Milas v GM Holden Ltd (No.2)
[2015] FCCA 1506
•4 June 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MILAS v GM HOLDEN LTD (No.2) | [2015] FCCA 1506 |
| Catchwords: INDUSTRIAL LAW – Costs application – where leave refused to file application under the Fair Work Act 2009 (Cth) out of time – whether unreasonable acts or omissions – whether caused respondent to incur costs. |
| Legislation: Fair Work Act 2009 (Cth) ss.570, 570(2)(a)(b) Federal Circuit Court Rules 2001 (Cth) rr.13.03A(2), 13.03B(2), 21.02 |
| Milas v GM Holden Ltd [2015] FCCA 1311 Ryan v Primesafe [2015] FCA 8 |
| Applicant: | MARA MILAS |
| Respondent: | GM HOLDEN LTD (ACN 006 893 232) |
| File Number: | MLG 477 of 2015 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | On the papers |
| Date of Last Submission: | 22 May 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 4 June 2015 |
REPRESENTATION
| Solicitors for the Applicant: | Le Brun Glezakos Lawyers |
| Solicitor for the Respondent: | Ms Anderson (In House Counsel) |
ORDERS
The applicant pay the respondent’s costs in the sum of $3,759 within 14 days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 477 of 2015
| MARA MILAS |
Applicant
And
| GM HOLDEN LTD (ACN 006 893 232) |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons concern an application for costs under the Fair Work Act 2009 (Cth) (“the FW Act”).
On 10 March 2015 Mara Milas (“the applicant”) commenced proceedings in this Court against GM Holden Limited (“the respondent”). The applicant had been employed by the respondent until December 2014 when her employment was terminated as the respondent said her position was redundant.
The applicant commenced proceedings in the Fair Work Commission (“the Commission”) against the respondent. On 6 January 2015 the Commission issued a certificate under s.368 of the FW Act which inter alia noted that the applicant had 14 days to make a general protections court application. In her application filed 10 March 2015 in this Court the applicant sought inter alia leave to bring her proceedings out of time.
For the reasons set out in Milas v GM Holden Ltd [2015] FCCA 1311 on 14 May 2015 that application was refused and directions were made for the filing of any application for costs by the respondent.
Costs application and parties submissions
The respondent filed an application for costs, an affidavit of Frances Anderson and submissions in relation to its application for costs on
22 May 2015. The respondent’s submissions were:
“1.An application pursuant to s.365 of the Fair Work Act 2009 (Cth) (FW Act) was lodged with the Fair Work Commission (FWC) by the Applicant on 17 December 2014 (FWC Application) alleging she was dismissed by the Respondent in contravention of Part 3-1 of the FW Act.
2.On 6 January 2015, Commissioner Johns on behalf of the FWC conducted a conference to deal with the dispute. The conference was unsuccessful at resolving the dispute between the parties.
3.A certificate under s.368 of the FW Act was issued to the Applicant on 6 January 2015.
4.Pursuant to s.370(a)(ii) of the FW Act, the Applicant was required to make her general protection court application in relation to this dispute within 14 days after the day the certificate was issued, i.e. by 20 January 2015, or within such period as the court allows on an application made during or after those 14 days.
5.The Applicant failed to do so and only lodged her application to the Federal Circuit Court of Australia (FCCA) (FCCA Proceedings) on 10 March 2015, ie 49 days late.
6.Having reviewed the Applicant’s FFCA Proceedings and noting the absence of any satisfactory reason to explain the extended delay, the Respondent put the Applicant on notice that it intended to seek costs in this matter. Copies of the Respondent’s emails to the Applicant’s solicitors dated 25 March 2015 and 1 May 2015 are attached marked “GMH1” and “GMH2” respectively.
7.On 14 May 2015, a directions hearing was held at the FCCA before Judge O’Sullivan at which the Applicant sought leave to leave to file her FFCA Proceedings outside of the time limit prescribed by s.370(a)(ii) of the FW Act. The Respondent opposed the Applicant’s application for leave and filed an outline of submissions and relevant case law authority. The Court dismissed the Applicant’s application for an extension of time.
8.The Respondent now seeks costs against the Applicant pursuant to ss.570(2)(a) and/or (b) of the FW Act. The costs the Respondent is seeking are its costs in respect of the FCCA Proceedings, not in the FWC Application.
9.Per Judge Lucev in Maslen v Core Drilling Services Pty Ltd & Anor (No.2) [2015] FCCA 290 (Malsen) at paragraph 130, “costs in a matter before the FWC are not to be claimed in proceedings before this Court (or any other court with jurisdiction to deal with proceedings under the FW Act), and that the costs to be awarded by this Court are the costs of the proceedings in this Court.”
…
Vexatiously or without reasonable cause
12.The Respondent contends that the Applicant instituted the FCCA Proceedings without reasonable cause. Specifically, the Applicant’s extension of time application was without reasonable cause.
13.The FWC Application came to an end on 6 January 2015 with the issuing of a certificate under s.368 of the FW Act. The FCCA Proceedings were commenced on 10 March 2015 when the Applicant filed her Originating Application and Form 2. At this time, the Applicant made an interlocutory application for leave to file the Originating Application and Form 2 out of time.
14.On 25 March 2015, the Respondent emailed the Applicant’s solicitors (“GMH1”). The Respondent advised that it would be opposing the Applicant’s application for leave and that it would seek costs against the Applicant and/or the Applicant’s representative if the Applicant proceeded with her claim. The Respondent highlighted the absence of any satisfactory reason to explain the Applicant’s extended delay in filing the FCCA Proceedings. The Respondent emailed the Applicant’s solicitors again in this regard on 1 May 2015 (“GMH2”) and pointed out that even on the Applicant’s own affidavit, she was in contact with her solicitors during the relevant 14 day period and yet her application was still filed significantly out of time. The Respondent advised that copies of this correspondence would be made available to the Court.
15.When interpreting the expression “without reasonable cause”, Judge Whelan in Ollie & Norwood (No.2) [2015] FCCA 716 at paragraph 51 held:
“A distinction needs to be drawn between the pursuit of an argument which does not succeed and the institution of a proceeding which is misconceived.”
16.The Respondent submits that the Applicant’s application for an extension of time was misconceived and can therefore be regarded as having been instituted “without reasonable cause”. There was no acceptable explanation of the delay which would have made it equitable for the FCCA to grant an extension of time. The Respondent refers to the submissions made in paragraph 12a) of its Outline of Submissions on the Applicant’s Interlocutory Application, ie:
12. The Respondent point out the following:
(a) The Respondent contends that there is no acceptable explanation of the delay which makes it equitable for the FCCA to grant an extension of time in this matter. In this regard the Respondent notes:
(i)In paragraph 13 of the Applicant’s affidavit, the Applicant confirms that on 6 January 2015 “the Commissioner advised me that I had 14 days to lodge and Application to the Federal Circuit Court for a civil remedy order”. The 14 day period was also made clear to the Applicant on the certificate itself. In paragraph 3 of her affidavit, the Applicant confirms that the certificate was issued to her on 6 January 2015;
(ii)In paragraph 15 of the Applicant’s affidavit, the Applicant confirms that she contacted her current lawyers (Le Brun Glezakos Lawyers) on 12 January 2015 – this was well before the 14 day time period was due to lapse;
(iii)In paragraphs 18 – 20 of the Applicant’s affidavit, the Applicant confirms that she had further contact with Le Brun Glezakos Lawyers on 14, 15, 16, 19 and 20 January 2015 – in other words, she had contact with these lawyers on 6 occasions in the 14 day time period leading up to and including 20 January 2015. Notwithstanding this extensive contact, and notwithstanding the Applicant and her lawyers being aware of the relevant 14 day period, no application was lodged within this period but only 49 days thereafter;
(iv)The affidavit, the application and Form 2 were signed on different dates prior to the application being lodged with the FCCA on 10 March 2015 (in some instances, well prior to the lodgement). Specifically:
·The Applicant signed her affidavit on 9 February 2015 – the affidavit therefore provides no explanation whatsoever for the further delay from 9 February 2015 to 10 March 2015;
·The Applicant’s lawyers signed the application on 6 March 2015; and
·The Applicant signed Form 2 on 6 March 2015.
Unreasonable acts or omissions have caused the Respondent to incur costs
17.The unreasonable acts or omissions must be unreasonable acts or omissions in the FCCA Proceedings (Malsen at paragraph 143). The FCCA proceedings were commenced on 10 March 2015 by the filing of an Originating Application and Form 2.
18.The Full Court of the Federal Court of Australia in Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143 (Clarke) at [28], set out the two (2) criteria that must be satisfied before a costs order would be made under s.824 of the WR Act:
“The first criterion is that one party must have engaged in "an unreasonable act or omission". As the reasoning of Tracey J in Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392 and Siopis J in McAleer v The University of Western Australia (No 2) [2007] FCA 247; (2007) 161 IR 151 demonstrates, whether a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case. The second criterion is that the act or omission of one party must have "caused another party to the proceeding to incur costs in connection with the proceeding". Once both criteria are satisfied, then the Court "may" in its discretion order the party which has engaged in the unreasonable act or omission to pay some or all of the costs of the other party.”
19.It is submitted that these criteria continue to be applicable in the context of s.570(2)(b) of the FW Act.
Unreasonable act or omission
20.The Respondent contends that the Applicant engaged in unreasonable acts and/or omissions by:
a. failing to comply with her obligations under s.370(a)(ii) of the FW Act;
b. lodging her Originating Application some 49 days after the relevant 14 day period had expired;
c. applying for an extension of time pursuant to s.370(a)(ii) of the FW Act given there was no acceptable explanation of delay; and/or
d. persisting with her application for an extension of time in spite of the Respondent’s emails of 25 March 2015 (“GMH1”) and 1 May 2015 (“GMH2”).
21.The Respondent again refers to the submissions made in paragraph 12(a) of its Outline of Submissions on the Applicant’s Interlocutory Application in this regard. It is unusual to have such an egregious disregard of the prescribed time limit, particularly when solicitors have already been instructed by the party concerned.
22.Per Tracey J in Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879 at paragraph 36:
“The prosecution of any incompetent or hopeless case can be regarded as "an unreasonable act" within the meaning of s 824(2). Conversely, in my opinion, the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act.”
23.The Respondent contends that the Applicant’s application for an extension of time was hopeless and can therefore be regarded as “an unreasonable act”. There was no acceptable explanation of the delay which would have made it equitable for the FCCA to grant an extension of time.
24.In the case of Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2014] FCCA 1490, the applicant’s application for an extension of time was granted, and the directions hearing was adjourned to 18 February 2015. The parties attended mediation on 11 December 2014. The applicant filed a notice of discontinuance on 2 February 2015. The respondent subsequently filed an application for costs (Henshall v Peter Stevens Motorcycle Retail Group Pty Ltd [2015] FCCA 468 (Henshall)) seeking that the applicant pay its cost on the basis that the applicant engaged in conduct that constituted unreasonable acts or omissions that caused it to incur costs. In dismissing the respondent’s application for costs, Your Honour took into account a number of factors, including:
a. the applicant filed a notice of discontinuance (at para 16);
b. the applicant’s status at the time the substantive application was filed was as an unrepresented litigant (at para 24);
c. the applicant’s delay was caused by his inability to navigate the Court’s e-filing system and was not due to any inaction or fault by the applicant (at para 24); and
d. it wasn’t until the Court (was required to exercise its discretion and) had determined to extend time that the respondent was required to file a response and the matter proceeded to mediation (at para 25).
25.Henshall can be distinguished from the present circumstances in a number of respects, including:
a. In the present matter, the Applicant was represented by a solicitor and had obtained representation well before the 14 day time period was due to lapse. In fact the Applicant had been in contact with her representative on 6 occasions in the 14 day time period leading up to and including 20 January 2015;
b. In the present matter, there was no acceptable explanation of the delay and the FCCA dismissed the Applicant’s application for an extension of time (in Henshall an extension of time was granted); and
c. In the present matter, the Respondent was required to file a response and present argument prior to the FCCA’s determination of the Applicant’s interlocutory application for an extension of time.
26.The Respondent therefore submits that since the present circumstances are wholly different to those in Henshall, this necessitates a different outcome to that in Henshall such that the FCCA should exercise its discretion to make a costs order in favour of the Respondent.
27.The FWC has awarded costs where a party has acted unreasonably in relation to extension of time proceedings (see, eg, Danny Carter v David Bevan (U2003/1101)). Although this decision is not binding on the FCCA, it is certainly persuasive.
Unreasonable act or omission caused Respondent to incur costs
28The Respondent contends that the Applicant’s acts and/or omissions caused the Respondent to incur costs, namely:
a. considering, preparing, filing and serving a Response to the Applicant’s Originating Application, Form 2 and Affidavit (including on the Applicant’s interlocutory application);
b. considering and preparing submissions with respect to the Applicant’s application for an extension of time; and
c. attending the directions hearing on 14 May 2015 and presenting submissions with respect to the Applicant’s application for an extension of time.
29.The Respondent’s bill of costs (in accordance with Schedule 1 Part 1 of the Federal Circuit Court Rules 2001 (Cth)) is attached marked “GMH3”.
Conclusion
30.The Respondent submits that the FCCA should exercise its discretion pursuant to ss.570(2)(a) and/or (b) of the FW Act and order the Applicant to pay costs incurred by the Respondent in the FCCA Proceedings.”
The directions for the filing of the application for costs made on
14 May 2015 required any application to be filed and served within
7 days.
On 22 May 2015 and when the applicant was represented the parties agreed to an adjustment to that timetable and an extension to the time for the applicant to file any response to the application for costs, any evidence and submissions to 1 June 2015.
However on that day the applicant’s solicitors filed a notice of intention to withdraw.[1] There was no response to the application for costs from the applicant. There were no submissions filed by the applicant or proper application or request made for further time to do so.
[1] There has been no notice of ceasing to act or withdrawal or new notice of address for service filed.
Given the above course of events and whilst the respondent had until 3 June 2015 to file anything in reply it was not surprising nothing further was forthcoming. As the applicant has had every opportunity to answer the application for costs (and in the absence of any other reason not to do so) it is appropriate given this and Rules 13.03A(2)(a),(b)(iii)(vii) and 13.03B(2)(d) of the Federal Circuit Court Rules2001 (“the Rules”) to proceed to deal with the application for costs on the material before the Court.
Relevant provisions
The respondent’s application for costs falls to be determined by reference to the provisions of s.570 of the FW Act which provides:
“(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
(2)The party may be ordered to pay the costs only if:
(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or…”
In Ryan v Primesafe [2015] FCA 8, Mortimer J dealt with an application for costs arising from proceedings under the FW Act. In relation to the provisions in s.570 of the FW Act generally His Honour noted:
“64.I accept the general import of the authorities relied on by the applicant and Mr McDonald in their written submissions about the significance of the threshold set by s570(2) of the Fair Work Act. Although some of the authorities relied on dealt with the predecessor provisions to s570, there is no difference in substance in the way the threshold is expressed. The discretion conferred by the confined terms of
s570(2)should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395at [6] per Bromberg J. The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the Fair Work Act, or the defence of such claims. The policy behind
s570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. Insofar as it operates to the benefit of respondents, it is designed to ensure respondents feel free to pursue arguable legal and factual responses to the claims made against them. There is an almost identical provision in s611 of the Fair Work Act, giving the Fair Work Commission a similar costs power, conditioned by similarly-worded considerations. The predecessor provisions, and the conscious broadening of the statutory terms used in s570, are traced by the Full Court in Australasian Meat Industry Employees’ Union v Fair Work Australia (No 2) (2012) 203 FCR 430; [2012] FCAFC 103 at [3]- [4] per Jessup and Tracey JJ.65.None of those propositions deny the Court’s ability to find that one or both of the two preconditions expressed in
ss570(2)(a) and (b) exist where the factual circumstances warrant it. The legislative policy behind a provision such as s570(1) is not inconsistent with the requirements for proceedings to be conducted reasonably, fairly and efficiently. As an access to justice provision, it contemplates parties and their legal representatives will access the Court responsibly.”
The effect of s.570 is to limit the Court’s power in relation to any order for costs in respect of proceedings under the FW Act. As a result the Court may only order a party to such proceedings to pay the costs of another party only if the Court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or that the party’s unreasonable act or omission caused the other party to incur costs.
The provisions of ss.569 and 569A of the FW Act are not relevant for this application.
Consideration
The respondent claims costs under s.570(2)(a) and, in the alternative, under s.570(2)(b) of the Fair Work Act 2009.
In relation to the claim under s.570(2)(a) of the Act, the respondent said that the proceedings were issued without reasonable cause.
The respondent in submissions referred to the decision of Whelan J in Ollie v Norwood (No.2) [2015] FCCA 716 on the issue of without reasonable cause. However that decision was in relation to proceedings under the Family Law Act1975 (Cth). The relevant test for the purposes of these proceedings was explained by Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 57; [1992] FCA 539 at [29] as follows:“whether, upon the facts apparent to the applicant at the time of instituting proceedings, there was no substantial prospect of success.”
Wilcox J went on to explain in the same paragraph that:
“If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being “without reasonable cause”. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
Whilst the applicant was seeking leave of the Court to file the application out of time and that required the Court to determine whether to exercise its discretion to allow her to do so (and she wasn’t successful) I do not consider (as she was represented) that, on the facts apparent to the applicant at the time that she instituted the proceedings, she had no substantial prospect of success.
The other basis for an award of costs against the applicant under s.570(2)(b) of the FW Act that is alleged by the respondent is unreasonable acts or omissions by the applicant that caused it to incur costs. The respondent relies on the affidavit of Ms Anderson in support of that application.
Whilst pursuant to s.570(2)(b) of the FW Act the Court may order a party to pay costs if the Court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs such an order is discretionary and only if the Court is satisfied that is the case.
In Rentuza v Westside Auto Wholesale [2009] FMCA 1022 (“Rentuza”) Lucev FM (as His Honour then was) considered the issue of whether an unreasonable act or omission had caused a party to incur costs for the purposes of s.570(2)(b) of the FW Act.
At paragraphs [26] to [28] in Rentuza His Honour said:
“26.For the purposes of s.570(2)(b) two criteria must be fulfilled. They are:
(a) that a party must have engaged in an unreasonable act or omission; and
(b) that the unreasonable act or omission must have caused another party to incur costs in connection with the proceeding.
27.Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case.
28.The exercise of the discretion in s.570(2)(b) is not necessarily engaged because:
(a) a party does not conduct litigation efficiently;
(b) a concession is made late;
(c) a party may have acted in a different or timelier fashion;
(d) a party has adopted a genuine but misguided approach.” [Footnotes from original omitted]
For the purposes of s.570(2)(b) of the FW Act, the Court must be satisfied that two criteria have been fulfilled, as set out in Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 (“Clarke”) they are:
“(a)that a party must have engaged in an unreasonable act or omission; and
(b)that the unreasonable act or omission must have caused another party to incur costs in connection with the proceedings.”
Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case (see Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879).
The provisions on which the respondent relies to ground its application for costs are one of the exceptions to the general rule that in proceedings under the FW Act each party bears its own costs. Moreover as the decision in Clarke (supra) makes clear the Court still retains a discretion on the question of costs.[2]
[2] See Clarke at [29].
In the circumstances, on the evidence before the Court and having regard to the findings in Milas v GM Holden Ltd [2015] FCCA 1311 and the respondent’s submissions at paragraphs [20] to [28] I am satisfied the applicant (bearing in mind she was represented) engaged in unreasonable acts or omissions [3] which caused the respondent to incur costs.[4]
[3] see matters particularised at paragraph 20 of the respondent’s submissions
[4] see matters set out at paragraph 28 of respondent’s submissions
Conclusion
Given the conclusion reached above the issue of what costs order should be made arises. In Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No.3) [2010] FMCA 250 (Pierson’s) Federal Magistrate Lucev, as His Honour then was, said:
“...that it is well established and well known that the primary source used for fixing costs in general federal law proceedings (other than, arguably, in bankruptcy) in this Court is the event-based scale in Schedule 1 of the FMCA Rules. Whilst there is discretion to depart from the event-based scale, that is the exception rather than the norm. The event-based scale under Schedule 1 of the FMCA Rules exists to provide simplicity and certainty in determining costs…”
It is open to the Court to set the amount of the costs under Rule 21.02(2)(a) as well as to set a time for the payment of costs.[5]
[5] see rule 21.02(2)(a) of the Federal Circuit Court Rules 2001
In the particular circumstances of this matter[6] a measure of estimation is required having regard to the nature of the proceedings, the operation of s.570 of the FW Act, and that the matter is not such as to warrant the Court exercising its discretion to make an order that the applicant pay the respondent’s actual costs or even a percentage of them.
[6] The respondent was represented by in house solicitor at just one court event and where a claim for disbursements is not appropriate
Therefore, within 14 days the applicant should pay the respondent’s costs calculated as follows:
Stage 1 Initiating or opposing an application up to the completion of the first court date
$2,735.00
Half Day-hearing fee
$1,024.00
Total
$3,759.00
Accordingly there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Associate:
Date: 4 June 2015
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