George v Northern Health (No.4)
[2011] FMCA 945
•28 November 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| GEORGE v NORTHERN HEALTH (No.4) | [2011] FMCA 945 |
| INDUSTRIAL LAW – General protections application – substantive application dismissed – application for costs by respondent – whether substantive application was instituted vexatiously or without reasonable cause – application refused. |
| Fair Work Act 2009 (Cth) s.570(2)(a) |
| Bency George v Northern Health [2011] FMCA 445 Bency George v Northern Health (No.2) [2011] FMCA 853 Bency George v Northern Health (No.3) [2011] FMCA 894 Nimmo in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No. 2) (2011) FCA 728 Khiani v Australian Bureau of Statistics [2011] FCAFC 109 Jonsson v Theodore Hotel Co-Operative Associate Ltd [2007] FMCA 1199 Construction Forestry Mining and Energy Union and Others v Clarke (2008) 170 FCR 574 Saxena v PPF Asset Management Ltd [2011] FCA 395 |
| Applicant: | BENCY GEORGE |
| Respondent: | NORTHERN HEALTH |
| File Number: | (P)MLG 1571 of 2010 |
| Judgment of: | O’Sullivan FM |
| Hearing date: | 28 November 2011 |
| Date of Last Submission: | 28 November 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 28 November 2011 |
REPRESENTATION
| The Applicant: | Appeared in person |
| Counsel for the Respondent: | Mr Millar |
| Solicitors for the Respondent: | Middletons |
ORDERS
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
(P)MLG 1571 of 2010
| BENCY GEORGE |
Applicant
And
| NORTHERN HEALTH |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
On 28 November 2011, the Court made orders for the reasons set out in Bency George v Northern Health(No. 3) [2011] FMCA 891 dismissing an application filed by Bency George (“the applicant”) on
12 November 2010.
Background
The background to these proceedings and this application is set out in Bency George v Northern Health (No.3) [2011] FMCAfam 891 at paragraphs [2] to [18] and for the purposes of these reasons it is unnecessary to repeat it.
Following on from the orders made for the reasons set out in Bency George v Northern Health (No.3) Northern Health (“the respondent”) has now sought an order for costs.
The legislation
The provisions in relation to costs under the Fair Work Act 2009 (Cth) (“the Fair Work Act”) are governed by s.570 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
(c)the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before FWA;
(ii) the matter arose from the same facts as the proceedings.”
Submissions
The respondent relies in support of its application for an order for costs on section 570(2)(a) of the Fair Work Act. That is, the respondent says the applicant instituted these proceedings vexatiously or without reasonable cause.
I have had the benefit of submissions from Mr Millar of Counsel on behalf of the respondent in support of its argument that the Court should make an order for costs against the applicant.
In the broad it was submitted the application didn’t establish the relevant requirements necessary to make out the claims. It was also submitted that it had always been the respondent’s case that there was no connection between the relevant attribute of the applicant and the action taken and that the reason for the applicant’s termination was poor performance.
It was submitted that the applicant had run the substantive proceedings as if it was an unfair dismissal proceeding. It was submitted that the only thing the applicant had going for her was the reverse onus of proof set out in s.361 of the Fair Work Act and the respondent ought not be denied the right to seek its costs in the face of an application, which it was submitted, was vexatious or without reasonable cause.
Counsel provided a copy of the decision of Reeves J in Nimmo in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No. 2) (2011) FCA 728. Counsel identified, as relevant for the purposes of assessing the application for costs, paragraphs 28-30 of that decision which provided:
“28.In determining an application to which this section applies, the relevant question is whether the proceedings had reasonable prospects of success at the time they were instituted, not whether they ultimately failed: see R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473 per Gibbs J, Thompson at 471 and Bostik at 262. I might add that this principle must apply with even more force in the present type of inquiry where an applicant may succeed in showing a number of irregularities happened in the election and yet fail to persuade the Court they could have affected the result of the election as a real possibility under s 206(5) of the Act.
29.It is also relevant to consider whether the application for the inquiry depended upon the determination of the disputed facts, or the resolution of arguable points of law: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264–265 and Spotless at [10]. This has to be established as a matter of objective fact: see Spotless at [13] and Automotive, Food, Metals, Engineering, Printing and Kindred Industry Union v Nestle Australia Limited [2005] FCA 717 at [3]–[4].
30.Finally, the test to be applied in relation to the expression “without reasonable cause” is similar to that adopted in an application for summary judgment, viz “so obviously untenable that it cannot possibly succeed”, “manifestly groundless” or “discloses a case which the Court is satisfied cannot succeed”: see Heidt at 272–273; Geneff v Peterson (1986) 19 IR 40 at 87–88; Hatchett at 327 and Crozier at [12]. I might add that these statements express the test for a summary judgment before the introduction of s 31A of the Federal Court of Australia Act 1976 (Cth). However, I consider they are apt under s 329 of the Act because s 31A of the Federal Court of Australia Act 1976 (Cth) uses the expression “no reasonable prospects of success”, rather than “no reasonable cause” and, more importantly, s 31A also contains an express statutory exclusion (not present in s 329) of the need to show the proceedings are hopeless or bound to fail: see s 31A(3).”
The applicant made it clear that she opposed the orders sought by the respondent. The applicant denied that the proceedings were instituted vexatiously or without reasonable cause.
Consideration
In Khiani v Bureau of Statistics [2011] FCAFC 109, the Full Court of the Federal Court at paragraphs 50 to 53 dealt with an application for costs on the basis that the appeal which had been dismissed was instituted without reasonable cause. The Full Court said:
“51.The submission on behalf of the respondent was based on the proposition that the appeal was instituted without reasonable cause. Counsel for the respondent invoked what was said by Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-265, cited in Re Ross; Ex parte Crozier [2001] FCA 1665 (2001) 111 IR 282 at [9]:
[O]ne way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. 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.
The authorities are summarised in Nimmo, in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [27]-[30] per Reeves J.
52.It is true that the appellant has failed in her appeal. This does not of itself establish that she instituted the appeal without reasonable cause. In passing up the opportunity to seek costs from the primary judge, the respondent appears to have conceded that the appellant’s case was arguable at that point. If that were the case, it is hard to see how the appellant’s case became unarguable on appeal. Although the grounds she argued demonstrated her lack of understanding of the operation of Pt 3-1 of the Fair Work Act, the appellant did have in her favour the primary judge’s error as to the onus of proof on the causation issue. Although the appellant has failed on that issue, it might be said to have afforded her an arguable case on appeal. In the circumstances, the better view is that s 570(1) of the Fair Work Act operates to deprive the Court of the normal power to award costs in favour of the successful respondent.
53.There can be no order as to the costs of the appeal.”
The Court may also 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 but this was not a ground relied on by the respondent.
In Saxena v PPF Asset Management Ltd [2011] FCA 395 Bromberg J said of the provisions in relation to costs in the Fair Work Act at paragraphs 5-6 that:
“5.The predecessor provision to s 570 was considered by a Full Court of this Court in Construction, Forestry, Mining and Energy Union and Others v Clark (2008) 170 FCR 574 where at [29] the Court said:
Indeed, while courts should use the discretion in section 824(2) to ensure that parties to litigation arising from the WR Act do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise a discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation under the WR Act in the manner which they deem best.
6.With great respect to the observations made in CFMEU v Clark, I wholeheartedly agree that this Court ought be very careful indeed to exercise the discretion provided by s 570(2) and should not do so other than in a clear case. The limited discretion conferred on the Court by that subsection ought not become the basis for arguments about costs in relation to any and every transgression in the conduct of a case.”
Finally in Jonsson v Theodore Hotel Co-Operative Associate Ltd [2007] FMCA 1199 Burnett FM applied Kanan and said at [31]:
“…in order to determine whether the proceeding was commenced without reasonable cause it is necessary to consider whether or not on the Applicant’s material alone a proper basis for the proceeding can be made out.”
In this matter, having regard to the reasons set out in Bency George v Northern Health (No.3) in particular those set out at paragraphs 50 to 92 inclusive. I am not satisfied, having regard to the test propounded in the authorities set out earlier that the proceedings were instituted vexatiously or without reasonable cause.
Moreover, and in relation to section 570 of the Fair Work Act and in light of the comments in Saxena (supra), and noting that ultimately the matter is a discretionary exercise I would refuse to exercise my discretion in this case. For those reasons I refuse to make an order for costs.
I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of O’Sullivan FM
Date: 28 November 2011
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