Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd
[2015] FCCA 468
•20 March 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HENSHALL v PETER STEVENS MOTORCYCLE RETAIL GROUP PTY LTD | [2015] FCCA 468 |
| Catchwords: INDUSTRIAL LAW – Costs application – where proceedings under Fair Work Act were discontinued – whether applicant’s unreasonable acts or omissions caused respondent to incur costs – no order as to costs. |
| Legislation: Fair Work Act 2009 (Cth), ss.570, 570(2)(b) |
| Henshall v Peter Stevens Motorcycle Retail Group PtyLtd [2014] FCCA 1490 Ryan v Primesafe [2015] FCA 8 |
| Applicant: | STEPHEN HENSHALL |
| Respondent: | PETER STEVENS MOTORCYCLE RETAIL GROUP PTY LTD |
| File Number: | MLG 557 of 2014 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | On the papers |
| Date of Last Submission: | 17 March 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 20 March 2015 |
REPRESENTATION
| Solicitors for the Applicant: | Victoria Legal Aid |
| Solicitors for the Respondent: | Davies Lawyers |
ORDERS
The application in a case filed 25 February 2015 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 557 of 2014
| STEPHEN HENSHALL |
Applicant
And
| PETER STEVENS MOTORCYCLE RETAIL GROUP PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons concern an application for costs under the Fair Work Act 2009 (Cth) (“the Fair Work Act”). It was agreed between the parties that the decision would be dealt with on the papers, once the parties had filed their respective material.
By way of background to this costs decision, Mr Stephen Henshall (“the applicant”) commenced these proceedings by application filed on 28 March 2014. The applicant alleged inter alia that the Peter Stevens Motorcycle Retail Group Pty Ltd (“the respondent”) had contravened the Fair Work Act.
A certificate was issued by the Fair Work Commission on 21 February 2014 making the relevant date for the filing of the substantive application 7 March 2014.
On 12 May 2014 the substantive application came before the Court. The respondent had yet to file a response and the substantive application had been filed 21 days late. The matter was adjourned to
20 August 2014 and the applicant and respondent were directed to file submissions in relation to the issue of whether the Court should extend time for the filing of the substantive application.
The applicant filed an application in a case to extend time on 30 May 2014, an affidavit in support and submissions. The respondent filed and outline of submissions and affidavit on 24 June 2014. The parties subsequently agreed the Court would decide the application to extend time on the written submissions. Ultimately on 11 July 2014 and for the reasons set out in Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2014] FCCA 1490, the Court granted an extension of time and the proceedings were adjourned for mention on 20 August 2014.
On 30 July 2014 the following further interim orders were made:
“BY CONSENT THE COURT ORDERS THAT:
1.The respondents file and serve points of defence by
25 August 2014.
2.The directions hearing listed for 20 August 2014 be vacated.
3.The proceedings shall be subject to mediation to be held by the end of October 2014 though not before 26 August 2014 with the mediation to be conducted by a Registrar of the Court as mediator appointed by the Registrar of the Court.
4.In the event the matter does not resolve at mediation the proceedings be listed for a further directions hearing on 14 November 2014 at the Federal Circuit Court of Australia at Melbourne commencing at 10.00 am.”
The directions hearing listed on 14 November 2014 was subsequently vacated and the proceedings to 18 February 2015 so the parties could attend mediation. The mediation was held on 11 December 2014.
The applicant then filed a notice of discontinuance on 2 February 2015. The respondent has since filed an application for costs and seeks that the applicant pay its costs, as it is contended the applicant engaged in conduct that constituted unreasonable acts or omissions that caused it to incur costs. This decision concerns whether the applicant should pay the respondent’s costs.
On 10 February 2015 and by consent the Court made the following orders to deal with the respondent’s application for costs as follows:
“BY CONSENT THE COURT ORDERS THAT:
1.The directions hearing listed on 18 February 2015 be vacated.
2.The Respondent must file and serve all material on which it intends to rely in relation to its application for costs by not later than 4.00 pm on 25 February 2015.
3.The Applicant must file and serve all material on which it intends to rely in relation to the Respondent’s application for costs by not later than 4.00 pm on 18 March 2015.
4.The Respondent’s application for costs will be heard on the papers on a date after 18 March 2015.
5.That no further documents shall be filed in these proceedings, save for as set out above, without leave of the Court.
AND THE COURT NOTES:
A.All documents filed pursuant to orders (2) and (3) herein must be filed in the Registry pursuant to the Federal Circuit Court Rules 2001 (“the Rules”) and a copy must also be emailed in word format to Judge O’Sullivan’s Associate at: associate.judgeo’[email protected]”
The background facts and circumstances and the relevant principles in relation to costs under the Fair Work Act are set out in written submissions filed with the Court by the parties to which I now turn.
Submissions
The respondent filed an application in a case (seeking costs), an affidavit of its solicitor, Tracey Jane Davis and submissions in relation to its application for costs on 25 February 2015. The respondent’s submissions were:
“2.The Respondent seeks costs against the Applicant pursuant to s.570(2)(b) of the Fair Work Act 2009 C’th (the FW Act) in that the Applicant has engaged in conduct that constituted unreasonable acts or omissions that caused the Respondent to incur costs.
Chronology of events
3.The Applicant made an application to the Fair Work Commission pursuant to s.365 and s.372 of the Fair Work Act 2009 on 30 January 2014. The Respondent filed a response to the Applicant’s application on 18 February 2014.
4.The matter was conciliated in conference before Commissioner Ryan of the Fair Work Commission on 20 February 2014. The matter was not resolved The requisite certificate was issued by the Commissioner on 21 February 2014. The Applicant then made application for relief to this Court on 28 March 2014.
5.The Applicant filed his application out of time and was required to make an application for leave to file the application out of the 14 day prescribed time limit.
6.The matter was listed for directions on 12 May 2014.
The Respondent appeared at that hearing by counsel.
The Applicant appeared as a self represented litigant.
The directions hearing was adjourned and orders made for the filing of an application and submissions seeking leave to file the substantive application out of time.
7.On 7 July 2014 Victoria Legal Aid filed a notice of address for service on behalf of the Applicant. Pursuant to directions dated 12 May 2014 the Applicant filed an application in a case and an affidavit in support of his claim together with an outline of submissions. The material filed notes that it was prepared by Victoria Legal Aid.
8.The Respondent filed its submissions, in response to the application of the case filed by the Applicant in accordance with directions, on 23 June 2014.
9.The application in the case by agreement of the parties was determined on the papers by His Honour on 11 July 2014.
10.After the decision of His Honour granting the Applicant leave to file his application out of time the Respondent filed its points of defence on 25 August 2014 in accordance with the prescribed timetable.
11.On 11 December 2014 the matter was mediated before Registrar Burns. The mediation was attended on behalf of the Respondent by the Respondent’s legal representatives, both solicitor and counsel and the Respondent’s Financial Director. The mediation was unsuccessful.
12.The matter was listed for further directions on 18 February 2015. On 28 January 2015 the solicitors for the Applicant wrote to the solicitors for the Respondent seeking consent to discontinue the substantive proceeding.
13.The Respondent consented to the Applicant’s request to discontinue and reserved its right to make this costs application.
…
Unreasonable acts and omissions
Application in a Case – Leave to File Out of Time
17.The Applicant was required, because he did not comply with the provisions of the FW Act to make application for leave to file the substantive application in these proceedings. This application was an additional step in the proceeding that was only necessary because the Applicant had failed to comply with his obligations under the FW Act.
18.The conduct of the Applicant resulted in the adjournment of the directions hearing, which in the usual course would have resulted in the programming of the substantive proceeding and directions being given with respect to the filing of the application in a case.
19.At this time, as indicated in the Chronology section above, the Applicant was a self- represented litigant. It is submitted that the Applicant cannot hide behind the veil of being self-represented. As the Full Court of the Federal Court stated in Bahonko v Sterjov (2008) 166 FCR 415 at [6], being an unrepresented litigant “brings no special privileges and cannot justify lack of proper attention to the interests of other parties”. Since late May 2014 and formally on the record since 7 July 2014 the Applicant has been represented by Victoria Legal Aid.
20.The Respondent, in response to the submissions of the Applicant, made the following submissions, among others, in the following terms:
4.Even though the Respondent has taken a neutral view as to whether the application made should granted, it is accepted that as this is a matter that pertains to the jurisdiction of the Court (to hear the substantive application) and as such the parties cannot by agreement or otherwise confer jurisdiction. The onus is upon the Applicant to establish that the facts and circumstances surrounding his failure to make a general protections application within the time prescribed by the Fair Work Act 2009 (the FW Act) are such that it would be appropriate for the Court to exercising its discretion by making an order permitting the filing of the application within 35 days of the issuing of the Fair Work Commission Certificate of 21 February 2014 (FWC Certificate).
6.The Applicant makes bold assertions as to the substantive merits of the His case in paragraphs 2 to 31 of his submissions. The assertions made in these paragraphs are expressly rejected by the Respondent. Further, a “reverse onus” does not automatically give strength to an applicant’s claim. It is and has always been the position of the Respondent that that the decision to make the Applicant’s position redundant was made for reasons that did not include the Applicant’s family responsibilities or a request for flexible working arrangements.
8.Should the Court find in favour of the Applicant, by extending the time for the making of a general protections court application, the Respondent submits that it is appropriate for the costs of the application be reserved and seeks to be heard on the issue of further directions in the matter.
21.His Honour’s decision granting leave to file the application was silent on the issue of costs.
22.It is submitted that the Applicant’s act or omission, being the failure to complied with the provisions of s.370 of the FW Act incurred the Respondent to incur costs namely:
(a)attendance of the Applicant’s legal representatives the aborted directions hearing on 12 May 2014;
(b)considering, responding to preparation of and filing and serving submissions with respect to the Applicant’s application in a case.
Failure to Discontinue Proceedings Prior to Mediation
23.It is submitted that the Applicant’s failure to withdraw his claim prior to the matter being mediated by a Registrar on 11 December 2014 was a further or additional act or omission that resulted in the Respondent incurring costs being the preparation for and the attendance at the Court ordered mediation.
24. The Respondent has maintained its position in:
(a)its employer response to general protection application in the Fair Work Commission dated 18 February 2014;
(b)Its submission in response to the Applicant’s submission in support of his Application in a Case dated 23 June 2014; and
(c)Its point of Defence dated 25 August 2014;
that it did not dismiss the Applicant for a reason or reasons that included his family responsibilities or his request for flexible working arrangements.
25.There has been no change in the defence of the Respondent since the commencement of proceedings. There were no steps taken in the proceeding by either party between the filing of the points of defence on 25 August 2014 and the mediation on 11 December 2014. There were no steps taken between 12 December 2014 and the Applicant’s request seeking the Respondent’s consent to discontinuance of the proceeding on 28 January 2015.
26.In circumstance where the Respondent has maintained a consistent defence since the initiation of proceedings in the Fair Work Commission and that the matter had been the subject of a conciliation conference before the Fair Work Commission, it is submitted that the Applicant’s decision to proceed to the Court ordered mediation and or his failure to withdraw the proceedings prior to the Court ordered mediation were acts and omissions that caused the respondent to incur costs.
27.It is submitted objectively that the conduct of the Applicant constituted unreasonable acts and omissions in the circumstances of this case[1] and the Court should exercise it discretion to make a costs order in favour of the Respondent pursuant to s.79 of the Federal Circuit Court Act 1999 and Rule 13.02 and or alternatively Rule 21.02 and 21.03 of the Federal Circuit Court Rules 2000.”
[1] Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 392 at [33] and CFMEU v Clarke [2008] 170 FCR 574 at 28 and also see Shea v Energy Australia Services Pty Ltd (No 2) [2015] FCAFC 14.
The applicant filed an affidavit sworn 17 March 2015 and written submissions the same date. In the applicant’s submissions filed on 17 March 2015 it was contended:
“A. Introduction
1.This submission is filed pursuant to the consent orders made by his Honour Judge O’Sullivan on 10 February 2015.
2.It is understood that the Respondent seeks an order for costs pursuant to s 570(2)(b) of the Fair Work Act 2009 (Cth) (FW Act).
3.The Applicant submits that there should be no order as to costs.
4.Pursuant to s 570(2)(b) of the FW Act, the Court may only order the Applicant to pay the Respondent’s costs if:
the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs;
5.As set out in Construction, Forestry, Mining and Energy Union v Clarke, [2] the Court must be satisfied that two criteria have been fulfilled:
[2] (2008) 170 FCR 574 at [28] per Tamberlin, Gyles and Gilmour JJ.
5.1.a party must have engaged in an unreasonable act or omission; and
5.2.the unreasonable act or omission must have caused another party to incur costs in connection with the proceeding.
6.Accordingly, the relevant questions for the court are as follows.
6.1.Did an unreasonable act or omission by the Applicant cause the Respondent to incur costs?
6.2.Should the Court exercise its discretion to make an order for costs under s 570 (2)(b)?
B. No unreasonable act or omission
7.The Respondent contends that the Applicant engaged in conduct that constituted an “unreasonable act or omission” by failing to comply with s 370 of the FW Act and failing to discontinue proceedings prior to mediation.
8.Whether a party has engaged in an unreasonable act or omission depends on an objective analysis of the particular circumstances of the case; see Australian and International Pilots Association v Qantas Airways Ltd (No 3).[3]
[3] [2007] FCA 879 per Tracey J.
9.As outlined in Rentuza v Westside Auto Wholesale,[4]
[4] [2009] FMCA 1022 per Lucev FM.
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.[5]
[5] Ibid at [28] (footnotes omitted).
Seeking an extension of time is not an unreasonable act or omission
10.The Applicant sought an extension of time for the filing of a general protections application under the FW Act. The application was granted by order of Judge O’Sullivan, delivered 11 July 2014.[6] There was no order as to costs.
[6] Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2014] FCCA 1490.
11.The Applicant’s subsequent decision to discontinue the substantive application does not render his earlier application for an extension of time to file improper. To the contrary, the application was granted on Judge O’Sullivan having been satisfied that the Applicant “appears to have a proper basis for making a claim”[7] and, that “it is not possible to say that the (substantive) application is without merit.”[8]
[7] Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2014] FCCA 1490 at [27].
[8] Ibid at [25].
12.Judge O’Sullivan was satisfied that the Applicant’s delay was caused by his inability to navigate the Court’s e-filing system and “was not due to any inaction or fault by the Applicant”.[9]
[9] Ibid at [20]-[21].
13.Judge O’Sullivan held that “[i]t would, in the circumstances, be unfair to deny the applicant who appears to have a proper basis for making a claim a chance to do so because of difficulties that arose in the course of his interactions with the Court’s registry.”[10]
[10] Ibid at [27].
14.The Applicant’s failure to file his substantive application in time does not, in these circumstances, constitute a reason to award costs against him. As held in Johnson v Monti-Haitsma Enterprises Pty Limited (in external administration) (No 2), “there is a clear distinction between an error or oversight and unreasonable conduct.”[11]
[11] [2014] FCA 1020 at [11] per Edmonds J.
15.In these circumstances it cannot be fairly said that for the Applicant to seek an extension of time to pursue his claim amounted to an unreasonable act or omission. The Applicant’s subsequent decision to discontinue his claim does not alter this position. To order otherwise would have the perverse effect of discouraging parties, for fear of an adverse costs order, from ceasing litigation or from pursuing it in the first place, where there appears to be a proper basis to do so.
Proceeding with court ordered mediation is not an unreasonable act or omission
16.The Respondent contends that the Applicant’s decision to proceed with the court ordered mediation, or failure to withdraw his claim prior to the matter being mediated, was an act or omission that resulted in the Respondent incurring costs.
17.There are pragmatic and policy considerations against such a finding in these circumstances.
18.The Applicant’s decision to discontinue the proceeding would, but for this Application, achieve a stated purpose of the Federal Circuit Court’s dispute resolution service, which is to avoid the necessity of a judicial decision:
Dispute resolution refers to procedures and services designed to assist in the resolution of disputes and avert judicial decision. Judges order parties to attend dispute resolution to help them resolve their matter rather than continue with litigation where a judicial decision is required.[12]
[12] Federal Circuit Court of Australia, What is dispute resolution? Accessed at < 17 March 2015.
19.As discussed in the case of Edgen Murray Pte Ltd v Clough Projects International Pty Ltd:
it would rarely be appropriate to treat the costs of a mediation as wasted costs … The prospect of opening up an inquiry as to the utility or relevance of what has passed between the parties in wholly without prejudice and confidential circumstances (is) conceptually inconsistent with the nature of the mediation process.[13]
[13] [2009] WASC 402 at [24] per Kenneth Martin J.
20.At no point did the Respondent make a written offer to the Applicant to settle the matter, even on the basis that the parties bear their own costs. The Applicant should not be penalised for attending a court ordered mediation in good faith in an effort to resolve his complaint, or for subsequently seeking to discontinue it.
21.The Applicant’s decision to discontinue the proceeding following the mediation was difficult and made in an effort to minimise the strain of litigation on his mental health and wellbeing.
22.The Applicant conveyed his intention to discontinue the proceeding to the Respondent 21 days prior to the scheduled directions hearing and sought consent to do so. In so doing, the Applicant avoided the costs of an appearance at that directions hearing and the further costs involved in proceeding to hearing.
23.The Respondent’s contention suggests that applicants must take either an all or nothing approach to litigation. This construction does not allow for applicants being persuaded during the course of litigation that their position may not be as strong as they originally thought or that their interests may not be best served by litigation. The perverse outcome of such an approach is that applicants should either doggedly pursue even hopeless claims through to hearing, or not commence even meritorious claims unless they are unflinchingly committed to seeing it through to hearing, irrespective of any change in their personal circumstances.
C. The discretion conferred by section 570 (2) to be exercised cautiously
24.When considering s 824(2) of the Workplace Relations Act 1996 (Cth), which was relevantly analogous to s 570(2) of the FW Act, the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Clarke held that:
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.[14]
25.In the recent decision of Ryan v Primesafe,[15] Mortimer J reiterated the significance of the threshold set by s 570 (2), finding that “the discretion conferred by the confined terms of s 570 (2) should be exercised cautiously, and the case for its exercise should be clear.”[16]
26.Referring to s 570 of the FW Act as an “access to justice provision”, Mortimer J considered the policy underpinning it:
… 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.[17]
27.It is submitted that in light of these considerations the discretion should not be exercised in this case.
D. Conclusion
28.It is submitted that in this case the Applicant did not engage in an unreasonable act or omission that caused the Respondent to incur costs. He pursued a claim in good faith and sought to discontinue it in the interests of minimising the strains of litigation. He did so as soon as it became clear to him that the strain of continuing the proceeding was not worth the potential benefit to him of proceeding further.
29.In the alternative, even if the Court is of the view that the case falls within the ambit of s 570(2)(b), there is still a discretion whether or not to award costs against a party.[18] Given that the Applicant acted in good faith and in a reasonably timely manner so as to avoid the need for ongoing litigation, it is submitted that this would be an appropriate case for the Court to exercise its discretion to refuse to award costs against him.”
[14] (2008) 170 FCR 574 at [29] per Tamberlin, Gyles and Gilmour JJ.
[15] [2015] FCA 8 per Mortimer J.
[16] Ibid at [64], referring to Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] per Bromberg J.
[17] Ryan v Primesafe [2015] FCA 8 at [64] per Mortimer J.
[18] Zhang v The Royal Australian Chemical Institute Inc (No 2) [2004] FCA 1626 at [7] per Finkelstein J.
Relevant provisions
The respondent’s application for costs falls to be determined by reference to the provisions of s.570 of the Fair Work 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 in proceedings under the Fair Work Act. In relation to the provisions in s.570 of the Fair Work Act generally His Honour noted:
“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.”The effect of s.570 is to limit the Court’s power in relation to any order for costs in respect of proceedings under the Fair Work 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. It is the last mentioned ground that the respondent in this case contends warrants an order for costs here.
Consideration
Firstly it is timely to recall that the applicant has filed a notice of discontinuance. In Hobson v BWL Pty Ltd & Ors (No.3) [2012] FMCA 439, Lucev FM (as His Honour was) considered the issue of costs where proceedings under the Fair Work Act had been discontinued and found there was no barrier to the Court dealing with such an application notwithstanding the substantive application had been discontinued. Accordingly I will proceed on that basis.
Secondly, whilst pursuant to s.570(2)(b) of the Fair Work 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 and only if the Court is satisfied that is the case.
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 26 to 28 in Rentuza His Honour said:
“26.For the purposes of s.570(2)(b) two criteria must be fulfilled. 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 proceeding.
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]
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.”
Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case (see Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879).
In Hobson v BWL Pty Ltd & Ors (No.5) [2013] FCCA 2145 His Honour noted the application for costs in that case (based as it was on s.570(2)(b)) appeared misconceived. At paragraph 46 His Honour said:
“46.The respondents also appear to contend that because Ms Hobson persisted with her claim but then discontinued it shortly prior to trial costs should be awarded against her. There is no general rule in the FCC Rules or authority for that proposition in the context of a FW Act claim. Costs should only be ordered if the conduct of the party caused the respondents additional costs, in all the circumstances, applying the criteria set out in s.570 of the FW Act.”
There is authority for the proposition that inefficiency in conducting a case or late abandonment of claims does not necessarily contribute an “unreasonable act”.[19] In this case the respondent maintains the applicant’s unreasonable acts or omissions were:
a)failing to file his initiating application within time thereby causing it to incur costs; and/or
b)pursuing his claim (after time had been extended by the Court to file it) in the face of the respondent’s unchanged position up to and after an unsuccessful mediation only to subsequently discontinue the claim which also caused it to incur costs.
[19] Clarke (2008) 170 FCR 574 at [28]
In relation to the first of the acts or omissions referred to above I take into account the parties submissions and note the applicant’s status at the time the substantive application was filed as an unrepresented litigant. In the circumstances having regard to the reasons in Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2014] FCCA 1490 and the approach to costs under the Fair Work Act set out above, I don’t consider that was an unreasonable act or omission on the applicant’s part that caused the respondent to incur costs.
It wasn’t until the Court (was required to exercise its discretion and) had determined to extend time that the respondent was required to file a response and the matter proceeded to mediation.
Turning then to the second of the acts or omissions referred to above. In Clarke the Full Court stated (at [29]):
“As the authorities indicate, there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in these sense of being incompetent or unsupported.”
As was noted in Rentuza (supra) the exercise of the discretion of s.570(2) is not necessarily engaged just because:
(a)a party does not conduct litigation efficiently;[20]
(b)a concession is made late;[21]
(c)a party may have acted in a different or timelier fashion;[22] and
(d)a party has adopted a genuine but misguided approach.[23]
[20] see Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ
[21] see Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ
[22] see Clarke FCR at 582-583 per Tamberlin, Gyles and Gilmour JJ
[23] see for example, the approach in Australian and International Pilots Association v Qantas AirwaysLtd (No.3) [2007] FCA 879 at para 39 per Tracey J
In Clarke, their Honours considered that although the abandonment was late, it was “properly made and beneficial to the appellants” (at [29]). This was so even though further costs may have been incurred. Their Honours further held that:
“The mere fact that it could have done so in a different or timelier fashion is not sufficient, in itself, to warrant the making of an adverse costs order against it, particularly where the usual practice in litigation arising from the WR Act is to make no orders as to costs.”
I note the parties submissions on the second of the alleged acts or omissions. In my view this case is analogous to the circumstances referred to in Clarke. In those circumstances it would be inappropriate to order costs.
Conclusion
Accordingly, for the reasons set out above there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Associate: Rachelle Lombardo
Date: 20 March 2015
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