Hobson v BWL Pty Ltd & Ors (No.3)
[2012] FMCA 439
•1 June 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HOBSON v BWL PTY LTD & ORS (No.3) | [2012] FMCA 439 |
| INDUSTRIAL LAW – Costs – where proceedings under the Fair Work Act 2009 (Cth) discontinued – request to inspect subpoenaed documents in relation to costs application. PRACTICE AND PROCEDURE – Notice of discontinuance – request to inspect subpoenaed documents after discontinuance of proceedings – costs under the Fair Work Act 2009 (Cth). COSTS – Where proceedings under the Fair Work Act 2009 (Cth) discontinued – request to inspect subpoenaed documents in relation to costs application. |
| Fair Work Act 2009 (Cth), ss.340, 352, 570 Fair Work Bill 2008 (Cth), Explanatory Memorandum para.2228 Federal Court of Australia Act 1976 (Cth), s.4 Federal Court Rules (Cth), O.22, r.2(1) Federal Court Rules 2011 (Cth), O.26, r.12(7) Federal Magistrates Act 1999 (Cth), ss.3, 5, 79(2) and (3) Federal Magistrates Court Rules 2001 (Cth), rr.1.03, 1.05, 1.06, 13.02, 15A.2, 15A.13, 15A.14, 21.02(1) and (2), 21.07, 21.10, Division 15A.2 Judicature Act 1875 (UK), s.21 Rules of the Supreme Court (UK), O.21, r.3(1) |
| Australian and International Pilots Association v Qantas Airways Ltd (No.3) (2007) 162 FCR 392; [2007] FCA 879 Vincent & Vincent [2009] FMCAFam 308 |
| 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: | Lucev FM |
| Hearing date: | 27 April 2011 |
| Date of Last Submission: | 27 April 2011 |
| Delivered at: | Perth |
| Delivered on: | 1 June 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Ellis |
| Solicitors for the Applicant: | Tottle Partner Lawyers |
| Counsel for the Respondents: | Ms M Saraceni |
| Solicitors for the Respondents: | Norton Rose Australia |
ORDERS
Pursuant to r.1.06 of the Federal Magistrates Court Rules 2001 (Cth) (“Rules”) any requirement for the respondents to comply with r.15A.13(1)(b) and (c) of the Rules be dispensed with forthwith.
The applicant’s objections to the production, inspection and copying of documents produced pursuant to subpoenas issued on 9 February 2011 to each of The Proper Officer, Gemini Medical Services and The Proper Officer, Australia & New Zealand Banking Group Ltd be listed for hearing at 10.15am on 10 July 2012.
The applicant to file and serve an outline of submissions for the hearing in order (2) by 26 June 2012.
The respondent to file and serve an outline of submissions for the above hearing in order (2) by 3 July 2012.
Costs, if any, reserved.
| FEDERAL MAGISTRATES 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
Issue
The issue for these proceedings is whether the respondents[1] can inspect documents produced under two subpoenas issued[2] at the respondents’ request prior to the filing of a notice of discontinuance[3] by the applicant,[4] where inspection of the documents is sought to support the respondents’ argument as to costs.
[1] “INVision Investigations, Ms Wyllie and Mr Langmair” respectively.
[2] “Subpoenas”,
[3] “Notice of Discontinuance”.
[4] “Ms Hobson”.
The issue set out above gives rise to two intertwined sub-issues, namely:
a)whether the respondents’ right to inspect the documents provided to the Court pursuant to the Subpoenas continues notwithstanding the discontinuance of the action insofar as it relates to Ms Hobson’s claim; and
b)whether an order for inspection of the documents might be made as an incidental exercise of the express power to award costs under s.570 of the Fair Work Act 2009 (Cth).[5]
[5] “FW Act”.
The parties’ submissions were made by reference to the above two sub-issues.
Factual background
In the application filed on 11 May 2010 the orders sought were said to be the orders set out in the claim filed with the application. The claim filed with the application at “Part H – Remedies sought” refers to “Annexure A” in response to the question “What are you asking the Court for?” In the form of a statement of claim Annexure A sets out:
a)the background;
b)an alleged breach of contract;
c)alleged adverse action on the basis of workplace rights;
d)an alleged dismissal because of temporary absence; and
e)claims the following:
i)damages for breach of contract;
ii)a declaration of contravention of s.340, alternatively s.352, of the FW Act;
iii)the imposition of a pecuniary penalty;
iv)an order that any penalty be paid to the applicant;
v)an order that the respondents and each of them pay the applicant compensation in respect of the contravention; and
vi)interest.
The claims made, as set out above, remained unamended:
a)in a minute of proposed amended claim filed 23 July 2010; and
b)in the amended claim filed on 29 July 2010.
In both the response filed on 4 June 2010 and the amended response filed on 8 October 2010 the respondents counter-claimed “for all costs” associated with their “defence of the current proceedings” and relied on s.570(2) of the FW Act in relation thereto.
On 9 February 2011 the Court issued the Subpoenas on application by the respondents, and ordered the Australian and New Zealand Banking Group Ltd[6] and Gemini Medical Services to produce documents to the Court by 2.30pm on Friday, 25 February 2011.[7]
[6] “ANZ Bank”.
[7] The “ANZ Bank Subpoena” and “Gemini Medical Services Subpoena” respectively.
The ANZ Bank Subpoena sought production of the following:
Copy of any letters and correspondence from employers, prospective employers or former employers of Nina Hobson, provided to the Australian & New Zealand Banking Group Ltd in relation to the mortgage entered into by Nina Hobson and/or Matthew James Hobson, for the following property:
Lot 526 on Plan 11056
Volume 1396, Folio 334
Street Address: 25 Darley Circle, Bull Creek, West Australia[8]
[8] Schedule to ANZ Bank Subpoena.
The Gemini Medical Services Subpoena sought production of the following documents:
Copy of all documents, notes, records, certificates and correspondence in relation to Nina Hobson, for the period up to and including 3 June 2010.[9]
[9] Schedule to Gemini Medical Subpoena.
At the time the Subpoenas were issued the application had been set down for a three day hearing from 14 to 16 March 2011. The Subpoenas were listed for hearing before a Registrar at 2.30pm on Friday, 25 February 2011. On Tuesday, 22 February 2011 the applicant filed the Notice of Discontinuance.
The Notice of Discontinuance is in question and box answer form.
In the Notice of Discontinuance question 2 is in the following form:
2.Document in which you made the application you now want to discontinue
Title of document Application – Fair Work Division
Date filed 11 May 2010
Question 3 in the Notice of Discontinuance and its answer provide as follows:
3.Which of the orders you applied for do you want to discontinue?
(select one box only)
x(a) all of them
(b) only some of them (list the orders by the number used in that document – do not set out the orders in full)
The Notice of Discontinuance was signed by a lawyer representing Ms Hobson.
Following 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.
On Thursday, 24 February 2011 Ms Hobson lodged objections to the inspection (and formally also to the production and copying) of documents produced pursuant to the Subpoenas.[10] The matter was thereupon referred by a Registrar to the Court, constituted by a Federal Magistrate, and a hearing before a Registrar, which had been listed for 25 February 2011, was cancelled by the Registrar.
[10] “Objections”.
In a directions hearing on 10 March 2011 the respondents made an oral application for the costs of the application.[11]
[11] See order 2 of the Court’s orders of 10 March 2011.
In relation to costs orders of earlier proceedings there is:
a)one order for costs in the cause dated 28 May 2010; and
b)three orders for costs reserved on 22 July 2010, 10 January 2011 and 10 March 2011.
Relevant legislation
Rules 15A.13 and 15A.14 of the Federal Magistrates Court Rules 2001 (Cth)[12] provide as follows:
[12] “FMC Rules”.
Rule 15A.13
(1) This rule applies if:
(a) the Court or a Registrar issues a subpoena for production of a document under rule 15A.02; and
(b) the issuing party serves a copy of the subpoena on each other party, any interested person and any independent children's lawyer in accordance with rule 15A.06, at least 10 days before the day stated in the subpoena for production; and
(c) the issuing party files a notice of request to inspect in an approved form.
(2) If a person subpoenaed, another party or an interested person has not made an objection under rule 15A.14 by the date required for production, each party and any independent children's lawyer may, after that day:
(a) inspect a subpoenaed document; and
(b) take copies of a subpoenaed document, other than a child welfare record, criminal record, medical record or police record.
(3) Unless otherwise ordered, the inspection is by appointment and without an order.
Rule 15A.14
(1) A person who objects to producing a document subpoenaed, or another party or an interested person who objects to the inspection or copying of a document subpoenaed by a party to the proceedings, must notify the Registrar and the issuing party, in writing, of the objection and the grounds of the objection before the day stated in the subpoena for production.
(2) If an issuing party seeks the production of a person's medical records, the person may, before the day stated in the subpoena for production, notify the Registrar in writing that he or she wants to inspect the records for the purpose of determining whether to object to the inspection or copying of the document by any other party.
(3) If notice is given under subrule (2):
(a) the person may inspect the medical records and notify the Registrar in writing of an objection (including the grounds of the objection) within 7 days after the day stated in the subpoena for production; and
(b) unless otherwise ordered, no other person may inspect the medical records until the later of:
(i) 7 days after the day stated in the subpoena for production; or
(ii) the hearing and determination of the objection, if any.
(4) A subpoena that is the subject of a notice of objection under this rule must be referred to the Court or Registrar for the hearing and determination of the objection.
Rule 13.02 of the FMC Rules provides as follows:
(1) If a party discontinues an application, or part of an application, another party in the proceeding may apply for costs.
(2) Unless the Court or a Registrar directs otherwise, an application for costs must be made by a party within 28 days after service on the party of the notice of discontinuance.
(3) If an order for costs is made against a party and the party brings against the party to whom the costs are payable a further proceeding on the same or substantially the same matter, the Court may stay the further proceeding until the costs are paid.
Section 570 of the FW Act is also relevant, and provides as follows:
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before FWA;
(ii) the matter arose from the same facts as the proceedings.
The discontinuance sub-issue
Respondents’ submissions
The respondents submit that:
a)the Court should make an order granting the respondents access to the documents produced in compliance with the Subpoenas because:
i)a discontinuance does not alter the status of the parties; and
ii)where a party has acquired certain rights in the course of proceedings, a notice of discontinuance will not extinguish those rights;
b)on the issuance of orders for the Subpoenas on 9 February 2011, the respondents acquired the right to inspect all documents produced in compliance with those Subpoenas, in accordance with Division 15A.2 of the FMC Rules, subject to any ruling on the Objections;
c)under r.15A.13 of the FMC Rules, the respondents have a right to inspect the documents produced in compliance with the Subpoenas, on the basis that r.15A.13(1)(a)-(c) of the FMC Rules are satisfied;
d)in the factual circumstances of this matter, the respondents submit that r.15A.13(1)(a) and (b) of the FMC Rules have been satisfied and, in fact, were satisfied prior to the filing of the Notice of Discontinuance;
e)the respondents were not able to satisfy r.15A.13(1)(c) of the FMC Rules because the “approved form”, which is a “Notice of request to inspect in accordance with the FMC Rule 15A.13(1)(c)”,[13] states that the “… form WILL NOT BE ACCEPTED FOR FILING UNTIL AFTER THE DATE OF PRODUCTION”, and that the Inspection Notice cannot be signed, completed and filed if a notice of objection has been received, which occurred in this matter;
f)since the respondents were not able to complete the Inspection Notice, the respondents could go no further with satisfying r.15A.13(1)(c) of the FMC Rules until the Objections had been dealt with, but were unable to do so because a Registrar of this Court referred the Objections to be dealt with by the Court constituted by a Federal Magistrate;
g)Ms Hobson acquired the right to object to the inspection of the documents produced pursuant to the Subpoenas under r.15A.14 of the FMC Rules, which she exercised, a right not extinguished by the filing of the Notice of Discontinuance;
h)if the Court does not accept that the respondents had a right prior to the Notice of Discontinuance being filed to request inspection of the documents, then the respondents submit that a discontinuance does not prevent subsequent applications being made in the proceedings after the filing of a discontinuance; and
i)any application made by the respondents to inspect the documents produced in compliance with the Subpoenas, albeit that the Notice of Discontinuance has been filed, is able to be heard and determined, however, this is unnecessary because the same orders can be made on the proceedings as they stand.
[13] “Inspection Notice”.
Ms Hobson’s submissions
Ms Hobson submits that:
a)filing a Notice of Discontinuance brings proceedings to an end, and as a general proposition, no further steps can be taken in proceedings following discontinuance;
b)it is not open to the respondents to argue that there are separate proceedings on foot seeking costs which might found jurisdiction as the costs of civil proceedings are not recoverable as damages in that proceeding, or in a related or subsequent proceeding, a position that the respondents appear to have accepted by making a separate application for costs in the proceedings;[14]
[14] See para.17 above: on 10 March 2011 the respondents made an oral application for the costs of the application.
c)there are a limited number of recognised exceptions to the general principle that once a notice of discontinuance is filed, the Court’s jurisdiction ceases, those limited exceptions including:
i)hearing an application as to costs;
ii)enforcing an undertaking given to a court by a plaintiff on obtaining an injunction; and
iii)in certain circumstances, allowing the party that filed the notice of discontinuance to withdraw that notice of discontinuance;
d)the cases relied on by the respondents do not establish any more general exception and involve the application of a well recognised principle that courts have jurisdiction to make ancillary or supplemental orders after proceedings are discontinued, at least in respect of costs;
e)the respondents have sought costs under s.570 of the FW Act. Ms Hobson does not dispute the respondents’ entitlement to make the application for costs. Ms Hobson does dispute the respondents’ entitlement to costs, but says those issues are discrete from:
i)the issue of the Subpoenas; and
ii)the question of inspection of the documents the subject of the Subpoenas under r.15A.13 of the FMC Rules, in respect of which the jurisdiction of the Court to permit inspection has come to an end with the discontinuance of the proceedings as a whole;
f)rule 15A.13(2) of the FMC Rules, read together with r.15A.14(4) of the FMC Rules, makes it clear that if an objection to a subpoena has been filed before the date for production:
i)the documents produced cannot be inspected; and
ii)the objection must be referred to the Court or a Registrar for hearing and determination.
Thus any alleged right to inspect does not arise until the requirements in r.15A.13(a)-(c) of the FMC Rules are all satisfied. In this case, the requirement in r.15A.13(c) of the FMC Rules has not been satisfied, and the right did not arise before the Notice of Discontinuance was filed, and has not arisen since; and
g)if, which is denied, the respondents obtained a right to inspect the documents, that right was a procedural, not a substantive, right and was extinguished when the proceedings were discontinued.
The implied incidental power sub-issue
Respondents’ submissions
The respondents submit that:
a)the Court may exercise its implied incidental power to make orders necessarily incidental to express powers;
b)the Court has an express power to order costs under s.570 of the FW Act, and as such, notwithstanding the Notice of Discontinuance, the express power to orders costs remains an issue to be determined between the parties;
c)the Court has the power to make an order granting the respondents access to the documents produced pursuant to the Subpoenas, as a power that is incidental to its express power to order costs;
d)with regard to costs under s.570 of the FW Act, an order may only be made if it is proved that the applicant:
i)commenced the proceeding vexatiously or without reasonable cause; or
ii)due to an unreasonable act or omission caused the respondents to incur costs;
e)the respondents rely on both limbs of s.570 of the FW Act in their claim for costs against Ms Hobson;[15]
[15] The respondents seemingly do not rely upon the third limb in s.570(2)(c) of the FW Act, namely unreasonable refusal to participate in a matter before Fair Work Australia.
f)the respondents allege that, amongst other things, Ms Hobson commenced the proceedings vexatiously and engaged in unreasonable acts, which included perjury and misleading the Court. For instance, in Ms Hobson’s affidavit sworn 15 October 2010[16] and read into Court on the same date, she swears:
[16] “Ms Hobson’s Affidavit”.
i)at paragraph 3:
a. In respect of category (a), I do not have any such documents within my possession, custody or control; …
The category “a” documents referred to were:
contracts of employment, letters of engagement, independent contractor arrangements and correspondence which set out the terms and conditions of the employment/arrangement in relation to the provision of services of the Applicant in exchange for the payment, operative or created between 1 March 2010 and 3 June 2010.
ii)at paragraph 4:
My association with B2B at the time I sent those emails (and during the whole of the period 1 March 2010 to 3 June 2010) 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 3 June 2010 (apart from the payment mentioned above in paragraph 3(e)(ii), which related to work performed before 1 March 2010).
iii)at paragraph 6:
a. I was employed only on an informal, undocumented and unpaid basis by B2B during the period 1 March 2010 to 3 June 2010;
b. I have no documents relating to my employment with B2B during the period 1 March 2010 and 3 June 2010;
c. I received no income from B2B during the period 1 March 2010 to 3 June 2010 …
g)that Ms Hobson has been untruthful is evident because a director of B2B, the former employer of Ms Hobson, has provided the following documents to the respondents’ lawyers:
i)a contract of employment, between Ms Hobson and B2B Film Production House;
ii)a signed back page of an employment contract, dated 22 March 2010; and
iii)two pay slips, dated 4 April 2010 and 18 April 2010;[17]
[17] Affidavit of Elaine Wambeck, sworn 31 March 2011 (“Ms Wambeck’s Affidavit”).
h)apart from the 4 April 2010 pay slip, the respondents were not provided with and had not previously sighted the other documents;
i)the Court can exercise an implied incidental power and order that the respondents have access to the documents produced pursuant to the Subpoenas for the purpose of potentially relying on the documents in its claim for costs;
j)given the Court’s express power as to costs, the respondents are able to make fresh applications, without leave of the Court, to issue subpoenas mirroring the Subpoenas;
k)the validity of the Subpoenas is likely to be tested against the relevant principles that apply in determining whether to set aside a subpoena, relevantly whether:
i)it has been used for a legitimate forensic purpose;
ii)the documents sought to be produced on their face, have some potential relevance to the issues in dispute between the parties; and
iii)the documents, which were sought from a non-party, specified with reasonable particularity the documents required to be produced;
l)the subpoenas have two legitimate forensic purposes, namely:
i)that the documents will go to obtaining material going to the credit of Ms Hobson which is a relevant and legitimate forensic purpose; and
ii)to obtain material to support the respondents’ claim for costs against Ms Hobson, which will materially assist the respondents in meeting the tests required under s.570(2)(a) and (b) of the FW Act;
m)the documents sought have been specified with reasonable particularity, or could be if fresh subpoenas were required;
n)if the respondents are able to satisfy the relevant principles, the Court should exercise its implied incidental power, being incidental to its express power to order costs, and order that the respondents:
i)are not required to re-issue the Subpoenas;
ii)that the Subpoenas are taken to have been re-issued and complied with on the date the order is made; and
iii)may inspect and copy the documents already produced and held by the Court;
o)the Court is exhorted to operate informally, and to use streamlined procedures under s.3 of the Federal Magistrates Act 1999 (Cth),[18] and rr.1.03 and 1.06 of the FMC Rules, and the Court should therefore exercise its power under r.1.06 of the FMC Rules to dispense with compliance with the Division 15A.2 of the FMC Rules, and order that the respondents can inspect the documents produced in compliance with the Subpoenas, in the interests of justice, particularly where the second and third respondents are individuals (Ms Wyllie and Mr Langmair) who have been personally sued by Ms Hobson; and
p)the Court can make an order granting the respondents access to the documents produced in accordance with the Subpoenas notwithstanding the Notice of Discontinuance.
[18] “FM Act”.
Ms Hobson submits that:
a)neither permitting the respondents access to the documents the subject of the Subpoenas, nor issuing fresh subpoenas, is “necessarily incidental” to determining an application for costs under r.13.02 of the FMC Rules;
b)the Court’s discretion under r.13.02 of the FMC Rules must be exercised in accordance with s.570 of the FW Act, under which the following principles apply:
i)whether costs should be awarded depends upon an objective analysis of the particular circumstances of the case; and
ii)there will not be a hypothetical trial of the merits of the dispute;
c)permitting inspection of the documents in not “necessarily incidental” to determination of the application for costs;
d)the respondents are not entitled to issue fresh subpoenas because the proceedings are at an end; and fresh subpoenas should not be issued or would be liable to be set aside because:
i)there are no substantive matters in dispute between the parties, and the proceedings having come to an end;
ii)the documents are not sought for a legitimate forensic purpose, but to enable the respondents to decide whether to pursue an application for costs, relying in that regard upon what was said by Counsel for the respondents at a directions hearing on 10 March 2011 where Counsel for the respondents said as follows:
MS SARACENI: Thank you, your Honour. My understanding of where we’re at is exactly as your Honour has set out. The applicant has discontinued her application insofar as the allegations that she’s made and the relief that she has sought. But from the very beginning, as stated in the response of the three respondents, was that fact that the respondents were going to seek costs at the end of the day, on the basis set out under section 570 of the Act. Now, when the subpoenas were originally issued there were matters that were in issue and they dealt with the applicant’s contentions about what she told or didn’t tell the bank. And that was relevant, obviously going to the breach of contract claim, and her claim for unlimited damages for that.
And then there was also a subpoena issued to the medical centre that issued the medical certificate for the period starting 22 February which was immediately prior to the cessation of employment, and one of the allegations in the application was unlawful termination due to temporary absence from work. So at the time the subpoenas were issued, those were matters that were live between the parties and the subpoenas were issued before the respondents had the ability to inspect - - -
HIS HONOUR: If you get the ability to inspect these documents, Ms Saraceni, how far does that take you? You can’t simply hand them up in a Federal Court exercising judicial power can you?
MS SARACENI: It may very well be, your Honour, that there is a need for cross-examination of the applicant. One of the issues obviously is - - -
HIS HONOUR: So we get to run the case even though it has been discontinued.
MS SARACENI: It wouldn’t be running the case, your Honour, the application that the respondents have made known to the applicant and the court from the beginning, was for costs on the basis that the application was frivolous or without reasonable cause or due to an unreasonable act or omission by the applicant. There is material already before the court on affidavit of the applicant and there are documents. There are further documents that are being sought.
Now, insofar as what the respondent says is to finally determine and to advise our clients, both the company and each of the two directors as to whether they should be bringing an application for costs, those two matters that were in issue originally, remain in issue. And viewing the documents will enable us to advise the clients as to whether there is enough in our view to proceed with an application for frivolous or without reasonable cause for unreasonable acts.
iii)alternatively, the documents are sought to impugn the credit of Ms Hobson. This is not a legitimate forensic objective, particularly on an interlocutory application; and
e)the effect of the Notice of Discontinuance is that the proceedings are at an end, that prior steps have been “obliterated”, and that the Court no longer has jurisdiction to make orders allowing inspection of the subpoenaed documents.
Consideration
Is there a right to inspect the documents under the subpoena?
Did the respondents have a right to inspect the subpoenaed documents under r.15A.13(2) of the FMC Rules? The short answer is “no” because:
a)on the respondents own case, no right to inspect arose because no Inspection Notice was filed, and the requirement under r.15A.13(1)(c) of the FMC Rules was therefore not met; and
b)there is no evidence that the Subpoenas were served, in accordance with r.15A.13(1)(b) of the FMC Rules, at least 10 days before the day stated in the subpoena for production, which day was 25 February 2011.
The above conclusion is however not the end of the matter. For if the action as to costs is ongoing, the respondents might yet get to inspect the subpoenaed documents if:
a)affidavits of service of the Subpoenas are filed; and
b)the Objections are heard and determined in favour of the respondents; and
c)an Inspection Notice is completed; or
d)in addition to hearing and determining the Objections in favour of the respondents, the Court dispenses with the requirements to file affidavits of service of the Subpoenas and complete an Inspection Notice.
That begs the question whether the action continues with respect to costs following the filing of the Notice of Discontinuance.
Costs following discontinuance in this Court
From very early in its history this Court has made costs orders in proceedings where an application has been discontinued,[19] and has also made orders to extend time in which to allow an application for costs orders following a discontinuance to be made.[20]
[19] NAGY v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FMCA 189; NAOY v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FMCA 275; Malik v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1369; Heyer v Burke [2007] FMCA 1627; SZMJQ v Minister for Immigration & Anor [2009] FMCA 19; see also Vincent & Vincent [2009] FMCAFam 308 at paras.74-75 per Coker FM.
[20] SZIZE v Minister for Immigration and Citizenship & Anor [2007] FMCA 132.
In Ingui v Ostara & Anor[21] the Court, on an application to withdraw a notice of discontinuance, said as follows:
27. A discontinuance terminates a proceedings, but preserves the plaintiff's right to commence another action based on the same complaint. Although the substantive rights of the parties concerned have not been determined and res judicata does not apply, a notice of discontinuance brings the proceedings to a close. The matter that is the subject of the discontinued proceedings can only be reactivated by the filing of a fresh application. This is clear by reason of Rule 13.02 that allows the Court to make an order to stay further proceedings if a subsequent application is made which relates to the same matter or substantially the same matter.
28. For this reason, it would be inappropriate, in my view, to allow the applicant to effectively withdraw her notice of discontinuance and so possibly compel the respondents to accept her proposal that the matter be resolved on the basis that both parties bear their own costs. Presumably the applicant was advised of the consequences of discontinuing these proceedings - that is they brought the proceedings to a close. The respondents are entitled to rely on the effect of that notice of discontinuance. Accordingly, this aspect of Ms Ingui's application is dismissed.[22]
[21] [2003] FMCA 132 (“Ingui”).
[22] Ingui at paras.27 and 28 per Brown FM.
The Court, however, went on to consider the issue of costs generally, and ordered that further submissions be filed. In Inguiv Ostara (No. 2),[23] a separate application for costs was made by way of application following the filing of the notice of discontinuance, and the Court made an order with respect to the payment of the respondents’ costs by the applicant who had discontinued the proceedings.
[23] [2003] FMCA 531 (“Ingui (No. 2)”).
In Ingui the Court observed that:
31. Pursuant to Rule 13.02 there is no presumption that a discontinuing party is liable to pay the other parties' costs. Pursuant to Rule 13.01, no leave is required from the Court for an applicant to discontinue proceedings.
32. ... Although there is no presumption of costs, ordinarily costs would follow the event of such a discontinuance, if in all the circumstances, it was reasonable to make such an order.[24]
[24] Ingui at paras.31-32 per Brown FM.
The Court went on to observe that there might be some distinction in relation to human rights matters (not relevant here), and then went on to observe that:
35. … Ms Ingui has been represented throughout the proceedings. The respondents are private individuals who are funding their own litigation. In my view, the evidence is clear that both respondents have indicated clearly throughout the proceedings that they contested the allegations made against them. The applicant was put on notice, at an early stage, that it was unlikely that the proceedings could be compromised. This was not a case where it is readily apparent that there is any matter of legal principle at stake in the outcome of the proceedings. By reason of the decision she took to discontinue her proceedings, Ms Ingui must be taken to have realised the perils of continuing such litigation.[25]
[25] Ingui at para.35 per Brown FM.
In Poole v Rod Baker & Co[26] an order for costs against the applicant’s lawyer personally was sought under s.570(2)(b) of the FW Act on the basis that the lawyer had acted unreasonably and caused the respondent to incur costs. Notice had been given by the respondent some significant time previously, of jurisdictional difficulties with the application. On the day of hearing, faced with those difficulties and a refusal by this Court to adjourn the matter, the applicant sought to discontinue. The respondent sought costs. This Court awarded the respondent the costs of the respondent’s application in a case to summarily dismiss the applicant’s application, and ordered that those costs be paid to the respondent by the lawyer personally.[27]
[26] (2011) 207 IR 267; [2011] FMCA 357 (“Rod Baker & Co”).
[27] Rod Baker & Co IR at 270-271; FMCA at paras.23-34 per O’Sullivan FM. Rule 21.07 of the FMC Rules provides that the Court may make an order for costs against a lawyer personally.
In limited circumstances this Court has power to set aside a notice of discontinuance where the filing was procured by fraud or abuse of process.[28] However, in this matter it is not sought to set aside the Notice of Discontinuance on those bases.
[28] Maddison v Qualtime Association Inc (2010) 113 ALD 390; [2010] FMCA 25.
Comity would ordinarily require that this Court follow earlier judgments of this Court determinative of the same issue, unless the Court considers the earlier judgments to be plainly wrong.[29]
[29] Minister for Immigration and Multicultural and Indigenous Affairs v SZANS (2005) 141 FCR 586 at 592 per Weinberg, Jacobson and Lander JJ; [2005] FCAFC 41 at paras.36-39 per Weinberg, Jacobson and Lander JJ; Lee & Ors v Minister for Immigration & Anor (2006) 205 FLR 117 at 133 per Driver FM; [2006] FMCA 480 at para.28 per Driver FM; See v Granich & Associates [2008] FMCA 27 at paras.16-18 per Lucev FM.
The question which then arises is whether the earlier judgments of this Court are plainly wrong.
Are the earlier judgments of this Court plainly wrong?
The earlier judgments of this Court hearing applications for, and awarding, or not, costs after the discontinuance of an application, are not plainly wrong because it is that course of action which is expressly contemplated by r.13.02 of the FMC Rules. Put simply, r.13.02 of the FMC Rules allows an application for costs to be made to this Court after an application has been discontinued, and if an application is made, it must be determined.
Even if r.13.02 of the FMC Rules did not apply, the Court would still be able to determine costs following discontinuance of an application, by the applying the repealed Federal Court Rules[30] or the current Federal Court Rules 2011 (Cth).[31] Where the FMC Rules are insufficient the Court may apply the relevant rules of the Federal Court, in whole or in part, and modified or dispensed with, as necessary.[32] Under the FC Rules a party discontinuing proceedings under O 22 r.2(1) without the consent of the other parties or without leave of the Federal Court was liable to pay the costs of the other party or parties occasioned by the whole or the relevant part of the proceeding.[33] Under the FC Rules 2011 it is provided that:
Unless the terms of a consent or an order of the Court provide otherwise, a party who files a notice of discontinuance … is liable to pay the costs of each other party to the proceedings in relation to the claim, or part of the claim, that is discontinued.[34]
[30] “FC Rules”.
[31] “FC Rules 2011”.
[32] FMC Rules, r.1.05(2).
[33] Federal Court Rules, O 22 r.3.
[34] FC Rules 2011, O 26 r.12(7).
Even if the FC Rules or the FC Rules 2011 did not apply or were not applied by this Court, the general law would still allow this Court to make an order for costs in respect of a proceeding that had been discontinued.
J T Stratford & Son Ltd v Lindley & Ors (No. 2)[35] concerned an interlocutory injunction which had been granted in a waterfront dispute. That injunction was appealed to the House of Lords which granted an interim injunction and ordered that the costs of the interlocutory proceedings be “costs in the cause”.[36] The proceedings then “went to sleep”[37] and “had simply lain like a dead pigeon in the street” until there was a “partial reviver” with two cross-summonses being taken out.[38] Neither side wanted to continue the action, but neither side wanted to pay the other’s costs, and so the defendants took out a summons to dismiss the action for want of prosecution and the plaintiffs took out a cross-summons seeking leave to discontinue upon terms that the defendants pay the plaintiffs’ costs. Before a Master and a Judge leave was granted to the plaintiffs to discontinue with no order as to costs. On appeal to the Court of Appeal those orders were upheld.[39] The Court of Appeal made it apparent however that there was a wide discretion as to costs where leave to discontinue was granted under the relevant rule. The rule provided that a party may not discontinue an action without the leave of the court, and that the court may order the action to be discontinued “on such terms as to costs … as it thinks just”.[40] The Court of Appeal declined to award the costs of the action to the plaintiffs based on a submission that it was probable that they would have won the action if it had been tried on its merits. It was held that the action could not be tried “at this stage”[41] as it was impracticable to assess:
a)theoretical prospects of success if the action had gone to trial; and
b)costs that might have been awarded given the breadth of discretion available as to costs.[42]
[35] [1969] 1 WLR 1547 (“J T Stratford”).
[36] J T Stratford at 1552 per Lord Denning MR.
[37] J T Stratford at 1553 per Lord Denning MR.
[38] J T Stratford at 1554 per Winn LJ.
[39] J T Stratford at 1554 per Lord Denning MR; at 1555 per Winn LJ; at 1555 per Cross LJ.
[40] J T Stratford at 1554 per Lord Denning MR; Rules of the Supreme Court (UK) O 21 r.3(1).
[41] J T Stratford at 1554 per Lord Denning MR.
[42] J T Stratford at 1554 per Winn LJ.
The Federal Court in Australian Securities Commission v Aust-Home Investments Ltd & Ors[43] dealt with a case where there had been no determination on the merits, but the appointment of receivers had been ordered where only some of the respondents were represented, and the court had treated the application as if it were made ex parte. On the application with respect to the costs of the proceedings the Court reviewed various cases in which a final determination of the merits of a matter was unnecessary, including J T Stratford. The Federal Court found that those cases supported the following propositions:
(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order: Stratford and the SEQEB case.
(2) 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. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.
(3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (SEQEB).
(4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf Sunday Times Newspaper Co Ltd v McIntosh (1933) 33 SR (NSW) 371.
(5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted: cf Re Asiatic Electric Co Pty Ltd [1973] 1 NSWLR 603 at 606, a case which, however, depended upon the specific wording of the statute under consideration.[44]
[43] (1993) 44 FCR 194 (“Aust-Home Investments”).
[44] Aust-Home Investments at 201 per Hill J. The propositions set out in Aust-Home Investments were adopted in Booth v Helensvale Golf Club Ltd [1997] 2 Qd R 141 at 142 per Mackenzie J in relation to the respondent’s costs where an applicant sought leave to discontinue.
In O’Neill v Mann[45] the Federal Court observed that the underlying policy of the FC Rules was that the discontinuing party should be liable for the other party’s costs unless the Court orders otherwise. However, the policy was not the usual rule because of the variety of circumstances in which, and reasons for which, a discontinuance might be sought.[46] The Federal Court went on to observe that:
The conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs. As McHugh J observed in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Qin (1997) 186 CLR 622 at 625 of one common category of case:
"[i]f it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases."
In applying this approach it is not the function of a court to make a prediction as to the outcome of a hypothetical case. And so in Mineralogy Pty Ltd v National Native Title Tribunal, above, no order as to costs was made where an appeal was discontinued in consequence of an amendment to the Native Title Act 1993 (Cth) that arguably altered the effect on the discontinuing appellant of the judgment appealed against: see also Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194. By way of contrast, where the discontinuance can be said to be an acknowledgment by an applicant of likely defeat or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made.[47]
[45] [2000] FCA 1680 (“O’Neill”).
[46] O’Neill at para.13 per Finn J.
[47] O’Neill at para.13 per Finn J.
In O’Neill the Federal Court made it apparent that evidence might be led to explain the reasons for a proceeding being discontinued, and that the absence of explanation might bear upon the exercise of discretion by a court as to costs.[48]
[48] O’Neill at paras.15 and 18 per Finn J.
In Money Tree Management Services and Institute of Taxation Research Pty Ltd v Deputy Commissioner of Taxation[49] the Full Court of the Supreme Court of South Australia ordered indemnity costs to be paid in respect of a notice of discontinuance filed immediately before the hearing of an appeal.[50]
[49] (2000) 46 ATR 13; [2000] SASC 345 (“Money Tree Management Services”).
[50] Money Tree Management Services ATR at 16 per Lander J (with whom Williams J at 16 and Wicks J at 16 agreed); SASC at para.21 per Lander J (with whom Williams J at para.22 and Wicks J at para.23 agreed).
In Gold Reefs of Western Australia, Limited v Dawson[51] a company named as co-plaintiffs in an action served notice of motion to strike out their name, and asked that the solicitors who had issued the writ might be ordered to pay the company’s costs, on the ground that their name had been used without their authority. Before the motion could be heard the solicitors served a notice wholly discontinuing the action. It was argued that the notice of discontinuance put an end to the action and to the motion of which notice had previously been served. The court observed that the rule provided that on wholly discontinuing the action the plaintiff shall pay the defendant’s costs of the action, but that it did not say in express terms that nothing else shall be done in the action. It was said that it was well settled under the pre-Judicature Act 1875 (UK)[52] practice that after the dismissal of a bill with costs a person whose name had been used as plaintiff without authority could obtain an order to strike out his name, and that the solicitor should indemnify him against costs. Nothing in the relevant rule altered that practice in express terms, and therefore the old practice continued to apply by reason of s.21 of the Judicature Act.[53] In the absence of evidence that the company’s name was used with authority the solicitors were liable for the company’s costs.[54]
[51] [1897] 1 Ch 115 (“Gold Reefs”).
[52] “Judicature Act”.
[53] Gold Reefs at 118-119 per North J.
[54] Gold Reefs at 119 per North J.
In Email Finance Limited v The Registrar of Titles & Anor[55] the Supreme Court of Victoria held that it had power to make an order dissolving an injunction notwithstanding the filing of a notice of discontinuance at a time at which the injunction was still in place. The Supreme Court of Victoria said there was jurisdiction to work out orders which had been in an action before the discontinuance, in addition to being able to award costs.[56]
[55] Unreported, Supreme Court of Victoria, No. 5636 of 1981, 1 September 1982 per Tadgell J (“Email Finance”).
[56] Email Finance at page 7 per Tadgell J.
Each of the cases cited above, read in conjunction with r.13.02 of the FMC Rules, make it plain that the earlier judgments of this Court awarding costs following the filing of a notice of discontinuance are not plainly wrong.
Therefore, there is nothing to prevent this Court from dealing with an application for costs in relation to an application which has been discontinued. Arguably, that would be even more so in this case where:
a)there is in the response a counterclaim for costs under s.570 of the FW Act; and
b)an oral application for costs of the proceedings, made within the relevant time limit of 28 days after discontinuance, in accordance with r.13.02(2) of the FMC Rules.
There is therefore no reason for the Court to preclude consideration of an application for costs in respect of the discontinued application.
Jurisdiction and power to award costs
The Court’s jurisdiction and power to award costs, other than in family law or child support proceedings, are set out in s.79(2) and (3) of the FM Act, as follows:
(2) The Federal Magistrates Court or a Federal Magistrate has jurisdiction to award costs in all proceedings before the Federal Magistrates Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Magistrates Court or Federal Magistrate.
Rule 21.02 of the FMC Rules provides that an application for costs may be made:
a)at any stage of the proceedings;
b)within 28 days after a final decree or order is made; or
c)within any further time allowed by the Court.[57]
[57] FMC Rules, r.21.02(1).
The Court can:
a)set the amount of costs;
b)set the method by which costs are calculated;
c)refer the costs for taxation under the FC Rules 2011; or
d)set a time for payment of those costs.[58]
[58] FMC Rules, r.21.02(2).
The general rule is that costs follow the event, and that unless the Court otherwise orders, a party is entitled to costs in a proceeding in accordance with Part 1 of Schedule 1 of the FMC Rules.[59]
[59] FMC Rules, r.21.10(a). See, for example, Hinchliffe v University of Sydney (No. 2) [2004] FMCA 640; Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No. 3) [2010] FMCA 250 at para.43 per Lucev FM (“Pierson’s (No. 3)”).
The costs scale under the FMC Rules is an event-based costs scale in respect of which a party receives a fixed sum in respect of specified events.[60] The fixed sum may be varied, up or down, by the Court in the exercise of its discretion.[61] Departure from the event-based scale is, however, the exception rather than the norm.[62]
[60] Colan Products Pty Ltd v Luxton Pty Ltd & Anor (No. 2) [2002] FMCA 90 at paras.5 and 7 per Raphael FM; Pierson’s (No. 3) at para.11 per Lucev FM.
[61] FM Act, s.79(3).
[62] Pierson’s (No. 3) at para.43 per Lucev FM.
Section 570 of the FW Act does not extinguish this Court’s jurisdiction to award costs in FW Act proceedings, as s.570 of the FW Act does not provide that “costs must not be awarded.”[63] That is, there is no absolute statutory bar to the award of costs.[64] Rather, s.570 of the FW Act “carves out another exception to the usual rule”[65] 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.[66] Where those 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.[67]
[63] FM Act, s.79(2).
[64] Halwood Corporation Ltd v Roads Corporation [1998] 2 VR 439 at 445 and 446 per Tadgell J; Boumelhem v Commonwealth Bank of Australia [2008] FCA 1121 at paras.9 and 12 per Buchanan J; Carantinos v Magafas (2008) 6 ABC(NS) 587 at 589 per Branson J; [2008] FCA 1107 at paras.8-9 per Branson J.
[65] 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.
[66] FW Act, s.570(2).
[67] FM Act, s.79(3).
In this matter the respondents seek an order for costs on the basis that:
a)Ms Hobson instituted the proceedings vexatiously or without reasonable cause;[68] or
b)Ms Hobson’s unreasonable acts or omissions caused the respondents to incur costs.[69]
[68] FW Act, s.570(2)(a).
[69] FW Act, s.570(2)(b).
The Court’s ability to award costs in a matter in which a notice of discontinuance is filed is also subject to r.13.02 of the FMC Rules, in that there must be an application for costs made in accordance with r.13.02 of the FMC Rules. However, the exercise of the discretion under r.13.02, is, like the Court’s ability to award costs generally in respect of FW Act proceedings, subject to the criteria for the award of costs set out in s.570 of the FW Act.
Specific aspects of costs under s.570 of the FW Act
The policy underlying s.570 of the FW Act remains as it was under predecessor legislation, namely, to limit the ability of courts to award costs in workplace relations matters as part of a policy of discouraging legalism in workplace relations proceedings.[70]
[70] Fair Work Bill 2008 (Cth), Explanatory Memorandum, para.2228.
The power to award costs is conditioned upon there being “proceedings (including an appeal) in a court … exercising jurisdiction under this [FW] Act …”.[71] In Thompson & Ors v Hodder & Ors[72] a Full Court of the Federal Court found that an application for leave to appeal, from an interlocutory judgment, is a proceeding in its own right. The Full Court of the Federal Court found that each of an application for a rule to show cause, a consequent application of interim orders, an appeal against those orders, a motion for a stay of judgment pending an appeal, and an application for leave to appeal from an interlocutory judgment, were a separate “proceeding” as defined in s.4 of the Federal Court of Australia Act 1976 (Cth).[73] Relevantly, the definition of “proceeding” in s.4 of the FC Act then read as follows:
"proceeding" means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding, and also includes an appeal…
[71] FW Act, s.570(1).
[72] (1989) 21 FCR 467 (“Thompson”).
[73] “FC Act”; Thompson at 469 per Keely, Gray and Ryan JJ.
There is no doubt that this Court is exercising jurisdiction under the FW Act in this matter which involves a claim of alleged dismissal in contravention of a general protection. There is also no doubt that each of the proceedings thus far, which have involved two applications in the case related to discovery, and this application in a case in relation to the right to inspect documents, are “proceedings” in this Court under the definition of “proceeding” in s.5 of the FM Act, which is as follows:
"proceeding" means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connection with, a proceeding, and also includes an appeal…
and which is essentially the same definition of “proceeding” considered by the Full Court of the Federal Court in Thompson.
Whether a party has engaged in “an unreasonable act or omission” depends upon the particular circumstances of the case,[74] and extends to unreasonable acts or omissions in connection with interlocutory applications.[75]
[74] Australian and International Pilots Association v Qantas Airways Ltd (No. 3) (2007) 162 FCR 392; [2007] FCA 879.
[75] 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.
In a costs application to which s.570 of the FW Act has application the respondent bears the onus of proof.[76] In many cases it may be necessary for evidence to be led to establish:
a)the act or omission alleged to be unreasonable; and
b)how the allegedly unreasonable act or omission resulted in costs being incurred.[77]
[76] Howard v Cummins (1988) 27 IR 109 at 111-112 per Keely J.
[77] See, for example, Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (No 2) [2011] FCA 934 at para.31 per Barker J (open to have regard to without prejudice correspondence exchanges culminating in rejection of a final offer of settlement) and Stuke v Rust Capital Group Pty Ltd & Ors [2011] FMCA 79 at paras.32-44 per Barnes FM (regard had to affidavit tendered annexing correspondence re the production of a “work” diary).
Conclusion – power to award costs following discontinuance
Therefore, the Court has power, indeed express power under r.13.02 of the FMC Rules, read in conjunction with s.79 of the FM Act and s.570 of the FW Act, to make an order for costs, notwithstanding the filing of a notice of discontinuance. In this matter, the ability to make an order for costs is subject to the criteria in s.570(2)(a) and (b) of the FW Act. Thus while the matter can proceed with respect to costs, that conclusion still does not answer the question as to whether or not the respondents in this matter can inspect the documents produced pursuant to the Subpoenas.
Can the subpoenaed documents be inspected?
On the hearing of a costs application, unless there is some specific exclusion with respect to the FMC Rules, the rules and procedure which apply must be those which ordinarily apply to a costs hearing in this Court. However, in respect of FW Act proceedings that is qualified by the fact that relevant material in the hearing must relate to the basis for the application for costs, in this case s.570(2)(a) and (b) of the FW Act, and not go to the merits of the substantive matter per se.[78] Rather, the Court will have to determine whether:
a)the proceedings were instituted vexatiously or without reasonable cause; or
b)there was an unreasonable act or omission which resulted in the incurring of costs.
Those are essentially factual questions which ordinarily in a costs hearing might be determinable on the basis of materials either to be filed, already filed, or already subpoenaed and in the possession of the Court. There may be some difficulty in distinguishing between matters relevant to costs, particularly for the purposes of s.570(2) of the FW Act, and those relevant to the merits of the substantive matter, but that is an issue for the Court at any costs hearing.
[78] Aust-Home Investments at 201 per Hill J; J T Stratford at 1554 per Lord Denning MR and 1554 per Winn LJ.
By way of example it might be that certain documents having been subpoenaed, and their contents being known to the applicant, that the applicant seeks to discontinue before those documents can be inspected, because they are known to be detrimental both in the substantive matter, and in relation to any application for costs under s.570 of the FW Act. One example might be an action alleging contravention of the right under s.352 of the FW Act not to be dismissed because of a temporary absence from work because of illness or injury. It is not to suggest that anything like this has happened in this matter, but what if a doctor agrees to provide an applicant with a medical certificate which says that an applicant is unfit for work by reason of illness or injury, when in fact the applicant is not ill or injured, and that fact is known to the doctor, and revealed in the applicant’s patient notes kept by the doctor? If those notes had been subpoenaed, and were in the possession of the Court, but had not yet been able to be inspected by a respondent, who had a suspicion that the applicant was not ill or injured on the relevant day or days, could it really be suggested that the notes could not be inspected merely because a notice of discontinuance had been filed? The notes would be arguably relevant to an application for costs on the basis that:
a)the proceedings had been instituted without reasonable cause; or
b)that the applicant’s unreasonable act in relying upon a medical certificate containing information which the applicant knew to be false had caused the other party to incur costs.
To determine if an unreasonable act or omission has occurred it might be necessary for the Court to look to an affidavit which has been read in the proceedings. Why then ought the Court be denied the opportunity to have put in evidence before it a subpoenaed document which either supports what is in the affidavit, or which might contradict what is in the affidavit? Alternatively, a subpoenaed document, if it is admissible in evidence, might independently assist in the establishment of whether or not, for example, a particular act or omission is unreasonable or not.
The most that can however presently be said in this matter is that the subpoenaed documents might go to issues which are relevant to the application for costs.
The Court cannot, therefore, preclude the possibility that the subpoenaed documents may be relevant to issues to be determined under s.570(2)(a) and (b) of the FW Act.
There is nothing to preclude all of the Court’s usual procedures being adopted to determine the issues which remain in contest concerning the subpoenaed documents, and first and in particular, the Objections. Whether the respondents are able to inspect the subpoenaed documents will be a matter to be determined following proper argument on the Objections. The subsequent determination of costs, if the matter proceeds to that issue, will be subject to the criteria and factors outlined in Aust-Home Investments.[79] The form of r.13.02 of the FMC Rules is not one where, like the FC Rules 2011 and the FC Rules, costs are mandated upon the occurrence of certain events. It is clear from the use of “If” in r.13.02(3) of the FMC Rules that the Court may or may not make an order for costs following the filing of a notice of discontinuance.
[79] See para.42 above.
The inspection of the subpoenaed documents can therefore occur utilising the usual powers and processes of this Court with respect to subpoenaed documents, notwithstanding the filing of the Notice of Discontinuance by Ms Hobson. However, before the subpoenaed documents can be inspected, the Court must deal with the Objections. In circumstances where Ms Hobson evidently has the Objections, and where Ms Hobson and the Court are aware that the respondents seek, at least, to inspect the subpoenaed documents, the Court considers it appropriate, pursuant to r.1.06 of the FMC Rules, to dispense forthwith with the requirements under r.15A.13(1)(b) and (c) of the FMC Rules with respect to service and inspection.
Implied incidental power
The Court has express powers under s.570 of the FW Act to order costs in relation to proceedings in this Court exercising jurisdiction under the FW Act. The Court is therefore expressly exercising powers under s.570(1) of the FW Act, together with s.79(2) and (3) of the FM Act, to determine whether or not to award costs in respect of proceedings under the FW Act. The powers to deal with the Objections, and to allow inspection, are likewise express powers. Moreover, they are express powers in relation to a discrete application for costs before the Court.[80] The power being exercised is therefore not one which is an implied incidental power to make orders necessarily incidental to express powers, which is a power the Court possesses.[81] However, alternatively, the Court is of the view that if the power to deal with the Objections and to allow inspection of the subpoenaed documents is not, in the circumstances of this matter, the subject of express powers, then in order to properly determine costs under the express powers in s.570 of the FW Act and s.79(2) and (3) of the FM Act, there are implied incidental powers which allow the Court to deal with the Objections and order inspection of subpoenaed documents.
[80] FMC Rules, r.13.02; order 2 of the Courts orders of 10 March 2011.
[81] Skipworth v Western Australia (No.2) (2008) 218 FLR 16 at 27 per Lucev FM; [2008] FMCA 544 at para.34 per Lucev FM.
Conclusion and orders
The Court has concluded that it has express powers to permit the respondents to inspect the subpoenaed documents, notwithstanding the filing of the Notice of Discontinuance by Ms Hobson. However, before the subpoenaed documents can be inspected, the Court must deal with the Objections. The Court has further concluded that the requirements under r.15A.13(1)(b) and (c) of the FMC Rules may be dispensed with forthwith.
There will be orders listing the Objections for hearing, and for the filing of submissions by both parties for that hearing.
Given the provisions of s.570 of the FW Act costs, if any, will be reserved.
I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 1 June 2012
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