Manchester v Camerons Motorist Services Pty Ltd; Bromfield v Camerons Motorist Services Pty Ltd; Cargill v Camerons Motorist Services Pty Ltd

[2022] NSWDC 592

District Court

New South Wales

Medium Neutral Citation:

Manchester v Camerons Motorist Services Pty Ltd & Anor; Bromfield v Camerons Motorist Services Pty Ltd & Anor; Cargill v Camerons Motorist Services Pty Ltd & Anor [2022] NSWDC 592

Hearing dates:

On the papers

Date of orders:

28 November 2022

Decision date:

28 November 2022

Jurisdiction:

Civil

Before:

Abadee DCJ

Decision:

See paragraph 26

Catchwords:

COSTS – claim for unpaid wages and entitlements under a federal award – successful application to amend pleadings – whether unreasonable conduct by the plaintiffs caused the defendant to incur costs – whether discretion should be exercised to award costs – policy underlying costs orders under FW Act and reconciling that policy with case management objectives in ordinary civil proceedings – significance of costs application for interlocutory procedural applications - Fair Work Act 2009 (Cth), s 570(2)

Legislation Cited:

Civil Procedure Act 2005 (NSW) ss 56-60, 98

Fair Work Act 2009 (NSW) ss 560, 570

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Vehicle, Manufacturing, Repair, Service and Retail Award 2010 (Cth)

Cases Cited:

BDR21 v ABC (No.2) [2021] FCA 1347

Mutch v ISA Management Pty Ltd (No.2) [2020] FCA 954

Saxena v PPF Asset Management Ltd [2011] FCA 395

Tucker v State of Victoria (No.2)[2021] VSCA 182

Category:

Costs

Parties:

L Manchester (plaintiff)
A Bromfield (plaintiff)
G Cargill (plaintiff)
Camerons Motorist Services Pty Ltd (first defendant)
E Cameron (second defendant)

Representation:

Counsel:
O Fagir for the plaintiffs
P Singleton for the defendants

Solicitors:
Campbell Paton & Taylor: Lawyers & Solicitors for the plaintiffs
Blackwell Short Lawyers for the defendants

File Number(s):

2021/00102997
2021/00142672
2021/00155182

Publication restriction:

Nil

REASONS FOR Judgment

Introduction

1. These matters were before me on 18 November 2022 in a week in which I sat as the Civil List Judge. They concerned an application by the three plaintiffs, in each proceeding, to amend their statement of claim.

2. The three proceedings are materially the same, including essentially the same causes of action and facts against a common employer, albeit applicable to the particular positions of the individual plaintiffs. They all concern claims against their employer for underpayment of wages and entitlements provided for under the Vehicle, Manufacturing, Repair, Service and Retail Award 2010 (Cth).

3. This is a relatively rare instance of claims for damages being brought for damages under the Fair Work Act 2009 (NSW) (the ‘FW Act’), which are usually brought in federal courts (s 560). Be that as it may, in the case of Mr Manchester, he commenced a proceeding on 14 April 2021. For Mr Bromfield, he commenced his suit on 31 May 2021 and for Mr Cargill, he commenced his suit on 20 May 2021. The relevant period of employment for all of the plaintiffs was commonly 8 August 2012 to 31 March 2018. The plaintiffs resorted to litigation after the Fair Work Ombudsman conducted and (apparently in September 2020) completed an investigation into the first defendant’s compliance with the award and the Ombudsman found certain contraventions of the Award had occurred.

4. With the agreement of the parties, I chose one of the proposed amended pleadings (Mr Manchester) in one of the proceedings to be representative of the proposed amended pleadings in the other two proceedings.

5. On 18 November 2022, in ex tempore reasons for judgment, I granted leave to the plaintiff to amend in each case, but, as indicated in the reasons, there were some refinements to the pleading that the plaintiff was directed to make, consistently with some objections taken by the defendant. But there were also other objections raised by the defendant which the Court rejected.

6. Once the Court announced that leave to amend was granted, the legal representatives for the parties indicated that there was a dispute about costs of the application. The parties indicated that this was not a case where the Court was invited to exercise a discretion under s 98 of the Civil Procedure Act 2005 (NSW), but rather involved the Court’s consideration as to whether it could and should exercise power to order costs under s 570 of the Fair Work Act 2009 (Cth) (FW Act).

7. With that indication, the Court made directions for the parties to serve short submissions about costs with a view to the issue being determined on the papers. Written submissions were received from the defendant (on 22 November 2022) and the plaintiff in response (on 24 November 2022).

The power to award costs under s 570 and the approach of earlier authorities

8. Section 570(1) of the FW Act generally provides that for disputes about matters arising under the FW Act a party is not subject to an order for costs incurred by another party. There is no dispute that this litigation concerns matters arising under the FW Act. But one exception to the general rule arises (under s 570(2)(b)) where the plaintiff’s unreasonable conduct causes the defendant to incur costs. The questions for the Court now are whether the Court should find that (a) the plaintiff’s unreasonable conduct caused the defendant to incur costs (so as to empower the Court to order costs in the defendant’s favour) and, (b) if so empowered, the Court should exercise its discretion to order costs in the defendant’s favour.

9. The defendant seeks affirmative conclusions to both questions. In my view, the defendant bears the onus of proving both matters.

10. The plaintiffs cited authority on the construction and application of s 570 which posits that the power should not be exercised except in a clear case [1] and where the occasions are truly exceptional [2] . A lack of efficiency and even negligence may not, without more, be indicative of the unreasonableness in the relevant sense[3] . The plaintiffs also argued that the power needs to be exercised with reference to the policy in s 570 of providing access to justice and the overriding case management objectives set out in s 56 of the Civil Procedure Act 2005 (NSW) [4] . I respectfully adopt the principles set out therein.

Parties’ submissions

1. Saxena v PPF Asset Management Ltd [2011] FCA 395 at [5]-[6]

2. Mutch v ISA Management Pty Ltd (No.2) [2020] FCA 954 at [8]; BDR21 v ABC (No.2) (“BDR21”) [2021] FCA 1347 at [26]

3. Tucker v State of Victoria (No.2)[2021] VSCA 182 at [26], [32]

4. BDR21 at [26]

The defendants’ submissions

11. The defendants submitted, in effect, that the only difference between the exercise of the costs discretion in s 98 of the Civil Procedure Act and s 570 of the FW Act is that the latter provision displaces the ‘usual rule’ (in r 42.1 of the Uniform Civil Procedure Rules) that costs should follow the event.

12. The defendant makes no point about the plaintiff’s subjective intentions, or those of their solicitor. The defendant submits that a combination of acts or omissions occurred which, cumulatively, indicated that the plaintiff (in each proceeding) unreasonably caused the defendant to incur costs.

13. As a first (preliminary) point, the defendant noted that the evidence before the Court at the hearing only related to the position of the plaintiff, Mr Manchester. (It was suggested that a Jones v Dunkel inference could be drawn from the absence of evidence relating to the position of Messrs Cargill and Bromfield). The defendant directed the Court to aspects of the evidence of Mr Manwaring to support the amendment application.

14. The defendant argued that Mr Manchester became aware in 2017 of what he contended founded a cause of action. He sought help from the Fair Work Ombudsman and, thereafter, retained this solicitor, Mr Manwaring. But he did not get the result that he wanted from the Ombudsman.

15. Despite his belief that he had a good cause of action, he delayed for four years in preparing for litigation. Then in about September 2020, the plaintiff instructed Mr Manwaring to commence the proceeding, but that was not implemented until December 2020. This was an indication that such preparation for the litigation as occurred was inadequate. Although Mr Manwaring cited ‘mental issues’ afflicting the plaintiff, that was a vague explanation for delay and between September 2020 and December 2020 there was ample opportunity to review the pleading.

16. But the main cause of delay was a defective initial pleading. Mr Manwaring had acknowledged that the earlier iteration was the product of urgency consequent from an earlier period of inadequate preparation and belated decision to retain Counsel only after the defendant had filed its defence. There have since been several adjournments (by consent), which have also caused delay during which the defendant had, in some instances, identified deficiencies in new iterations of the amended pleading. Even at the hearing, following points taken by the defendant, the Court only granted leave on the basis of matters raised by the Court.

17. The defendant acknowledged that amendments are an ordinary incident of litigation and not unreasonable per se. Here, however, the amendments were such as to amount to a virtual re-write, partly the result of prompting from the defendant. The costs of all this have been transferred to the defendant and the test set out in s 570(1) of the FW Act have been satisfied. Accordingly, the defendants should have their costs thrown away, as agreed or assessed.

The plaintiff(s)’ submissions

18. The plaintiff accepts that the original pleading was imperfect and required amendment. Nevertheless, it had to be borne in mind that the nature of the underlying claim was obvious and had been effectively presaged in the report of the Fair Work Ombudsman. The amendments clarified, with greater particularity existing actions, but they were not all that substantial. Although they took time, in a procedural sense, the proceedings were still at a relatively ‘early’ stage of the proceeding – to the point when the amendments were made, both sides had put on their pleadings but the proceedings were no further advanced. Urgency arose through the looming limitation period.

19. The plaintiff noted that the defendants did not cite any prejudice for opposing the amendments, but nonetheless opposed the amendments, about which they prosecuted with vigour and, in multiple cases, failed to persuade the Court. It was, in effect, disingenuous for the defendant to suggest that the problem with the original pleading could be solved simply by the plaintiffs discontinuing and starting again, given the likely applicability of the limitation period. That, the Court should infer, was the real reason for the defendant vigorously contesting the amendment application. Much of the volume of evidence put on by the defendant at the application (the most obvious manifestation of costs incurred by the defendant) was unnecessary to adjudicate on the amendment application. Indeed, ultimately, at the contested hearing on the amendment application, the legal representative for the defendant was content to fight the amendments only on the basis of the pleading and without explicit reliance upon evidence adduced on the application by the defendant. It was not shown that costs had been incurred by reason of unreasonable conduct. It might even be argued that the defendant had incurred costs unreasonably because of its own approach to the amendment application.

20. Further, in what I understood to be submissions addressed to the exercise of discretion (assuming that the condition in s 570(2)(a) was satisfied), the plaintiff submitted that it was inapposite for the defendant to speak of the ‘appropriate resources’ of the plaintiffs, as if they were in a position akin to companies or experienced people and submitted that there was no argument advanced by the defendant that the claims advanced by the plaintiff were untenable. They also invoked the policy consideration alluded to in BR21 that the power to order costs should be exercised with reference to the policy of enabling access to justice and not in a chilling manner that would have the effect of deterring legitimate claims.

Consideration

21. In my view, the Court has to exercise particular care in imposing costs orders under s 570(1) for procedural interlocutory applications. Full force has to be given to the evident general policy against the imposition of costs orders under the provision. Indeed, I consider that a Court to which such application is brought should be especially circumspect about exercising the power to award costs in interlocutory applications than it is at final hearings. I do not consider that Parliament intended that disputes between employers and workers arising under the FW Act should be bogged down with excessive procedural applications. An expansive approach to costs orders at such procedural applications would, in my view, encourage the incidence of such applications in a way which is antithetical to the policy apparent in s 570(1). Although there may be instances where costs might be imposed at an interlocutory level (s 570(2)(a) providing a specific example), I think the predominant object under s 570(2)(b), read with s 570(1), is that it is the costs of the proceeding as a whole, viewed in the light of a final hearing, which illuminates whether it was unreasonable for a plaintiff to have brought, or continued, a proceeding or for the defendant to have opposed it. Hence the reference in s 570(2)(b) to ‘the costs’, rather than ‘costs’ simpliciter.

22. Although parties who institute legal proceedings need to take Courts as they find them, including the procedural rules and obligations that govern proceedings, in this case the Civil Procedure Act 2005 (NSW) and especially ss 56-60, and the Uniform Civil Procedure Rules (UCPR), Part 42, I consider that in proceedings to which the FW Act applies, the Court must be mindful of the policy considerations in s 570 of the FW Act; in a way that might mitigate the rigour courts may apply procedural rules in comparison to other classes of dispute.

23. I consider that there is a certain glibness in the defendant’s criticism about the delay between the events underlying the litigation and its commencement. Although the events occurred a long time ago, weight has to be given to the circumstance that the Fair Work Ombudsman undertook an investigation. It was not unreasonable for the plaintiffs to await the results of that review before filing suit. As Mr Manwaring also explained, it is not unheard of for investigations undertaken by the Fair Work Ombudsman to insufficiently address the circumstances of a particular complainant. Further still, although there was some further delay it is not unreasonable for the plaintiff’s lawyer to be apprehensive about the expiry of the limitation period and file a pleading on the basis of instructions obtained. It is not unexpected that having done so, the plaintiff would move the Court for amendment, especially after the defendant had cited certain deficiencies. There may have been a lack of efficiency in this, and perhaps even an absence of some care, but as the authorities suggest, that is not conclusive in the relevant sense.

24. The defendant did not rely upon delay as a basis of opposition to the amendments. It consented to adjournments. It did not move the Court to have the proceeding dismissed summarily or struck out, for non-compliance with Court directions or for want of due despatch. Doubtless some cost would have been incurred by it in these steps in adjournments and pointing out deficiencies in successive iterations of proposed pleadings, but if the defendant seriously perceived that delay since the commencement of the proceeding was actually prejudicial, it would have moved the Court for some or all of these forms of relief. Instead the defendant has, to all intents and purposes, gone along with the delay that has been a feature of the litigation until the extant motion brought in April this year. The circumstance that the defendant did not move the Court for remedy also suggests that there is force in the plaintiff’s submission that notwithstanding deficiencies in the original iteration of the pleading, the defendant was effectively put on notice, at least in a generalised way, of complaints that the plaintiff makes by reason of the content of the Fair Work Ombudsman’s report. Of course, as was the subject of argument at the hearing, the defendant is not bound by those findings, but as I understand the plaintiffs’ cases, those findings are something of a proxy or at least provide a platform for the cases they wish to run against the defendant. The defendant has been on notice of them for a while now.

25. I find that although there has been delay and cost occasioned to the defendant, I am not persuaded that there has been unreasonable conduct that has caused them to the high and exceptional standard required and, or alternatively, I am not persuaded that the Court should exercise its discretion in s 570(2) to order costs on the motion.

Orders

26. In each of the proceedings, there is no order as to the costs of the plaintiff’s application to amend his statement of claim

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Endnotes

Decision last updated: 28 November 2022