett filed on 24 February 2017 (Ablett Affidavit).
B. LEGISLATIVE FRAMEWORK
4. Section 570 of the Fair Work Act 2009 (Cth) (FW Act) prescribes the circumstances in which costs may be awarded with respect to matters commenced under the FW Act. Section 570 of the FW Act only permits the award of costs:
(a) in the circumstances described in subsection 570(2)(a) — where the Court is satisfied that the party instituted the proceedings "vexatiously or without reasonable cause"; or
(b) in the circumstances described in subsection 570(2)(b) — where the Court is satisfied that the party's "unreasonable act or omissions" "caused" the other party to incur the costs; or
(c) in the circumstances described in subsection 570(2)(c) — where the Court is satisfied that the party "unreasonably refused to participate in a matter before the FWC" and "the matter arose from the same facts as the proceedings".
5. Section 570 of the FW Act displaces the Federal Circuit Court's usual broad discretion to award costs. The limitation on awarding costs under the FW Act reflects "a policy of protecting a party instituting proceedings from liability for costs": Ashby v Slipper (No. 2) [2014] FCAFC 67 (Slipper) at [35].
6. Paragraph [2228] of the Explanatory Memorandum to the Fair Work Bill 2008 states that "the ability of the courts to award costs in workplace relations matters has been limited since 1904 and is part of the policy of discouraging legalism in proceedings before industrial courts".
7. The case law concerning section 570 of the FW Act confirms that there are significant thresholds which must be met prior to the awarding of costs. The presumption is that costs will not be awarded against a party under section 570 of the FW Act unless there are exceptional circumstances justifying the making of such an order: Slipper at [35] citing Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FOR 275 at [60].
8. Further, the discretion conferred by the confined terms of subsection 570(2) of the FW Act is required to be exercised cautiously and the case for its exercise should be clear: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] per Bromberg J; Ryan v Primesafe [2015] FCA 8 at [64] per Mortimer J.
9. The only relevant consideration in determining whether a party to this proceeding should be liable for the costs of the December Directions is whether there was any "unreasonable act or omission" that "caused" the other party to incur the costs as set out in subsection 570(2)(b) of the FW Act.
10. The Respondents face a high threshold in establishing that costs should be awarded against the Applicant under subsection 570(2)(b) of the FW Act. The Respondents bear the burden of identifying and proving, and the Court must accept, that the Applicant:
(a) engaged in an "unreasonable act or omission", and
(b) such alleged unreasonable act or omission "caused" the Respondents to incur the costs.
11. It is well−established that the exercise of the Court's discretion under subsection 570(2)(b) of the FW Act is not engaged even where:
(a) a party does not conduct litigation in the most efficient way;3
(b) a concession is made late;
(c) a party may have acted in a different or timelier fashion;or
(d) a party has adopted a genuine but misguided approach.
12. The question of whether a party has engaged in an "unreasonable act or omission" within the meaning of subsection 570(2)(b) of the FW Act depends on an objective analysis of the particular circumstances of the case.
13. As set out in paragraph 2 above, the Applicant submits that there is no basis for the imposition of costs in respect of the December Directions for the reasons set out below.
14. To the extent that the Respondents rely upon the matters contained in the Affidavit of Sally Ann Stonier sworn on 1 December 2016 (Stonier Affidavit) as a basis for the imposition of costs against the Applicant, it appears that the Respondents' sole claim against the Applicant would be that the Applicant allegedly failed to provide an adequate reason regarding why it was unable to comply with the 16 September 2016 Orders of this Court (September Orders) to file its evidence by 2 December 2016. These submissions have been prepared on the basis of this allegation and also the potential allegation that it was unreasonable for the Applicant to request that the Court relist the matter for a further directions hearing.
15. The Applicant submits that, taking into account all the circumstances of these proceedings, the Applicant has not engaged in any unreasonable act or omission that would enable the Court to make an order for costs pursuant to section 570 of the FW Act.
C. UNREASONABLE ACT OR OMISSION
16. The Applicant contends that:
(a) an sufficient explanation for the Applicant seeking the Respondents' consent to proposed orders to amend the Court timetable was provided on two occasions;
and
(b) there was no prejudice to the Respondents in consenting to the extension to the timetable making the request reasonable.
Sufficient explanation for the request for an extension to file evidence
17. The Stonier Affidavit asserts that "[n]o explanation was provided for the basis of the request for the adjournment." The Applicant submits that this is not the case and a reasonable explanation was provided to the Respondents on multiple occasions.
18. The initial request for the parties to enter into consent orders allowing for an extension of the filing of the Applicant's evidence was made by the Applicant on 16 November 2016 (Initial Request).
19. Ms Stonier's initial reservation regarding the Proposed Orders was whether the Proposed Orders prevented the parties from entering into a SOAF. In a telephone conversation between Ms Ablett and Ms Stonier on 18 November 2016, Ms Ablett informed Ms Stonier that the absence of an order regarding the filing of a SOAF did not prevent the parties from entering into one and filing it with the Court. Ms Ablett went on to emphasise that an extension to the date for the Applicant to file its evidence allowed for more time for the parties to possibly reach an agreement.
20. While the negotiations regarding the request for an extension for the filing of evidence were occurring, the Applicant and the Respondents were still actively negotiating the proposed SOAF. The Applicant explained on 23 November 2016 and 24 November 2016 that the ongoing negotiations for the SOAF necessitated the Applicant's need for more time for the preparation of its evidence.
21. The Applicant also relied on the lack of prejudice to the Respondents in consenting to the proposed Orders in making its request. The proposed orders did not amend the hearing dates, and proposed for the filing of all evidence including objections to be completed by 26 May 2017, allowing over a month between when objections to evidence would be finalised and when the first submissions on the proceedings were due to be filed and served.
Negotiating the SOAF
22. The Respondents were informed that the Applicant was relying on the continuing negotiations of the SOAF as a basis for making the Initial Request on the following occasions:
(a) On 23 November 2016, Acting Principal Lawyer, James Robertson (Mr Robertson) stated to Ms Stonier that the work in negotiating a SOAF had continued past the date of which is was due to be filed; and
(b) On 24 November 2016, Ms Ablett explained to Ms Stonier negotiating a SOAF impacts on the evidence that the Applicant will file and that the fact that negotiations for a SOAF have continued to almost a month after the filing date continues to impact the Applicant's ability to prepare its evidence.
23. While the negotiations regarding the request for an extension for the filing of evidence was occurring, the Applicant and the Respondents were also still actively negotiating the proposed SOAF.
24. It is notable that eventually (during the December Directions), Counsel for the Respondents, Mr Kewley, indicated to the Court that his clients in fact had no objection to the extension of time sought by the Applicant:
...perhaps I could assure my learned friend and the court by indicating that I have no particular objection to times being extended along the lines that my learned friend had indicated. I'm content to say that in open Court.
25. The SOAF was ultimately signed by both parties and filed by the Applicant on 22 December 2016, in compliance with the Court's orders made on 2 December 2016. The date that the SOAF was actually filed, was 20 days after the date that the September Orders provided the Applicant to file its evidence on liability. That is, the September Orders required the Applicant to file its evidence on 2 December 2016 but the SOAF was not filed until 22 December 2016.
No prejudice
26. The Applicant informed the Respondents that it was also relying on the lack of prejudice to the Respondents in requesting their consent to the proposed orders on the following occasions:
(a) on 16 November 2016, the Initial Request outlined that the proposed orders did not impact the listed hearing date;
(b) on 23 November 2016, Mr Robertson again outlined the lack of prejudice to the Respondents in the Proposed Orders as the hearing was not for a further nine months; and
(c) on 24 November 2016, Ms Ablett again emphasised the lack of prejudice to the Respondents in extending the timetable for filing as the liability hearing was not listed until August 2017.
27. The Applicant provided a sufficient explanation to the Respondents for why it requested further time to adequately prepare its evidence.
The Applicant's request for the matter to be relisted before the Court
28. In making its requests that the Respondents enter into the proposed orders, the Applicant explained to the Respondents on multiple occasions that, if the Respondents did not consent to the proposed orders, the Applicant would be required to have the matter relisted before the Court.
29. The Applicant informed the Respondents of its intention to relist the matter on the following occasions:
(a) on 18 November 2016, Ms Ablett informed Ms Stonier that if, the Respondents did not consent the Applicant would likely get the matter listed for a further directions hearing;
(b) on 18 November 2016, Ms Ablett confirmed that the Applicant would seek instructions to have the matter relisted if the Respondents did not consent to the Proposed Orders;
(c) on 23 November 2016, Mr Robertson informed Ms Stonier that if the Respondents refuse to consent to the proposed Orders the Applicant intended to write to his Honours Associate to relist the matter for a further directions;
and
(d) on 24 November 2016, Ms Ablett explained to Ms Stonier that if the Respondents did not consent to the Proposed Orders the Applicant would seek to have the matter called before His Honour.
30. On 29 November 2016, Ms Ablett wrote to the Court respectfully enquiring "whether his Honour would be minded to make the Proposed Orders, or alternatively, whether his Honour would be minded to list the mater for a directions hearing as soon as possible". The Court then listed the matter for the December Directions.
31. The Respondents were given ample notice about the Applicants intention to ask that he matter be relisted for a further directions hearing if the Respondents did not consent to the Proposed Orders. The Applicant's request to the Court on 29 November 2016 was reasonable.
E. ORDERS SOUGHT
32. The Applicant submits that there was no unreasonable act or omission on the part of the Applicant that would trigger the Respondents' entitlement to a costs order under section 570 of the FW Act.
33. The Court should order that each party bear their own costs of the 2 December 2016 directions hearing.”
[Footnotes from original omitted]
The respondents filed written submissions on 2 March 2017. The respondents’ submissions were:
“SUBMISSIONS OF THE RESPONDENTS ON COSTS
1. The Respondents seek their costs of the Applicant’s application for the court’s indulgence to allow it more time to prepare its affidavit materials, which was heard and determined on 2 December 2016. Those costs were fixed on that day in the sum of $2,887.
2. This Court ordered the Applicant to file its affidavit material in support of its own case by 2 December 2016. That order was made with the Applicant’s consent eleven weeks earlier. The deadline fell more than eight months after the Applicant filed its statement of claim. The Court can presume that the Applicant was independently satisfied that it had a proper basis to make all of its allegations at that time.
3. Notwithstanding the many months that passed thereafter and the Applicant’s assertion in writing to the Respondents on 2 November 2016 that the Applicant was ‘concentrating on preparing its evidence’,1 the Applicant sought extra time to prepare materials for the case a fortnight later.
4. The extension of time was sought without any meaningful explanation for the delay, despite the Respondents’ repeated invitations to the Applicant to provide one. On 16 November 2016, they first requested the indulgence in writing but gave no reason. The same request without any reason was made on 21 November 2016. The third request carried the explanation that the extension was needed ‘because of what has transpired in this proceeding’. No explanation of what this was referring to was provided. Even at the hearing for the Applicant’s application for an extension of time on 2 December 2016, no evidence was filed in support of the application.
5. From the Applicant’s affidavit in support, it now seems the Applicant’s claim that the reason they needed the extra time was because the statement of agreed facts was in discussion. The delays in that discussion were predominantly caused by the Applicant taking multiple periods of four weeks to review a six-page document, which had been reviewed by them previously. The delays were also caused by the solicitors for the Applicant refusing requests from 8 November 2016 to meet to discuss the document. (In the process, the solicitor for the Applicant took the opportunity to scold the Respondents’ solicitor for a telephone call between counsel initiated on the Respondents’ behalf.)
6. Looked at as a whole, the Applicant’s conduct in respect of the application for an extension of time to file its material meets an exception to the default no-costs rule under the Fair Work Act 2009 (Cth). In particular, this matter falls within the s 570(2)(b) exception dealing with ‘unreasonable act[s] or omission[s]’ which cause the other party to incur costs.
7. The Applicant acted unreasonably by seeking an extension of time:
a. Without providing any meaningful basis for needing the extension before and even at the hearing of the application for that extension of time;
b. Eight months after they were under an obligation to know all of the evidence and sources that provided a proper basis for the allegations the Applicant made at that time;
c. In circumstances where the purported basis for the delay was, in truth, the result of its own repeated inaction in respect of the statement of agreed facts; and
d. Where the Applicant had repeatedly refused requests to meet to finalise the document they now rely upon as being the reason for the request for additional time.”
8. For all of the above reasons, the Respondents should not be left to incur the expense of the Applicants seeking an indulgence of this Court on 2 December 2016, and costs should be awarded to them as a result.”
[Footnotes from original omitted]
Relevant provisions
Given the position of the applicant all that remains to be determined is the issue of the respondents’ application for their costs of the directions hearing. The respondents’ application for costs falls to be determined by reference to the provisions of s.570 of the FW Act which provides:
“(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction 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
…”
In Ryan v Primesafe [2015] FCA 8, Mortimer J dealt with an application for costs arising from proceedings under the FW Act. In relation to the provisions in s.570 of the FW Act generally it was said:
“64.I accept the general import of the authorities relied on by the applicant and Mr McDonald in their written submissions about the significance of the threshold set by s570(2) of the Fair Work Act. Although some of the authorities relied on dealt with the predecessor provisions to s570, there is no difference in substance in the way the threshold is expressed. The discretion conferred by the confined terms of
s570(2)should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395at [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
s570 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. There is an almost identical provision in s611 of the Fair Work Act, giving the Fair Work Commission a similar costs power, conditioned by similarly-worded considerations. The predecessor provisions, and the conscious broadening of the statutory terms used in s570, are traced by the Full Court in Australasian Meat Industry Employees’ Union v Fair Work Australia (No 2) (2012) 203 FCR 430; [2012] FCAFC 103 at [3]- [4] per Jessup and Tracey JJ.65.None of those propositions deny the Court’s ability to find that one or both of the two preconditions expressed in
ss570(2)(a) and (b) exist where the factual circumstances warrant it. The legislative policy behind a provision such as s570(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.”In Tsilibakis v Transfield Services (Australia) Pty Ltd (No. 2) [2015] FCA 1048 White J said:
“It is not necessary to canvass in detail the authorities bearing upon the application of s 570. The relevant principles are well established. Section 570 and its predecessors are to be understood as reflecting a legislative policy of protecting parties to proceedings under the FW Act from orders for costs so that parties with a genuine grievance will not be discouraged from pursuing a remedy to which they may be entitled, or from pursuing litigation in the manner which they deem best, for fear of an adverse costs order: Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143, (2008) 170 FCR 574 at [29]; Ashby v Slipper (No 2) [2014] FCAFC 67, (2014) 314 ALR 84 at [35]. 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; (2006) 156 FCR 275 at [60].
The questions of whether a party’s act or omission was unreasonable and whether such an act or omission has caused the other party to incur costs are to be determined having regard to the particular circumstances of each case: Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392 at [27][28]. The fact that a party has conducted the litigation inefficiently, has made concessions relatively late, may have acted in a different or more timely fashion, or has adopted a genuine but misguided approach will be relevant to, but are not conclusive of, the party having acted unreasonably in the relevant sense: Clarke at [29][30]...”.
The effect of s.570 of the FW Act is to limit the Court’s power in relation to any order for costs in respect of proceedings under the FW Act. As a result the Court may only order a party to such proceedings to pay the costs of another party only if the Court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or that the party’s unreasonable act or omission caused the other party to incur costs.
No order for costs can be made unless it is demonstrated one or more of the abovementioned exceptions in s.570(2) of the FW Act has been established. Even then, the award of costs remains within the discretion of the Court (cf Ashley v Slipper (No 2) [2014] FCAFC67). Given the submissions of the parties, I now turn to consider the ground upon which the respondents’ rely in light of the approach to the relevant provisions set out about.
Consideration
The basis for an award of costs against the applicant under s.570(2)(b) of the FW Act that is alleged by the respondents is unreasonable acts or omissions by the applicant and that this caused them to incur costs. The respondents rely on the affidavit of their solicitor in support of such an order and the submissions referred to earlier in support of that application.
Whilst pursuant to s.570(2)(b) of the FW Act the Court may order a party to pay costs if the Court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs, such an order is discretionary.
For the purposes of s.570(2)(b) of the FW Act, the Court must be satisfied that two criteria have been fulfilled, as set out in Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 (“Clarke”) they are:
“(a) that a party must have engaged in an unreasonable act or omission; and
(b) that the unreasonable act or omission must have caused another party to incur costs in connection with the proceedings.”
In Rentuza v Westside Auto Wholesale [2009] FMCA 1022 (“Rentuza”) Lucev FM (as His Honour then was) considered the issue of whether an unreasonable act or omission had caused a party to incur costs for the purposes of s.570(2)(b) of the FW Act. At paragraphs [27] to [28] in Rentuza His Honour said:
“27.Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case.
28.The exercise of the discretion in s.570(2)(b) is not necessarily engaged because:
(a) a party does not conduct litigation efficiently;
(b) a concession is made late;
(c) a party may have acted in a different or timelier fashion;
(d) a party has adopted a genuine but misguided approach.” [Footnotes from original omitted]
The provisions on which the respondents rely to ground their application for costs are one of the exceptions to the general rule that in proceedings under the FW Act each party bears its own costs. Moreover, as the decision in Clarke (supra) makes clear the Court still retains a discretion on the question of costs.[1]
[1] See Clarke at [29].
The failure to comply with Court directions can constitute an unreasonable act or omission.[2] However as is noted in the authorities when the issue of compliance with directions arises the appropriate course is to apply to be relieved of that obligation.[3] That is what the applicant did in this case.
[2] See Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879.
[3] Ibid at [7].
The directions made on 16 September 2016 provided for liberty to apply. The correspondence between the parties referred to in the affidavit material upon which they relied makes clear the applicant raised with the respondents in November 2016 the need to extend time for filing of their material given the ongoing negotiations about the proposed statement of agreed facts. The need to do so was canvassed in discussions between the parties solicitors on 18 November 2016 and confirmed in writing later that day.[4]
[4] See annexures LCA 8, 9, 10 to affidavit of Lyndal Catherine Ablett filed on 24 February 2017.
The respondents’ solicitor was said to be seeking instructions and was pressed for a response on this issue on both 21 November 2016 and again on the morning of 22 November 2016. It was only late on 22 November 2016 that the respondents’ solicitor confirmed in writing her instructions “at present” were not to consent to the extension request. There was further correspondence and telephone attendances between the parties solicitors which confirmed that the delay in settling the statement of agreed facts between Counsel was, in the view of the applicant, what impacted on what they needed to file and what they did not by way of affidavit material.[5]
[5] See Annexure LCA 15 to affidavit of Lyndal Catherine Ablett filed 24 February 2017.
This resulted in a further representation from the respondents’ solicitor that she would get instructions. This was over a week before the directions hearing on 2 December 2016 and two clear business days before the applicant finally sought to invoke the liberty in the existing orders for that purpose. Despite further contact between the respective solicitors there was no formal response from the respondents’ solicitors until after close of business on 28 November 2016 which reiterated the earlier position.
These are proceedings seeking civil penalties brought by the applicant which has a role in ensuring the FW Act is complied with. There is considerable public interest and benefit in issues in any litigation being narrowed, and the use of statements of agreed facts facilitate that outcome. Necessarily the use of such documents limit or narrow the matters a Court is required to decide, and as such impact on what evidence from each of the parties would be required.
In this context seeking an extension in the time for filing its affidavit evidence, the applicant was arguably acting to avoid both parties incurring unnecessary costs occasioned by filing affidavit material relevant to issues that no longer are in contest. The respondents’ solicitor was told this more than a week before the directions hearing at which ultimately there were adjustments to the filing timetable in any event which were not opposed.
In the particular circumstances of this matter I am not satisfied there has been an act or omission by the applicant which caused the respondents to incur costs. Nor on the material before the Court could I be satisfied that any act or omission by the applicant caused the respondents to incur costs.
In the circumstances of this particular case, I would in any extent decline to exercise my discretion to order costs.
Conclusion
Accordingly there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Date: 10 March 2017
2
11
4