Hobson v BWL Pty Ltd and Ors (No.5)
[2013] FCCA 2145
•20 December 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HOBSON v BWL PTY LTD & ORS (No.5) | [2013] FCCA 2145 |
| Catchwords: COSTS – Where proceedings under the Fair Work Act 2009 (Cth) discontinued – whether party’s unreasonable act or omission caused other party to incur costs. |
| Legislation: Fair Work Act 2009 (Cth), ss.70, 340, 352 570 |
| Australian and International Pilots Association v Qantas Airways Ltd (No.3) (2007) 162 FCR 392; [2007] FCA 879 Sappideen & Ors, Macken’s Law of Employment (6th Edition) (Pyrmont: Law Book Co, 2009) | ||
| Applicant: | NINA HOBSON | |
| First Respondent: | BWL PTY LTD TRADING AS INVISION INVESTIGATIONS, CONSULTING AND TRAINING SOLUTIONS |
| Second Respondent: | JANE ELIZABETH WYLLIE |
| Third Respondent: | REINHARD ANTON LANGMAIR |
| File Number: | PEG 69 of 2010 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 9 May 2013 |
| Date of Last Submission: | 9 May 2013 |
| Delivered at: | Perth |
| Delivered on: | 20 December 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr S Ellis |
| Solicitors for the Applicant: | Tottle Partners |
| Counsel for the Respondents: | Mr A P Hershowitz |
| Solicitors for the Respondents: | CS Legal |
ORDERS
That the respondents’ application under s.570(2)(b) of the Fair Work Act 2009 (Cth) for the costs of the proceedings be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 69 of 2010
| NINA HOBSON |
Applicant
And
| BWL PTY LTD TRADING AS INVISION INVESTIGATIONS, CONSULTING AND TRAINING SOLUTIONS |
First Respondent
| JANE ELIZABETH WYLLIE |
Second Respondent
| REINHARD ANTON LANGMAIR |
Third Respondent
REASONS FOR JUDGMENT
Introduction and background
The respondents, BWL Pty Ltd Trading As INVision Investigations, Consulting and Training Solutions,[1] Jane Elizabeth Wyllie,[2] and Reinhard Anton Langmair,[3] have applied under s.570(2) of the Fair Work Act 2009 (Cth)[4] for the costs of the proceedings. At hearing, Counsel for the respondents advised, consistent with the submissions filed by the respondents, that costs were now only sought on the basis that the applicant, Nina Hobson,[5] had caused the respondents to incur costs by her unreasonable acts or omissions.[6]
[1] “INVision Investigations”.
[2] “Ms Wyllie”.
[3] “Mr Langmair”.
[4] “FW Act”.
[5] “Ms Hobson”.
[6] FW Act, s.570(2)(b); Transcript, 9 May 2013, page 6.
Much of the background to the present proceedings was set out in the judgment in Hobson v BWL Pty Ltd Trading As INVision Investigations, Consulting and Training Solutions & Ors (No. 4)[7] in the following terms:
[7] [2013] FMCA 20 (“Hobson (No. 4)”).
1. The applicant, Nina Hobson, was formerly employed by the first respondent, BWL Pty Ltd trading as INVision Investigations, Consultants and Training Solutions under a “Fixed Term Contract of Employment” which was entered into on or about 3 February 2010.
2. Ms Hobson’s employment with INVision Investigations was terminated effective 1 March 2010.
3. Ms Hobson commenced proceedings under the Fair Work Act 2009 (Cth) seeking declarations for alleged contraventions of s.340 of the FW Act, the imposition of a pecuniary penalty and an award of compensation, and damages for an alleged breach of contract. The respondents have denied Ms Hobson’s claims. The respondents included a claim for costs in their response, relying on s.570(2) of the FW Act.
4. The primary basis for the application was said to be that shortly before Ms Hobson was dismissed she suffered from anxiety and depression and was absent from work as a consequence of bullying and intimidation by the third respondent, Reinhard Anton Langmair, a director of the first respondent.
5. On 9 February 2011, and on the application by the respondents, the Court issued two subpoenas ordering the Australian and New Zealand Banking Group Ltd and Gemini Medical Services, to produce documents by 25 February 2011. Gemini Medical Services is the medical centre where Ms Hobson’s GP is employed. The ANZ is the bank that holds the mortgage over Ms Hobson and her husband’s property at 25 Darley Circle, Bull Creek, Western Australia. The documents subpoenaed were produced to the Court.
6. At the time of the issue of the Subpoenas the application had been set down for hearing from 14-16 March 2011. On 22 February 2011 Ms Hobson filed a Notice of Discontinuance, which discontinued all of her claims in these proceedings.
7. Following the filing of the Notice of Discontinuance the respondents requested to inspect documents produced in compliance with the Subpoenas in relation to the respondents’ costs application.
8. Objections to the inspection of documents produced pursuant to the Subpoenas were lodged by Ms Hobson on 24 February 2011.
9. The Court delivered its Reasons for Judgment concerning the issue of whether the respondents could inspect documents produced under the Subpoenas issued at the respondents request prior to the filing of a Notice of Discontinuance, in circumstances where inspection of the documents is sought to support their argument as to costs. In Hobson (No. 3) the Court held that it had the express power to permit the respondents to inspect the subpoenaed documents notwithstanding the filing of the Notice of Discontinuance by Ms Hobson. It was further held that before the subpoenaed documents could be inspected, the Court must deal with the Objections.[8]
[8] Hobson (No. 4) at paras.1-9 per Lucev FM (footnotes omitted). The reference to “Hobson (No. 3)” is a reference to (2012) 263 FLR 76; [2012] FMCA 439 (“Hobson (No. 3)”).
In Hobson (No. 4) the applicant objected to the inspection of documents produced under subpoena. The Court granted the respondents liberty to inspect the documents produced under the subpoenas within 21 days.[9] The question of costs was listed for hearing.[10]
[9] Hereinafter the documents produced and inspected are referred to as the “Gemini Documents” and “ANZ Documents” respectively.
[10] Hobson (No. 4) at para.45 per Lucev FM.
Application for costs
The respondents now seek an order for costs on the basis that Ms Hobson’s unreasonable acts or omissions caused the respondents to incur costs,[11] and specifically orders that Ms Hobson pay:
a)the respondents’ costs of the application;
b)all the reserved costs;
c)the costs of the application in Hobson (No. 3); and
d)the costs of the application in Hobson (No. 4).
Evidence
[11] Transcript, 9 May 2011, page 6.
Evidence for the respondents
The respondents relied upon the following affidavit material:
a)affidavit of Ms Hobson sworn 15 October 2010;[12]
b)affidavit of Ms Hobson sworn 19 November 2010;[13]
c)affidavit of Amanda Nella sworn 7 December 2010;[14]
d)affidavit of Mr Langmair sworn 24 January 2011;[15]
e)affidavit of Ms Wyllie sworn 7 February 2011;[16]
f)affidavit of Fraser Alexander Robertson sworn 9 April 2013;[17] and
g)affidavit of Fraser Alexander Robertson sworn 18 April 2013.[18]
[12] “Ms Hobson’s October 2010 Affidavit”.
[13] “Ms Hobson’s November 2010 Affidavit”.
[14] “Ms Nella’s December 2010 Affidavit”.
[15] “Mr Langmair’s Affidavit”.
[16] “Ms Wyllie’s Affidavit”.
[17] “Mr Robertson’s 9 April 2013 Affidavit”.
[18] “Mr Robertson’s 18 April 2013 Affidavit”.
Ms Hobson’s October 2010 Affidavit and November 2010 Affidavit were deposed to in support of the application and interlocutory relief in the application, and Ms Nella’s December 2010 Affidavit was deposed in support of Ms Hobson’s application.
Mr Langmair’s Affidavit and Ms Wyllie’s Affidavit were deposed to in opposition to Ms Hobson’s application.
Mr Robertson’s 9 April 2013 Affidavit evidences the Gemini Documents and ANZ Documents.
Evidence for Ms Hobson
Ms Hobson relied on the following affidavits:
a)her affidavit sworn 13 August 2010;[19]
b)Ms Hobson’s October 2010 Affidavit;
c)Ms Hobson’s November 2010 Affidavit;
d)her affidavit sworn 11 February 2011;[20]
e)her affidavit sworn 3 May 2013;[21]
f)Ms Nella’s December 2010 Affidavit;
g)affidavit of Amanda Nella sworn 17 February 2011;[22] and
h)affidavit of Dr Raymond Wu sworn 8 November 2010.[23]
Submissions
[19] “Ms Hobson’s August 2010 Affidavit”.
[20] “Ms Hobson’s February 2011 Affidavit”.
[21] “Ms Hobson’s May 2013 Affidavit”.
[22] “Ms Nella’s February 2011 Affidavit”.
[23] “Dr Wu’s Affidavit”.
Respondents’ submissions
At the relevant time[24] s.570 of the FW Act provided as follows:
[24] Section 570(1) of the FW Act was amended by Part 1 of Schedule 10 of the Fair Work Amendment Act 2012 (Cth) (“FW Amendment Act”) which was effective from 1 January 2013. The amendments, however, only apply to proceedings commenced after the commencement of the FW Amendment Act.
(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) ….
Section 570 of the FW Act “carves out another exception to the usual rule” that costs are not awarded in workplace relations proceedings, and enacts a basis on which costs may be awarded in FW Act proceedings, by setting out the criteria on which costs may be awarded.[25] Where the criteria are met and costs are able to be awarded under the FW Act, the actual award of costs is in the discretion of the Court.[26]
[25] Construction, Forestry, Mining and Energy Union & Ors v Clarke (2008) 170 FCR 574 at 582 per Tamberlin, Gyles and Gilmour JJ; [2008] FCAFC 143 at para.28 per Tamberlin, Gyles and Gilmour JJ (“Clarke”).
[26] FCCA Act, s.79(3).
The general principles to be distilled from the authorities are as follows:
a)from early in its history this Court has made costs orders in proceedings where an application has been discontinued;[27]
b)although there is no presumption that a discontinuing party is liable to pay the other party’s costs, ordinarily costs would follow the event of such a discontinuance, if in all of the circumstances, it was reasonable to make such an order;[28] and
c)in Poole v Rod Baker & Co[29] the Court ordered costs to be paid after the applicant sought to discontinue on the day of the hearing when faced with difficulties, and ordered those costs to be paid by the applicant’s lawyer personally on the basis the lawyer had acted unreasonably and caused the respondent to incur costs notwithstanding notice had been given some time previously of jurisdictional difficulties with the application.
[27] NAGY v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FMCA 189.
[28] Ingui v Ostara & Anor (No. 2) [2003] FMCA 132 at paras.31-32 per Brown FM.
[29] (2011) 207 IR 264; [2011] FMCA 357.
In Hobson (No.3) the Court held that there is nothing to prevent the Court from exercising discretion to deal with an application for costs in relation to an application which has been discontinued, especially where:
a)the Response contains a counter-claim for costs under s.570 of the FW Act; and
b)an oral application for costs of proceedings was made within the relevant time limit of 28 days after discontinuance in accordance with r.13.02(2) of the FCC Rules.
The exercise of the discretion is subject to the criteria for the award of costs set out in s.570 of the FW Act.[30]
[30] Hobson (No. 3) FLR at 94 per Lucev FM; FMCA at para.58 per Lucev FM.
Whether a party has engaged in “an unreasonable act or omission” depends on the particular circumstances of the case,[31] and extends to unreasonable acts or omissions in connection with interlocutory applications.[32] The respondents have the onus in the application for costs under s.570 of the FW Act.[33]
[31] Australian and International Pilots Association v Qantas Airways Ltd (No. 3) (2007) 162 FCR 392; [2007] FCA 879 (“Qantas Airways (No. 3)”).
[32] Paras v Public Service Body Head of the Department of Infrastructure & Anor (No. 3) (2006) 152 FCR 534 at 538 per Young J; [2006] FCA 745 at para.16 per Young J.
[33] Howard v Cummins (1988) 27 IR 109 at 111-112 per Keely J.
In the substantive proceedings Ms Hobson asserted that:
a)she suffered an illness , namely anxiety and depression;
b)she took paid sick leave thereby exercising a workplace right;
c)she informed INVision Investigations that Mr Langmair had bullied and intimidated her;
d)INVision Investigations dismissed her in breach of s.340 of the FW Act and Ms Wyllie and Mr Langmair were knowingly involved in that contravention; and
e)in the alternative, INVision Investigations dismissed her in breach of s.352 of the FW Act because she was temporarily absent from work.
One of the issues arising in the application was whether Ms Hobson undertook any other work and was employed by a film production company, B2B Film Productions,[34] around the time of her dismissal. Ms Hobson gave affidavit evidence that:
a)“Since about May, I have been doing some unpaid work with Amanda Nella at B2B Film Productions”;[35]
b)“My association with B2B …was informal, undocumented and unpaid. I have no documents relating to my work for B2B and received no income from it during the period 1 March 2010 to June 2010”;[36] and
c)“that I was employed only on an informal, undocumented and unpaid basis by B2B during the period 1 March 2010 to 3 June 2010 and I received no income from B2B during the period 1 March 2010 to 3 June 2010.”[37]
[34] “B2B”.
[35] Ms Hobson’s November 2010 Affidavit, para.117.
[36] Ms Hobson’s October 2010 Affidavit, para.4.
[37] Ms Hobson’s October 2010 Affidavit, para.6.
The documents obtained under subpoena establish that:
a)Ms Hobson’s association with B2B was formal and documented;[38]
[38] Mr Robertson’s 9 April 2013 Affidavit, Annexur FAR 2.
b)Ms Hobson was appointed as a director and secretary of B2B on 13 August 2010;
c)contrary to the sworn evidence of Ms Hobson that she received “no income from B2B during the period 1 March 2010 to 3 June 2010”, following Ms Hobson’s termination by INVision Investigations effective 1 March 2010 she was paid a salary and received other benefits from B2B on 4, 5 and 18 April 2010;[39]
d)contrary to Ms Hobson’s evidence that her association with B2B was informal and undocumented:
i)she sent an email dated 30 March 2010[40] to a third person enclosing an email from “Nina’s employer”, which email was from B2B and stated that Ms Hobson had commenced full time employment with B2B and was to receive $95,000 per annum;[41] and
ii)that the 30 March 2010 Email was sent for the apparent purpose of procuring a loan to assist Mr and Ms Hobson’s then pending purchase of a residential property;
e)by 22 March 2010 Ms Hobson had negotiated a contract with B2B and had signed such a contract with B2B;
f)Ms Hobson had undertaken work for B2B prior to 1 March 2010 and in the last week of March 2010; and
g)Ms Hobson’s statement to her GP at the beginning of May that she wanted to return to work, but she had not been able to do so and since about May she had been “doing some unpaid work with Amanda Nella at B2B”[42] is demonstrably false, having regard to the subpoenaed documents.
[39] Mr Robertson’s 9 April 2013 Affidavit, Annexure FAR 2.
[40] “30 March 2010 Email”.
[41] Mr Robertson’s 9 April 2013 Affidavit, Annexure FAR 2.
[42] Ms Hobson’s November 2010 Affidavit Hobson, paras.116-117.
Ms Hobson’s own affidavit evidence says that she undertook some work for B2B prior to 1 March 2010, while she was still employed by INVision Investigations.[43]
[43] Ms Hobson’s October 2010 Affidavit, para.3(e)(ii)(2).
If Ms Hobson was off work because of illness including anxiety and depression one might ask how ill she really was when at or around the same time she was negotiating with B2B, formalised a contract with them and undertook work for them. Ms Hobson said under oath that on Tuesday 9 March she saw her GP who confirmed “I was still too sick to be able to work.”[44]
[44] Ms Hobson’s November 2010 Affidavit, para.107.
On the available evidence, the inference to be drawn is that the work carried out by Ms Hobson at B2B prior to 1 March 2010 may well have been carried out during the time she was off from work from INVision Investigations as a consequence of alleged intimidation and bullying and resultant stress and anxiety.
In addition to the above, the respondents contend that Ms Hobson’s allegations of being stressed as a result of asserted bullying by Mr Langmair, and that she had a restricted work capacity and was unable to work, are to be considered in the light of Ms Hobson’s:
a)appointment on 6 January 2011 as a director and secretary of B2B Community Initiatives Pty Ltd, B2B Consultancy Services Pty Ltd, B2B Global Solutions Pty Ltd, B2B Investigative Services Pty Ltd, and B2B Training Pty Ltd;
b)resignation as a director and secretary from all but one of the B2B companies between 3 and 24 March 2011; and
c)appointment as a director and secretary, or director, of Space Safe KidzPty Ltd, National Investigation Services of Australia Pty Ltd, Poshpom Pty Ltd, Chameleon Initiatives Australia (“CIA”) Pty Ltd, and Name and Shame Australia Pty Ltd between 29 March 2011 and 5 February 2013.[45]
[45] Mr Robertson’s 18 April 2013 Affidavit.
Central to Ms Hobson’s application is her assertion that she was bullied by INVision Investigations and was temporarily off work as a consequence.
Annexure 34 to the Ms Hobson’s November 2010 Affidavit attaches a medical report of Dr Wu, Consulting Psychiatrist, who reviewed Ms Hobson on 6 May 2010.[46] He obtained a history of the presenting complaint and asked Ms Hobson questions about her past psychiatric history. That history provided by Ms Hobson and recorded by Dr Wu is at odds with the affidavit evidence of Ms Hobson and fails to record significant relevant events concerning her mental wellbeing and past history as well as her ability to work. This medical evidence was tendered by Ms Hobson in support of her claim. The Gemini Documents establish that:
[46] “Dr Wu’s Report”.
a)Ms Hobson attended on Dr V Tandon:
i)on 30 April 2009 who recorded that “needs cwc. stressed at work. Says-bullied”; and
ii)on 1 January 2010 where “stress and bullying” is recorded;[47]
which is in direct contradiction with other evidence deposed to by Ms Hobson;
b)Ms Hobson advised her GP:
i)“going to Court against old employer, and being supported by old employers lawyer”;
ii)she was trying to find another job and that “ ...she wants to come off workers comp soon - if not successful going back to TV...needs final workers comp certificate...”; and
c)on 22 February 2010 she advised that her boss was bullying her into a full time contract,[48] whereas her affidavit evidence is to the effect that she was very keen to secure a full time contract with INVision Investigations and was anxious to conclude that.
[47] Mr Robertson’s 9 April 2013 Affidavit, Annexure FAR 1.
[48] Mr Robertson’s 9 April 2013 Affidavit, Annexure FAR 1.
The respondents contend that it is precisely the kind of evidence which has now been obtained under the subpoenas that Ms Hobson did not wish to be questioned about that lead ultimately to the filing of the Notice of Discontinuance. The recently obtained evidence differs in material respects from her sworn affidavit evidence, and in fact strongly suggests that she has not been truthful and has not made full disclosure of material facts in her affidavits.
If Ms Hobson had nothing to hide, why would she have first opposed the application to inspect the documents under subpoena and then persisted with her objections to the documents under subpoena at significant cost when she had already discontinued the proceedings?
It is this conduct, namely, having been caught out in her affidavit evidence in support of the application of being untruthful, and of gilding the lily, that brings the Ms Hobson’s conduct within s.570(2)(b) of the FW Act.
The unreasonable acts and omissions of Ms Hobson include:
a)not disclosing to the Court a previous incident of workplace stress caused by bullying a year prior in April 2009;
b)not disclosing the previous incident of workplace stress to her Consultant Psychiatrist, who prepared a report to support her application;
c)running a case of inability to work as a consequence of stress and anxiety and an inability to work as a consequence of bullying in circumstances where Ms Hobson had at or around the relevant time obtained other full time employment and had been a director of B2B and other companies;
d)a failure to disclose to the Court that she secured a full time position under a written contract of employment with B2B dated 22 March 2010 and a failure to disclose her directorship at B2B and other companies;
e)a failure to disclose to the her GP and her Consultant Psychiatrist that she secured a full time position under a written contract of employment with B2B dated 22 March 2010 while stating at the same time that she was unable to work;
f)being untruthful about her work with B2B and about not earning any income from B2B for the period 1 March 2010 to 3 June 2010;
g)claiming compensation and damages in circumstances where she had secured a permanent contract of employment with B2B which she failed to mention, had carried out other work at or around the relevant time for which she was paid and which she failed to mention, and became a director of various companies in the months leading up to the trial and the Notice of Discontinuance; and
h)persisting with the application in the knowledge that she had acted in the manner set out above and then filing a Notice of Discontinuance shortly before the hearing dates.
Applicant’s submissions
Section 570 of the FW Act provides the starting point for considering costs applications in fair work matters, including in this Court. The starting point is that the Court, when dealing with FW Act matters, is a ‘no-costs’ jurisdiction, except in special circumstances.[49]
[49] Brown v Batten (No. 2) [2012] FMCA 436 at para 3 per Raphael FM (“Brown (No. 2)”).
The predecessor to s.570 of the FW Act was s.824 of the Workplace Relations Act 1996 (Cth).[50] The similarity in both intent and wording between s.570 of the FW Act and s.824 of the WR Act means that cases interpreting the latter are relevant to the interpretation of the former. There should be no distinction between Ms Hobson’s claim made under the FW Act and that made at common law. The Court is exercising jurisdiction under s.570 of the FW Act which applies to the proceedings as a whole, not just that part of the proceedings which are based on the FW Act. The Federal Court in McDonald v Parnell Laboratories (Aust) (No.2) stated:[51]
[c]onsideration of all the claims, statutory and common law, required reference to the same substratum of facts. Accordingly, in my view, all the claims, federal and non-federal, should be regarded as arising in the one matter. Prior to the date of abandonment of the claims under the WR Act it was not possible to distinguish proceedings relating to the WR Act claims from proceedings concerning the others. For the reasons given by Nicholson J in Geraldton Port Authority it follows that s 824 of the WR Act was, prima facie, engaged with respect to the whole of the proceedings.[52]
[50] “WR Act”.
[51] (2007) 164 FCR 591; [2007] FCA 2086 (“McDonald (No. 2)”).
[52] McDonald (No. 2) FCR at 598 per Buchanan J; FCA at para.27 per Buchanan J.
To succeed in their application under s.570(2)(b) of the FW Act the respondents must show that Ms Hobson’s unreasonable acts or omissions caused the respondents to incur costs.
Ms Hobson’s original Form 2 claim was dated 11 May 2010. It concerned two disputes:
a)a contract dispute in which Ms Hobson alleged a breach of her fixed term employment contract entered into on 3 February 2010; and
b)a general protections dispute regarding workplace rights and temporary absence due to illness or injury, as set out in Annexure “A” to her claim.
There was not, as the respondents assert in the respondents’ submissions, a “primary basis” for Ms Hobson’s claim. Her claim was based equally on breach of contract at common law and on contravention of the FW Act. Ms Hobson amended her claim by Form 2 dated 28 July 2010, to add additional particulars of acts by the respondents subsequent to the termination of her employment. Her claim otherwise remained the same.
The prosecution of any incompetent or hopeless case can be regarded as “an unreasonable act” within the meaning of s.824(2) of the WR Act (now in s.570(2)(b) of the FW Act). Conversely, the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act.[53]
[53] Qantas Airways (No. 3) FCR at 402-403 per Tracey J; FCA at para.36 per Tracey J.
In Rentuza v Westside Auto Wholesale[54] the Federal Magistrates Court said:
[54] (2009) 190 IR 207; [2009] FMCA 1022 (“Rentuza”).
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 effectively;
(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 or misguided approach.[55]
[55] Rentuza IR at 213 per Lucev FM; FMCA at paras.27-28 per Lucev FM (footnotes omitted).
In Construction, Forestry Mining and Energy Union & Ors v Clarke[56] the Full Court of the Federal Court said:
In our view, the respondent has not engaged in “an unreasonable act or omission”. 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 the sense of being incompetent or unsupportable: Australian and International Pilots Association 162 FCR at 402; Standish v University of Tasmania (1989) 28 IR 129 at 138-139. Simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion in s 824(2) of the WR Act to make a costs order. In our view, neither the late abandonment of some of its defence, nor the use of a notice of contention to advance a previously minor and ultimately unsuccessful argument, crosses the threshold of being “an unreasonable act or omission” for the purposes of s 824(2). True it is that the concession ultimately given by the respondent that it regarded the decision of Nicholson J as erroneous could have been given earlier. However, it was a concession which was, in light of the decision of this Court on the substantive appeal, properly made and beneficial to the appellants. Although it is arguable that the lateness of the concession may have put the appellants to some extra costs, we are of the view that it cannot be characterised as “unreasonable” in the circumstances of this case. Indeed, while courts should use the discretion in s 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 the 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.[57]
[56] (2008) 170 FCR 574; [2008] FCAFC 143 (“Clarke”).
[57] Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ; FCAFC at para.29 per Tamberlin, Gyles and Gilmour JJ.
That view was endorsed in Saxena v PPF Asset Management Ltd,[58] and Brown (No. 2).[59] Therefore, the making of an application (including an interlocutory application) that is ultimately unsuccessful, or opposing an application that is ultimately successful, will generally not been seen as unreasonable where the determination of that application turned upon contested facts or questions of law.[60]
[58] [2011] FCA 395 at para.5 per Bromberg J.
[59] Brown (No. 2) at para.4 per Raphael FM.
[60] See Qantas Airways (No. 3).
These proceedings were discontinued before a final hearing of the merits of Ms Hobson’s claim.
The general rule in the Federal Circuit Court Rules 2001 (Cth)[61] that costs follow the event is displaced by s.570 of the FW Act. As the respondents accept in their submissions filed in support of their application for costs, s.570 is an “exception to the usual rule”.[62] Similarly, although r.13.02(1) of the FCC Rules provides that where a party discontinues an action the other party may apply for costs, that rule is also affected by s.570 of the FW Act. Regardless, there is no general rule in the FCC Rules that costs follow the event of a discontinuance. Costs are only ordered against the discontinuing party if that is reasonable in all the circumstances, and the criteria set out in s.570 of the FW Act must be applied.
[61] “FCC Rules”.
[62] Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ; FCAFC at para.28 per Tamberlin, Gyles and Gilmour JJ.
The fact that Ms Hobson discontinued her claim does not change the assessment that the Court is required to make in this application, namely, whether its discretion under s.570(2) of the FW Act is enlivened. The Court’s task in making that assessment is, however, potentially made more difficult by the fact that there has been no trial of the action, and no assessment of the merits of the claim.
In Australian Securities Commission v Aust-Home Investments Limited & Ors[63] the Federal Court said:
It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford supra. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.[64]
[63] (1993) 44 FCR 194; (1993) 116 ALR 523 (“Aust-Home”).
[64] Aust-Home FCR at 201 per Hill J; ALR at 530-531 per Hill J.
The Court must make an assessment of Ms Hobson’s conduct in commencing and continuing these proceedings on the material available to the Court, without attempting to predict the outcome had there been a trial. In particular, the Court should not attempt to resolve matters of credit between witnesses.
In relation to Ms Hobson’s:
a)alleged work and employment by B2B around the time of her dismissal, Ms Hobson submitted that:
i)she never denied undertaking work for B2B prior to termination of her employment by INVision Investigations;[65]
[65] Ms Hobson’s November 2010 Affidavit, paras.7-18; Ms Hobson’s February 2011 Affidavit, para.8; Ms Nella’s December 2010 Affidavit, paras.24-50.
ii)she was not working for, nor employed by, B2B during the time she was sick and unfit for work between 22 February 2010 and 5 March 2010;[66] and there is no evidence whatsoever that she worked during this period;
[66] Ms Hobson’s November 2010 Affidavit, paras.35-108; Ms Hobson’s May 2013 Affidavit, paras.12-20.
iii)her evidence is consistent with:
A. that of Ms Nella in Ms Nella’s December 2010 Affidavit;
B. the medical certificates discovered by Ms Hobson;[67] and
[67] See Annexure 35 to Ms Hobson’s November 2010 Affidavit.
C. the medical records of Dr Epi Zaman in the Gemini Documents;[68] and
[68] Attachment “FAR1” to Mr Robertson’s 9 April 2013 Affidavit.
iv)her employment contract with B2B is dated 22 March 2010,[69] which is after her employment with INVision Investigations was terminated;[70]
[69] “B2B Contract”.
[70] A copy of the B2B Contract is Attachment “ECW1” to the affidavit sworn by Elaine Wambeck on 31 March 2011 (“Ms Wambeck’s Affidavit”).
b)alleged “formal and documented” association with, and employment by, B2B, Ms Hobson submitted that:
i)she gave evidence regarding the circumstances of the creation, signing and termination of the B2B Contract and why she did not discover it in June or October 2010;[71]
[71] Ms Hobson’s May 2013 Affidavit, paras.25-30 and 45-49.
ii)the signing of the B2B Contract on 22 March 2010 is consistent with the references to her being an employee of B2B in the emails sent by Amanda Nella and Ms Hobson’s husband on 29 and 30 March 2010 respectively;[72]
[72] Mr Robertson’s 9 April 2013 Affidavit, page 23.
iii)Ms Nella gave evidence that Ms Hobson’s ad hoc work for B2B between March and 3 June 2010 was informal and unpaid,[73] which evidence was consistent with Ms Hobson’s mistaken recollection in December 2010 of her association with B2B;
[73] Ms Nella’s December 2010 Affidavit.
iv)the relationship between her and Amanda Nella broke down in March 2011, and Ms Nella then provided to the respondents’ lawyers a copy of the B2B Contract;
v)she did not fail to discover a document which was in her possession, custody or control as she did not have a copy of the B2B Contract between the commencement of the proceedings and receiving a copy of Ms Wambeck’s Affidavit;[74] and
[74] Ms Hobson’s May 2013 Affidavit, para.49.
vi)she did not lie in her earlier statements regarding the B2B Contract, and it was only upon receiving a copy of Ms Wambeck’s Affidavit that she remembered signing the B2B Contract.[75] For that reason, she did not request a copy of the B2B Contract from the ANZ Bank or from Ms Nella before giving discovery in 2010;
[75] Ms Hobson’s May 2013 Affidavit, paras.47, 49 and 53.
c)appointment as officer of B2B on 13 August 2010 Ms Hobson submitted that:
i)it is irrelevant to her claim for damages or compensation for loss of earnings for the period March to June 2010; and
ii)regardless, she has never alleged that she was completely unfit for work by August 2010.[76] Ms Hobson gives further evidence regarding this;[77]
[76] Ms Hobson’s November 2010 Affidavit, paras.116-120.
[77] Ms Hobson’s May 2013 Affidavit, paras.50-53.
d)alleged receipt of income from B2B during the period 1 March 2010 to 3 June 2010 Ms Hobson submits that:
i)she has always admitted that B2B paid her $2,744 in April 2010 for work she did for B2B prior to the termination of her employment by INVision Investigations, and she discovered her bank records of that payment;[78]
[78] Ms Hobson October 2010 Affidavit, paras.3(e)(ii)(2) and 6(d).
ii)she has consistently given evidence that she otherwise received no payment by B2B for the ad hoc work she did for B2B up to 3 June 2010;
iii)her evidence is also consistent with that of Ms Nella;[79]
[79] Ms Nella’s December 2010 Affidavit, para.54.
iv)the fact that in March 2011 Ms Nella produced two additional pay slips (which were also produced by the ANZ Bank under subpoena), is not evidence of Ms Hobson receiving additional payment from B2B, and she did not receive additional payment. Ms Hobson gives further evidence regarding these matters, including the third payslip;[80] and
[80] Ms Hobson’s May 2013 Affidavit, paras.30-44.
v)she explained that she might have had an additional payslip but she could not locate it.[81] Ms Hobson gave further evidence regarding these matters, including the third payslip;[82]
[81] Ms Hobson’s October 2010 Affidavit, para.3(e)(ii)(2).
[82] Ms Hobson’s May 2013 Affidavit, paras.30-44.
e)alleged health and fitness for work immediately before termination of her employment Ms Hobson repeats paragraph 43(a) above;
f)alleged health and fitness for work after termination of her employment Ms Hobson submits that:
i)she has given extensive evidence regarding her sickness and fitness for work from March to June 2010;[83]
[83] Ms Hobson’s August 2010 Affidavit, Ms Hobson’s October 2010 Affidavit, Ms Hobson’s November 2010 Affidavit, Ms Hobson’s February 2011 Affidavit and Ms Hobson’s May 2013 Affidavit.
ii)her evidence is consistent with:
A. that of Ms Nella;[84]
[84] Ms Nella’s December 2010 Affidavit.
B. the medical certificates she has discovered;[85]
[85] Copies of which are annexed to Ms Hobson’s November 2010 Affidavit, Annexure 35.
C. the medical records of Drs Epi Zaman and Anisur Rahman contained in the Gemini Documents; and
D. the evidence of Dr Raymond Wu contained in Dr Wu’s Affidavit; and
iii)she made a workers compensation claim, but did not receive any payments;[86]
[86] Ms Hobson’s November 2010 Affidavit, para.114; Ms Hobson’s May 2013 Affidavit, para.6.
g)alleged paid work at B2B since May 2010 Ms Hobson repeats paragraph 43(a) and (d) above;
h)alleged inconsistency between history reported to Dr Wu and Ms Hobson’s sworn evidence, Ms Hobson submits that:
i)the respondents’ assertion that the history provided by Ms Hobson to Dr Wu, as recorded in Dr Wu’s Report is “at odds with the affidavit evidence of Mrs Hobson and fails to record significant relevant events concerning her mental wellbeing and past history as well as her ability to work” is incorrect;
ii)it is irrelevant to Ms Hobson’s claim for damages or compensation for loss of earnings for the period March to June 2010; and
iii)Dr Wu reviewed Ms Hobson on 6 May 2010. The history contained in Dr Wu’s Report is consistent with:
A. the contents of the Gemini Documents;
B. the evidence given by Ms Hobson regarding those matters in Ms Hobson’s November 2010 Affidavit, Ms Hobson’s February 2011 Affidavit or Ms Hobson’s May 2013 Affidavit; and
C. the evidence given by Ms Nella in Ms Nella’s December 2010 Affidavit;
i)alleged inconsistency between reported stress on 30 April 2009 and 1 January 2010 and Ms Hobson’s sworn evidence, Ms Hobson submits that:
i)she reported stress at work to Dr Tandon on 30 April 2009.[87] That is not inconsistent with the evidence contained in Ms Hobson’s November 2010 Affidavit, Ms Hobson’s February 2011 Affidavit or Ms Hobson’s May 2013 Affidavit;
[87] See the Gemini Documents.
ii)whether or not Ms Hobson suffered stress at her previous place of work at the Department of Child Protection in April 2009 is irrelevant to her claims against the respondents arising out of her employment at INVision Investigations which began in July 2009; and
iii)she reported stress at work on 1 January 2010. That is not inconsistent with the matters alleged in Ms Hobson’s original or amended Form 2 Claims, or the evidence contained in Ms Hobson’s November 2010 Affidavit, Ms Hobson’s February 2011 Affidavit or Ms Hobson’s May 2013 Affidavit; and
j)alleged inconsistency between Ms Hobson’s reporting being bullied into a full time contract and her sworn evidence, Ms Hobson reported to Dr Zaman on 22 February 2010 that “…the boss – he is bullying her into a full time contract” is consistent with paragraphs 27 to 35 of Ms Hobson’s November 2010 Affidavit;
k)alleged inconsistency between subpoenaed documents and Ms Hobson’s sworn evidence, Ms Hobson submitted that:
i)for the reasons stated above, the contents of the Gemini Documents are consistent with her sworn evidence; and
ii)as to the ANZ Documents, the existence of the B2B Contract and the additional two payslips is explained by Ms Hobson’s May 2013 Affidavit;
l)the allegation that if Ms Hobson had “nothing to hide” she would not have opposed the respondents’ applications for leave to inspect subpoenaed documents, Ms Hobson submits that:
i)the assertion is unsupported by any evidence, and is contradicted by the evidence given by Ms Hobson;[88]
[88] Ms Hobson’s May 2013 Affidavit, paras.63-64.
ii)Ms Hobson opposed the applications for leave to inspect the ANZ Documents and the Gemini Documents for the reasons set out in detail in Ms Hobson’s submissions filed in these proceedings for the hearings on 27 April 2011 and on 10 July 2012;
iii)the respondents’ allegation is essentially that any party who opposes an application for leave to inspect subpoenaed documents must have “something to hide.” That proposition should not be endorsed; and
iv)various particulars are contained in paragraph 28 above. Ms Hobson’s response to each of those particulars is as follows:
A. as to the alleged non-disclosure of a previous incident of workplace stress caused by bullying in April 2009 she relies on paragraph 43(i) above;
B. as to the alleged non-disclosure by Ms Hobson to Dr Wu of a previous incident of workplace stress caused by bullying in April 2009, Ms Hobson relies on paragraph 43(i) above, and says that whether she did or did not report to Dr Wu regarding stress or bullying by a previous employer in April 2009 is irrelevant to the claims made by Ms Hobson against the respondents;
C. as to the alleged inconsistency between continuing her claim and later obtaining full time employment and becoming a director of B2B and other companies, Ms Hobson submits that:
1) the respondent’s allegation of inconsistency is incorrect;
2) Ms Hobson commenced these proceedings on 11 May 2010;
3) her claim is for, amongst other remedies, damages equal to the remuneration she would have earned had the Contract run for its fixed term, declarations and the imposition of a pecuniary penalty in respect of adverse action which occurred prior to 1 March 2010;
4) the fact that Ms Hobson became a director of B2B in August 2010 and a director of other companies between January 2011 and February 2013 is not inconsistent with her claim; and
5) the fact that Ms Hobson eventually obtained full time employment again is neither surprising nor inconsistent with her claim or her evidence regarding her fitness for work and later work;
D. as to the failure to disclose to the Court the B2B Contract or her directorship at B2B and other companies, Ms Hobson says that:
1) as to the B2B Contract, Ms Hobson relies on paragraph 43(b) above;
2) as to her becoming a director of B2B in August 2010, that fact is not inconsistent with her original or amended Form 2 claim or any of her evidence. It is consistent with Ms Nella’s evidence contained in paragraph 55 of Ms Nella’s December 2010 Affidavit;
3) as to Ms Hobson becoming a director of other companies between January 2011 and February 2013, that fact is not inconsistent with Ms Hobson’s original or amended Form 2 claim or any of her evidence; and
4) none of those matters affected Ms Hobson’s entitlement to claim damages equal to the remuneration she would have earned had the Contract run for its fixed term (ie the period 1 March 2010 to 3 June 2010), declarations or the imposition of a pecuniary penalty in respect of adverse action which occurred prior to 1 March 2010;
E. as to the failure to disclose to her GP or to Dr Wu the B2B Contract Ms Hobson relies on:
1) paragraph 43(b) above as to the B2B Contract;
2) paragraph 43(a) above as to her health and fitness for work after 1 March 2010;
3) paragraphs 43(i) above as to the consistency between the history reported by Ms Hobson to Dr Wu; and
4) the above submissions as to the consistency between Ms Hobson’s sworn evidence and the contents of the Gemini Documents;
F. as to the alleged untruthfulness regarding Ms Hobson’s work at B2B and her income for the period 1 March 2010 and 3 June 2010 the respondents’ allegation of untruthfulness by Ms Hobson is incorrect, and she relies on paragraph 43(a) and (b) above;
G. as to the alleged unreasonableness arising out of the B2B Contract, earnings from other sources and directorship of other companies, Ms Hobson says that:
1) on 1 October 2010 the Court set down the matter for trial on 14 to 16 March 2011;
2) on 10 January 2011 the Court made trial directions, including for the exchange of further witness statements;
3) she filed her Notice of Discontinuance on 22 February 2011;
4) as to the B2B Contract, Ms Hobson relies on paragraph 43(b) above. Only upon receiving a copy of Ms Wambeck’s Affidavit did Ms Hobson remember that she had signed the B2B Contract;
5) as to “earnings from other sources”, Ms Hobson claimed damages for lost remuneration up to 3 June 2010 only. There were no “earnings from other sources” relating to that period which she failed to declare in these proceedings;
6) as to Ms Hobson becoming a director of B2B in August 2010, that fact is not inconsistent with Ms Hobson’s original or amended Form 2 claim or any of her evidence. It is consistent with Ms Nella’s evidence;[89] and
[89] Ms Nella’s December 2010 Affidavit, para.55.
7) as to Ms Hobson becoming a director of other companies in January 2011, that did not affect her claim for lost remuneration for the period up to 3 June 2010, declarations or the imposition of a pecuniary penalty;
H. as to her persistence with the application and discontinuance shortly before trial, Ms Hobson submits that:
1) she denies that she acted in the manner alleged in the respondents’ submissions;
2) the reasons that Ms Hobson discontinued shortly prior to trial are set out in Ms Hobson’s May 2013 Affidavit.[90] Ms Hobson persisted with the application because at all times she believed that she had been wronged and that her claim would succeed; and
[90] Ms Hobson’s May 2013 Affidavit, para. 54-67.
3) Ms Hobson discontinued because the distress, stress and her desire to protect her family reached a point at which she felt that she had no other choice. That decision was made on 22 February 2011 in the context of:
a)her having received in early February 2011 a copy of the statements sworn by Ms Wyllie and Mr Langmair which she found very distressing to read, as she believed that they contained a number of allegations about her and her family which were false, irrelevant to the matters in issue in the proceedings and of a highly personal in nature. Those allegations included:
i)that her husband had left her because of her pending double mastectomy;
ii)that she had had an affair and that was the reason her husband had left her;
iii)that she had left her family home in the UK because of fear of retribution after the show ‘Undercover Cop’ aired on UK television;
iv)that she had taken a holiday in the UK even though she wasn’t in a financial position to do that;
v)that she had lied about being a cancer survivor to ‘garnish sympathy’ and had never had ovarian cancer;
vi)that she had told Ms Wyllie that the main reason she had married her husband was because she was pregnant with her daughter Amie;
vii)that she had told Ms Wyllie that her husband used her credit card to buy her engagement ring;
viii)that she had told Ms Wyllie that her husband was a loser;
ix)that she had advised INVision Investigations and Ms Wyllie that a director of one of INVision Investigations’ clients had made “numerous inappropriate remarks to her of a sexual nature”;
x)that she had said to INVision Investigations that her sister was gay, refused to communicate with her and had a strained relationship with her; and
xi)that she had reported INVision Investigations to the WA Police, claiming that it illegally employed unlicensed investigators;
b)her distress and concern that if this matter proceeded to a hearing the above matters would be raised and she would be cross examined about them, and they might be referred to in a publicly accessible judgment; and
c)her receiving a copy of the subpoenas issued to Gemini Medical Centre and the ANZ Bank in February 2012, which she considered to be a further, unnecessary invasion of her privacy and a further attempt by the respondents to intimidate her.
The general approach of the respondents to claiming costs is misconceived. The respondents appear to contend that Ms Hobson should be punished by an adverse costs order due to her alleged non-disclosure and inconsistencies and untruthfulness in her evidence. Even if such non-disclosure, inconsistencies and untruthfulness existed (which Ms Hobson denies for all the reasons set out above) and were unreasonable, the respondents have not shown how any of that caused them to incur additional costs during the course of the proceedings. That is the applicable test.
The respondents also appear to contend that because Ms Hobson unsuccessfully opposed the respondents’ application for leave to inspect the Gemini Documents and the ANZ Documents an adverse costs order should be made against her. There is no authority supporting that proposition in the context of an FW Act claim. To the contrary, the authorities provide that the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act.[91]
[91] See Qantas Airways (No. 3) FCR at 402-403 per Tracey J; FCA at para.36 per Tracey J.
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.
Consideration
At the outset of these considerations it is appropriate to summarise Ms Hobson’s claims. Ms Hobson claimed that:
a)she had a fixed term contract from 3 February 2010 until 3 June 2010 which was terminated in breach of that contract on 1 March 2010, and she claimed damages for the remaining term of the fixed term contract;
b)she had various workplace rights including the right to personal or carer’s leave, rights under the relevant State occupational, health and safety legislation and workers’ compensation legislation, from which arose certain benefits to which she was entitled, such as the ability to make a complaint or enquiry or initiate a process or proceeding, and that she had proposed to exercise one particular workplace right, namely, the right to seek workers’ compensation in relation to the alleged bullying and intimidation, and that her dismissal was adverse action in contravention of those workplace rights (or one or any of them); and
c)she was dismissed because of a temporary absence on sick leave in contravention of her rights under s.352 of the FW Act.
In relation to the contraventions Ms Hobson sought declarations as to the contraventions, the imposition of a pecuniary penalty on each of the respondents, an order that the penalty be paid to her, and an order for compensation in respect of the contravention, and interest.
The Court commences from the premise that in the exercise of its jurisdiction under the FW Act, that jurisdiction is generally a “no costs” jurisdiction, subject to exceptions, one of which is the unreasonable act or omission exception in s.570(2)(b) of the FW Act.
In this case the respondents bear the onus of proving to the Court, to the Court’s satisfaction, that an unreasonable act or omission by Ms Hobson has caused the respondents to incur costs. Thus, the Court must be satisfied that there is an “unreasonable” act or omission, and it is then within the Court’s discretion to award costs, if costs have been incurred by the party applying for costs.
In this case, the respondents seek the costs of the totality of the proceedings. In this case, there is no fundamental hurdle to the proceedings, which if notice of it had been given, ought to have caused Ms Hobson to pause, and consider the reasonableness of proceeding with her action.[92]
[92] Contrast Poole where there was a fundamental obstacle in terms of the Court’s jurisdiction to deal with the claim.
In relation to the contract claim, the Court is not persuaded that the monies received by Ms Hobson from B2B in relation to services rendered by her to B2B, or the entering into of an employment contract after her services had been terminated by INVision Investigations, constituted unreasonable acts which ought to give rise to payment of costs in these proceedings.
On the face of it, there is nothing in the evidence which would indicate that Ms Hobson was prevented from working with B2B, even whilst still employed with INVision Investigations. Once her contract of employment was terminated by INVision Investigations, she was under an obligation to mitigate her loss, and it was therefore not unreasonable to enter into a contract of employment with B2B (or any other prospective employer). The obligation requires an employee to diligently seek suitable alternative employment.[93]
[93] See Sappideen & Ors, Macken’s Law of Employment (6th Edition) (Pyrmont: Law Book Co, 2009), page 410 citing Brace v Caulder [1895] 2 QB 253.
Issues associated with whether or not the information given concerning the contractual arrangements, or work performed for, B2B are correct are issues which only go to Ms Hobson’s credit, and not the issues of loss, mitigation and remedy, if any, which would be available in the event that a loss was proven. Ms Hobson was entitled to look for, find and test the employment market for alternative employment both before she left INVision Investigations (that is while she was employed by it), and after she was terminated. The nature of her contractual dealings with B2B also does not go to the issue of whether or not there was a contravention by INVision Investigations in relation to Ms Hobson’s workplace rights.
The fact that Ms Hobson asserted she was bullied and intimidated at INVision Investigations does not necessarily mean that she was not capable of working in an environment which she perceived to be non-bullying, or non or less intimidatory, than the working environment at INVision Investigations. Thus, the mere fact that she was looking for other employment, or that she obtained other employment, does not necessarily go to show that she could have continued to work at INVision Investigations. If Ms Hobson made statements to her doctor that she was performing unpaid work at B2B, and if at the time those statements were made they were false, that has very little impact in terms of whether or not she is entitled to a contractual remedy as a consequence of a breach of contract by INVision Investigations. Moreover, it has no impact upon the question of whether or not there was a contravention of the FW Act by INVision Investigations in the manner asserted by Ms Hobson. Whether the statement was true or not, and whether it goes to Ms Hobson’s credit, was a matter to be determined at any hearing, but, in any event, it is largely irrelevant to the remedies sought with respect to breach of contract, and declaration, and imposition of penalty for a contravention, if found.
The fact that more than 10 months after Ms Hobson’s termination she was appointed as a director and secretary of various companies is a matter which in the Court’s view would have been of little weight or relevance. It was certainly not determinative of the contractual case alleged by Ms Hobson, nor could it have been relevant to the issue of whether or not contraventions of the FW Act actually occurred, or whether a penalty ought to be imposed for those contraventions. It might have impacted upon the question of whether any penalty ought to be paid to Ms Hobson, or whether she ought to be paid any compensation arising from the contravention, but those were matters for submission at hearing, and do not constitute an unreasonable act or omission for the purposes of the awarding of costs. Even a failure to disclose these appointments would not constitute an unreasonable act, as the most elementary of searches by the respondents’ solicitors would have enabled this information to be obtained in advance of any hearing, and for any proper questions (going to the issue of, for example, compensation) to be put to Ms Hobson, assuming that the issues are relevant (which is not beyond doubt).
Nothing in the matters raised by the respondents in relation to the alleged unreasonable acts or omissions by Ms Hobson obviate the fact that had the notice of discontinuance not been filed it would still have been necessary for the Court to determine:
a)whether there had been a breach of contract;
b)what the measure of damages, if any, for that breach of contract were;
c)whether there had been a contravention as alleged;
d)whether it was necessary to impose a penalty in relation to any contravention found, and if so, what the amount of the penalty ought to be; and
e)whether any penalty ought to be awarded to Ms Hobson; and
f)whether any compensation ought to be paid to Ms Hobson in relation to any contravention found.
In relation to both the contract and FW Act claims it cannot be said that they were incompetent, hopeless or unsupportable, and in those circumstances, the making of the application by Ms Hobson and the progression of the litigation to the point at which it was listed for hearing, and affidavits were filed, cannot be said to constitute an unreasonable act or omission.[94]
[94] Clarke FCR at 582 per Tamberlin, Gyles, and Gilmour JJ; FCA at para.29 per Tamberlin, Gyles and Gilmour JJ.
Indeed, it is necessary to observe, that the matters relied upon by the respondents to sustain their argument with respect to an award of costs in this matter (many of which are set out at paragraph 28 above) are matters of merit or credit for determination on a full hearing of the issues, and are not matters for determination in that manner on a costs application based upon an exclusion which requires the Court to be satisfied that the party against whom costs are sought has engaged in unreasonable acts or omissions. This is simply not the occasion for a hypothetical determination of merit and credit which, in large part, is what has been sought by the respondents in these costs proceedings.
The respondents asserted that it was a relevant, but undisclosed until disclosure by reason of the Gemini Documents, fact that Ms Hobson had prior to her employment with INVision Investigations suffered workplace stress elsewhere, shortly before her engagement by INVision Investigations. Ms Hobson says, probably correctly, that that is irrelevant. However, if it is relevant, it is a matter to be established at hearing as to why it is relevant in the context of the factual allegations made by Ms Hobson as to subsequent bullying and intimidation by Ms Wyllie and Mr Langmair.
The respondents’ assertions that Ms Hobson opposed the matters related to production and inspection of documents under the subpoenas to Gemini Medical Services and the ANZ Bank because she had “something to hide” is entirely speculative. In any event, the matters which it is alleged that she has endeavoured to hide, do not, for reasons set out above, go directly to the primary allegations of breach of contract and FW Act contravention, and if they are at all relevant, they are only relevant to, possibly, Ms Hobson’s contractual remedy in damages, and in relation to the contravention, whether the penalty ought to be paid to Ms Hobson or she ought to be paid some form of compensation. In the circumstances, what was disclosed by reason of the Gemini Documents and the ANZ Documents were, in the Court’s view, insufficient in any event to warrant a conclusion that Ms Hobson acted unreasonably by trying to hide anything, and the matters which it was asserted that she has endeavoured to hide were matters which may or may not have been explainable, either for the reasons given by Ms Hobson in affidavit evidence already filed, or otherwise.
Finally, the Court is of the view that it was not unreasonable for Ms Hobson to discontinue the litigation as a consequence of the fear of disclosure of some or all of the personal issues raised, many of which were possibly irrelevant to the proceedings in any event, in Mr Langmair’s Affidavit and Ms Wyllie’s Affidavit. Given the nature of the issues raised by those affidavits it was perfectly reasonable for Ms Hobson to make an assessment as to whether or not she wished to continue with the litigation and have to deal with those issues. That is notwithstanding that it may or may not have been anticipated that those issues would be raised as part of the course of the litigation. Discontinuance by reason of the stress imposed by the litigation, and the circumstances outlined in this case, was not an unreasonable act or omission by Ms Hobson. The fact that the notice of discontinuance was filed relatively late, or that it might have been filed earlier, is not sufficient, in all of the other circumstances of this case, to engage s.570(2)(b) of the FW Act.[95]
[95] Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ; FCAFC at para.29 per Tamberlin, Gyles and Gilmour JJ; Rentuza IR at 213 per Lucev FM; FMCA at paras.27(b) and (c) per Lucev FM.
In all of the above circumstances, the Court is simply not satisfied that there were any unreasonable acts or omissions by Ms Hobson in the course of these proceedings. It follows that the respondents are therefore not entitled to an order for costs in these proceedings.
Conclusions and orders
The Court has concluded that there was no unreasonable act or omission by Ms Hobson, and that the respondents are not entitled to costs, and, therefore, the respondents’ application under s.570(2)(b) of the FW Act for the costs of the proceedings is to be dismissed. There will be an order accordingly.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 20 December 2013
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