Mitford Investments (WA) Pty Ltd (Trustee) v Adaszko
[2022] FedCFamC2G 827
Federal Circuit and Family Court of Australia
(DIVISION 2)
Mitford Investments (WA) Pty Ltd (Trustee) v Adaszko [2022] FedCFamC2G 827
File number: PEG 115 of 2022 Judgment of: JUDGE KENDALL Date of judgment: 14 September 2022 Catchwords: INDUSTRIAL LAW – Application for the enforcement of a costs order made by the Fair Work Commission – the applicant also sought its costs incurred in seeking that enforcement – the Court agrees to the enforcement but declines to order additional costs – application allowed in part. Legislation: Fair Work Act 2009 (Cth), ss 402, 539, 545, 566, 570, 611 Cases cited: RNTT Pty Ltd v Obuchowski [2019] FCCA 1376
Ryan v Primesafe [2015] FCA 8
Division: Division 2 General Federal Law Number of paragraphs: 43 Date of hearing: 14 September 2022 Place: Perth Counsel for the Applicant: Mr D Molony Solicitor for the Applicant: Armeli & Molony Lawyers Respondent: In person ORDERS
PEG 115 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MITFORD INVESTMENTS (WA) PTY LTD AS TRUSTEE FOR THE JJG TRUST
Applicant
AND: RICK ADASZKO
Respondent
order made by:
JUDGE KENDALL
DATE OF ORDER:
14 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.The respondent pay the applicant the sum of $39,817.75 within 14 days of the date of this order.
2.There be no order as to costs.
3.Written reasons for judgment be published from Chambers at a later date.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE KENDALL:
Introduction
This matter was listed before the Court for a directions hearing at 2.00pm on 14 September 2022.
At that directions hearing, the Court made the following orders:
1.The respondent pay the applicant the sum of $39,817.75 within 14 days of the date of this order.
2.There be no order as to costs.
3.Written reasons for judgment be published from Chambers at a later date.
These reasons for judgment are those referred to in order 3 above. They explain why the Court made an order effectively “enforcing” an order made by the Fair Work Commission (the “Commission”) and why the Court declined to make a costs order in this matter.
Background
Before the Court was an application filed in the Perth Registry of this Court on 10 June 2022 (the “application”) under the Fair Work Act 2009 (the “Act”). That application sought the following orders:
1.The Federal Circuit Court of Australia hereby orders that Mr Rick Adaszko within seven (7) days of the date of service of this order do pay Mitford Investments (WA) Pty Ltd as trustee for the JJG Trust the amount of $39,817.75 in compliance with the order made by the Fair Work Commission of Australia dated 4 March 2022.
2.Service of this order may be effected on the Respondent by email to the following email, address: [omitted].
The “grounds of application” were outlined as follows:
1.The judgment creditor applicant, Mitford Investments (WA) Pty Ltd as Trustee for the JJG Trust applies for the enforcement orders set out in this application.
2.The enforcement order sought is in respect of the following order of the Fair Work Commission of Australia, Order by Deputy President Beaumont dated 4 March 2022:
In accordance with Section 611 of the Fair Work Act 2009 (Cth) - Application for costs against a party - costs awarded and pursuant to Section 402 of the Fair Work Act 2009 (Cth) whereby the following was ordered:
Mr Rick Adaszko pay Mitford Investments (WA) Pty Ltd as trustee for the JJG Trust (Mitford) the amount of $39,817.75 for legal costs incurred by it in relation to an application for unfair dismissal, an application for permission to appeal made by Mr Adaszko and a costs application made by Mitford, within 28 days of the date of this order [dated 4 March 2022].
Essentially, the applicant sought enforcement of an order made by Deputy President Beaumont of the Commission on 4 March 2022 requiring the respondent to pay the applicant the sum of $39,817.75.
The amount was ordered for payment of legal costs incurred by the applicant in relation to an application for unfair dismissal and an application for permission to appeal made by the respondent and a costs application made by the applicant.
The applicant also filed an affidavit of Damian Eugene Molony (“Mr Molony”) (sworn on 10 June 2022) in support of the application (the “Molony affidavit”). That affidavit annexed a copy of the decision and the costs order made by the Commission and detailed the correspondence sent by the applicant’s representative to the respondent in an attempt to obtain payment of the costs ordered by the Commission.
The matter was listed for a first court date on 27 July 2022 at 10.00am by telephone. Mr Molony appeared for the applicant at that first court date. There was no appearance by or for the respondent.
At that first court date, Mr Molony advised the Court that he had served copies of the application and the Molony affidavit (together, the “documents”) on the respondent on 23 June 2022 at 9.54am by email and that he had a copy of that email “in front of him”. However, at that time, no affidavit of service had been filed. There was thus no evidence before the Court that the documents had been validly served on the respondent.
The Court made orders requiring that the documents (and the orders made) be served on the respondent and that an affidavit of service filed be filed verifying compliance with that requirement. The matter was also listed for a further directions hearing on 8 September 2022 at 10.30am.
Shortly after the first court date (on 27 July 2022), the respondent filed a notice of address for service.
On 2 September 2022, the parties were contacted by my chambers and were asked to provide either agreed consent orders or proposed orders to chambers by no later than 4.00pm on 7 September 2022.
On 7 September 2022 at 3.52pm, my chambers received an email and a minute of proposed orders from Mr Claude Armeli (“Mr Armeli”) on behalf of the applicant. Mr Armeli indicated in his email correspondence that Mr Molony would appear on behalf of the applicant at the telephone directions hearing.
The proposed orders received from Mr Armeli provided as follows:
1.The Federal Circuit Court of Australia hereby enforces the order made by Deputy President Beaumont in the Fair Work Commission of Australia on 4 March 2022, whereby it was ordered that in accordance with Section 611 of the Fair Work Act 2009 (Cth) Mr Rick Adaszko pay Mitford Investments (WA) Pty Ltd as trustee for the JJG Trust, the amount of $39,817.75 within 28 days of the order dated 4 March 2022.
2.Within 7 days of the date of this order, the Respondent pay the Applicant the amount of $39,817.75 in compliance with the order made by the Fair Work Commission of Australia dated 4 March 2022.
3.The Respondent pay the Applicant’s costs relating to these proceedings reference number PEG115/2022, to be taxed if not agreed.
On 7 September 2022 at 4.47pm, my chambers received an email from the respondent which attached his response to the proposed orders above. Essentially, the respondent indicated that the sum sought in the proposed orders was “simply beyond him” and that he was unable to pay the amount owing without being caused “severe financial stress and difficulty”. The respondent offered (in the alternative) to pay $150 per fortnight to the applicant for a period of two years.
Unfortunately, due to judicial availability, the directions hearing listed on 8 September 2022 needed to be vacated and was re-listed at 2.00pm on 14 September 2022 by telephone.
At that directions hearing (on 14 September 2022), Mr Molony appeared by telephone for the applicant. The respondent also appeared by telephone.
In oral submissions, Mr Molony explained that, due to the history of the matter, the length of time that the parties have been involved in dealing with this matter (including before the Commission) and the lack of engagement by the respondent in those proceedings, the applicant was not prepared to enter into any payment arrangement with the respondent.
In relation to the question of why the applicant was entitled to and ought to be awarded costs in this matter (notwithstanding that this is generally a no cost jurisdiction), Mr Molony again seemed to reference the length of time since the making of the costs order by the Commission and the lack of engagement from the respondent.
The respondent, in turn, explained to the Court that he did not have the funds to pay the applicant in full at this time and that doing so would “force him into bankruptcy”. He did not dispute that no payments had been made against the amount ordered by the Commission. He stated that he simply lacked sufficient funds to pay the amount required in full.
Consideration
There were two questions that the Court needed to decide in this matter. Those questions were whether the Court ought to:
(i)enforce the order made by the Commission; and
(ii)make a further costs order in favour of the applicant.
These issues will be addressed in turn below.
Relevant legislative provisions
The Commission’s orders (dated 4 March 2022) were stated as being made pursuant to ss 611 and 402 of the Act and read as follows (footnotes omitted):
S 611 – Application for costs against a party – costs awarded
Further to my decisions in Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth v Rick Adaszko and Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth v Rick Adaszko and pursuant to s 402 of the Fair Work Act 2009 (Cth), I order that:
A.Mr Rick Adaszko pay Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private (Mitford) the amount of $39,817.75 for legal costs incurred by it in relation to an application for unfair dismissal, an application for permission to appeal made by Mr Adaszko and a costs application made by Mitford, within 28 days of the date of this order.
Section 611 of the Act relevantly provides as follows:
611 Costs
(1)A person must bear the person’s own costs in relation to a matter before the FWC.
(2)However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a)the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b)the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780.
(3)A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4‑1).
As outlined above, s 611(3) provides that any person to whom an order for costs applies must not contravene a term of the order. Further, s 611 of the Act is prescribed by s 539 of the Act to be a “civil remedy provision”.
Section 566 of the Act confers jurisdiction on this Court as follows:
566Conferring jurisdiction on the Federal Circuit and Family Court of Australia (Division 2)
Jurisdiction is conferred on the Federal Circuit and Family Court of Australia (Division 2) in relation to any civil matter arising under this Act.
Section 545(1) of the Act provides this Court with a broad remedial power as follows:
545 Orders that can be made by particular courts
Federal Court and Federal Circuit and Family Court of Australia (Division 2)
(1)The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
Note 1: For the court’s power to make pecuniary penalty orders, see section 546.
Note 2: For limitations on orders in relation to costs, see section 570.
Note 3:The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).
Note 4:There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).
Section 570 of the Act sets out the limited circumstances under which costs may be awarded by the Court as follows:
570 Costs only if proceedings instituted vexatiously etc.
(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising 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.
Note:The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 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 the FWC;
(ii)the matter arose from the same facts as the proceedings.
Enforcing the order
While the Court was sympathetic to the financial concerns raised by the respondent, the Court was nonetheless satisfied that an order was made by the Commission on 4 March 2022 and that the Commission had ordered that the respondent to pay the applicant the sum of $39,817.75. That sum was due to be paid within 28 days of the date of the order. That is, the respondent was required to pay the sum of $39,817.75 to the applicant by 1 April 2022 (being 28 days after the date the Commission’s order was made).
The respondent had not paid any amount to the applicant since the date of the Commission’s order. Further, the respondent did not dispute that the amount had not been paid (in full or in part).
In the circumstances, the Court was satisfied that the respondent had contravened the term of the order: s 611(3) of the Act.
In order to enforce the costs order made by the Commission, it is necessary for an order to be made by this Court: RNTT Pty Ltd v Obuchowski [2019] FCCA 1376 (“RNTT”) at [7].
In the circumstances, the Court considered it appropriate to make an order that the respondent pay the applicant the sum of $39,817.75 to the applicant within 14 days.
Awarding further costs
The Court then considered whether it was appropriate to make an additional costs order in favour of the applicant pursuant to s 570(2) of the Act. The basis of the order being that the respondent (a person to whom an order for costs applies) contravened a term of that order (under s 611(3) of the Act) by failing to pay the amount of $39,817.75 to the applicant, as ordered by the Commission.
The Court noted the caution given by Justice Mortimer in Ryan v Primesafe [2015] FCA 8 at [64] about exercising the discretionary power under s 570(2) of the Act as follows:
…The discretion conferred by the confined terms of s 570(2) should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395 at [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 s 570 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 s 611 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 s 570, 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.
The Court was also guided by the decision of Judge Street in RNTT which addressed similar issues. In that decision, Judge Street stated:
5.The applicant submitted that the failure to pay in the circumstance of the present case is one which the Court should regard as engaging the Court’s powers under s 570 of the Act, notwithstanding the general rule that there should be no order for costs in proceedings under the Act.
6.The circumstances of the present case are ones where an employee brought a claim against a respondent unsuccessfully in the Fair Work Commission. The scheme of the Act is to facilitate the pursuit of rights by employees. The principle in respect of no order as to cost should not lightly be departed from. It is not necessary in the circumstance of the present case to determine whether or not the order made under s 400A and s 611 of the Act is an order that would have been made had such issues been raised before this Court. It is relevant to take into account that it was an employee seeking to pursue her employment rights under the Act that gave rise to an exercise of power in the Fair Work Commission making an adverse costs order against her. That is clearly out of the ordinary and is not something that should ordinarily occur as employees are entitled to bring proceedings under the Act without a costs consequence.
7.In order to enforce the costs order made it is necessary for an order to be made by this Court. In that sense all enforcement proceedings are ones that require steps to be taken to permit enforcement where the order has not been complied with. That is not of itself enough to justify the making of a costs order under s 570 of the Act. There should be particular conduct identified to satisfy the requirements of s 570 of the Act.
In RNTT, Judge Street also expressed his disapproval at the request for penalty in certain circumstances and determined that it was not appropriate to a further burden on an employee already the subject of an adverse costs order. Specifically, His Honour stated:
10.The application that was brought before the Court also sought a penalty against the employee under s 546 of the Act for the failure to pay the costs order ordered by the Fair Work Commission on the basis that it constituted a breach of a term under s 611(3) of the Act. The term in that regard was said to be the requirement for payment within 30 days. It is not appropriate for the Court to use penalty powers under s 546 of the Act to add to the burden of costs on an unsuccessful employee except in exceptional circumstances.
11.Further, it is not appropriate to bring enforcement proceedings seeking a penalty in respect of the obtaining of a costs order merely because an employee has not paid the same. The inclusion of the relief for penalty in the proceedings that were instituted by the applicant was not appropriate and should not have occurred.
12.Provisions of the Act, whilst providing significant teeth to ensure compliance with the orders of the Fair Work Commission, are not intended to impose unfair burdens on employees who might be the subject of an adverse costs order. It was not appropriate for the applicant to include in the pursuit of these proceedings a request for a penalty. Indeed, the request for penalty must have had some impact on the respondent in determining to make the payment prior to the return date before the Court today. That is not a permissible reason for these types of proceedings to include such an order for penalty where an employer is pursuing enforcement of a costs order against an employee.
The Court considered that Judge Street’s comments above also apply to the Court making a further costs order by exercising the powers set out in s 570 of the Act. In circumstances where the Commission has already issued an order for legal costs incurred, the Court did not consider that the Act intended to impose a further costs burden on an applicant by the Court issuing a further costs order.
Further, having reviewed the facts of this matter, the Court was not satisfied, on the evidence before it, that the requirements set out in s 570 of the Act had been met. Relevantly:
(b)the applicant did not provide any evidence of any costs incurred by the failure of the respondent to pay the amount ordered by the Commission: s 570(2)(b) of the Act;
(c)the Molony affidavit suggested that, following the making of the Commission order, the applicant’s representative sent only one email only to the respondent, requesting payment of the sum of $39,817.75 (see Annexure DEM-3 of the Molony affidavit): s 570(2)(b) of the Act; and
(d)there was no evidence before the Court to suggest that the respondent refused to participate in the matter before the Commission: s 570(2)(c)(i) of the Act.
There was thus no basis under s 570(2) of the Act to order the payment of any additional costs.
Further, even if s 570(2) of the Act had been enlivened, the Court would have exercised its discretion to refuse to make any further costs order against the applicant in this matter. Contrary to the applicant’s submissions the Court does accept that the respondent did make some effort to engage with the proceedings before the Commission and the respondent now faces considerable financial difficulties.
Conclusion
The Court made orders as outlined at [2] above.
I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kendall. Associate:
Dated: 10 October 2022
4
0