Mondal v Transclean Facilities Pty Ltd and Anor (No.3)

[2020] FCCA 3348

FEDERAL CIRCUIT COURT OF AUSTRALIA

MONDAL v TRANSCLEAN FACILITIES PTY LTD & ANOR (No.3) [2020] FCCA 3348

Catchwords:
INDUSTRIAL LAW – Costs application – application in a case dismissed – whether instituted vexatiously or without reasonable cause – whether unreasonable act or omission – whether caused the respondents to incur costs – whether costs order should be made.

Legislation:

Fair Work Act 2009 (Cth), s. 570

Federal Circuit Court of Australia Act , ss.3, 42, 79

Federal Circuit Court Rules 2001 (Cth), Part 21

Cases cited:

Mondal v Transclean Facilities Pty Ltd & Anor [2020] FCCA 1334

Mondal v Transclean Facilities Pty Ltd & Anor (No. 2) [2020] FCCA 2944

Ryan v Primesafe [2015] FCA 8

Tsilibakis v Transfield Services (Australia) Pty Ltd (No. 2) [2015] FCA 1048

Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166http://

Construction, Forestry, Mining and Energy Union v Corinthian Industries (Aust) Pty Ltd (No 2)[2014] FCA 351
Ashby v Slipper (No 2) [2014] FCAFC 67
Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143

Kanan v Australian Postal and Telecommunications Union [1992] FCA 539

Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879
Colgate Palmolive Company & Anor v Cussons Pty Ltd [1993] 46 FCR 225

Applicant: SUBRATA MONDAL

First Respondent: TRANSCLEAN FACILITIES PTY LTD

Second Respondent: SHAYAN DATTA

File Number: MLG 744 of 2019

Judgment of: Judge O'Sullivan

Hearing date: On the papers

Date of Last Submission: 12 November 2020

Delivered at: Dandenong

Delivered on: 10 December 2020

REPRESENTATION

Solicitors for the Applicant: Self-represented

Solicitors for the First Respondent: Stephen Peter Byrne

Solicitors for the Second Respondent: Neesham White Gentle

ORDERS

1. There be no orders as to costs.

2. The applications in a case filed on 6 November 2020 by the first and second respondents be otherwise dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 744 of 2019

SUBRATA MONDAL

Applicant

And

TRANSCLEAN FACILITIES PTY LTD

First Respondent

SHAYAN DATTA

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. These reasons concern an application for costs by the respondents in the substantive proceedings.  Those applications were made following the dismissal of an interlocutory application made by the applicant for the reasons set out in Mondal v Transclean Facilities Pty Ltd & Anor (No. 2) [2020] FCCA 2944 (“Mondal (No.2)”).

2. The background to the substantive proceedings appears in an earlier interlocutory judgment published as Mondal v Transclean Facilities Pty Ltd & Anor [2020] FCCA 1334 at paragraphs [6] to [35] and for the sake of brevity it will not be repeated.

3. In the interlocutory application filed on 2 July 2020 the applicant applied for leave to join six additional parties to the proceedings. This application was dismissed for the reasons set out in Mondal (No 2) which should be read in conjunction with these reasons. Following the dismissal of the interlocutory application for reasons set out in Mondal (No. 2) there were orders made as follows:

   “…

   (2)Any application for costs (along with written submissions of no more than 3 pages) be filed and served within 7 days and any response thereto (along with written submissions of no more than 3 pages) be filed and served 7 days thereafter.

   (3)Time be extended for a further 21 days from today’s date for the applicant to comply with order (2) of the orders made on 28 May 2020 (to file and serve an amended statement of claim which must be certified by Counsel).

   …

   AND THE COURT NOTES THAT:

   A.Any application for costs made pursuant to order (2) of these orders will be considered on the papers unless requested otherwise in submissions”

Applications for and submissions on costs by the respondents

First respondent

1. As contemplated in the above orders, the first respondent filed an application in a case on 6 November 2020 which sought the following orders:

   “1.Pursuant to rules 21.02(1) & (2), and 21.10(a), the applicant pay the first respondent’s costs:

   (a)wasted, in the sum of: $9,625.50, being the costs incurred pursuant to orders made:

15 November 2019:   Item 2 – a)	$3,744.00
b)	$1,680.00	½ day (incl. advocacy loading)
30 October 2020:  Item 2 – a)	$3,744.00
b)	$457.50	short mention (incl. advocacy loading)

(b)as well as the cost of this application, in the sum of: $1,457.50, being:

Filing fee (item 204): $ 1,000.00

Costs: $457.50short mention (incl. loading for counsel’s subs.)

(c)If the first respondent’s costs are not paid within 60 days of the making of these orders, the proceeding be dismissed.”

1. The first respondent also filed written submissions which were as follows:

   “1.The first respondent, Transclean, seeks the costs of the joinder application on the grounds the Applicant made such application vexatiously and or without reasonable cause, and alternately that it should have been reasonably apparent to the applicant that he had no reasonable prospect of success.

   2.The litigation history of this matter was set out in the Court’s reasons of 28 May 2020.

   3.S.611 of the Fair Work Act 2009 (“FWA”) states as to costs that parties shall bear their own. The Court has a discretion to order costs if:

   (a)the FWC is satisfied that the first person made 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… had no reasonable prospect of success.

   4.Transclean submits that both limbs of s.611(2) are satisfied by the circumstances of the conduct of the applicant in the “litigation history”. There is also a consideration as to whether the costs orders should be made against Mr Rangi pursuant to S.376 of the FWA which provides:

   (2)The FWC may make an order for costs against the representative for costs incurred by the other party to the dispute if the FWC is satisfied that the representative caused those costs to be incurred because:

   (a)     the representative encouraged the person to start, continue or respond to the dispute and it should have been reasonably apparent that the person had no reasonable prospect of success in the dispute; or

   (b)    of an unreasonable act or omission of the representative in connection with the conduct or continuation of the dispute.

   Reasonable prospect of success

   5.As to the joinder application, the applicant by his own submissions indicates that he was aware of the necessity of joining the additional parties some time ago and chose to do so belatedly one year after the commencement of the proceeding. It is questionable whether the limitations period allows the claim to be brought against them at this late stage. The limitation period is not extended for the benefit of the applicant as against the new respondents simply by fact of the proceeding having been started much earlier. The claim against them, in other words, is made at the point of the joinder and time is counted back from that date.

   6.The Court has to consider whether the claims against the new respondents are able to proceed in circumstances where the events complained off date as far back (on the pleadings, to 2011). Assuming the application had been successful, the claim could only be made against the new respondents from six years prior to the date of the most recent ruling, 30 October 2020.

   7.In the 30 October reasons the Court refers to the consideration of whether there is a “sufficiently arguable case to justify a joinder”:[30]. The difficulties created by different respondents being subject to different limitation period cut-offs are not yet tackled in the proposed pleading. Transclean submits Mr Rangi should have considered these difficulties before pleading on the basis of the joinder of six new people.

   8.By the late joinder the applicant has rendered a number of the earlier interlocutory hearings pointless or wasted because the true proceeding is only able to be canvassed from the point when the pleadings are settled. In other words, all attempts at case management and steps therein have been at best sub-optimal. The proceeding is now in a kind of no man’s land.

   9.Otherwise, Transclean submits the grounds for the rejection of the joinder application by the Court have the necessary gravity to satisfy the reasonableness requirement.  Namely (in short- form) delay [46], absence of necessary explanation for delay [33 – 36] reversion back to solicitor pleadings [48], absence of necessity for joinder [41], continued and radical increase in deficiency in the pleadings [36], including non-compliance with the rules [52], and prejudice to the existing respondents.

   10.Transclean submits most of the matters set out above can also be characterised as “omissions” for the purposes of s.376(2)(b), but that adds to weight, not to the argument. There is arguably the additional limb that the lack of reasonable prospect of success must have been reasonably apparent.

   11.Mr Rangi is clearly the sole author of the difficulties in this proceeding. He has had the benefit of counsel and the direction of the Court but must be presumed to know the law as an Australian Practitioner. He has been warned about the efficacy of his pleadings. Transclean submits the failures constituted by the grounds set out at [9] herein were made without reasonable cause. They are not failures arising from a question of law decided against him. They are failures from a casual approach to compliance with orders and efficient litigation. The failures should have been apparent to him before hand.

   12.The prejudice to Transclean is very serious. Defending proceedings requires significant effort normally directed elsewhere and significant cost. The applicant seeks penalties against Transclean. A costs order for the failed joinder application does not penalize the applicant for the all the other prejudice and costs from the chain of wasted interlocutory steps. It is a limited costs order and Transclean submits well within the exercise of a reasonable discretion. Such an order also serves the important purpose of imposing discipline on Mr Rangi in the further conduct of this proceeding. Such discipline is needed urgently.”

Second respondent

1. On the same day, the second respondent also filed an application in a case seeking costs as follows:

   “1.Pursuant to rules 21.02(1) & (2), and 21.10(a), the applicant pay the second respondent’s costs:

   a.  Wasted, in sum of $57,753.00 being the costs incurred pursuant to orders made:

11 May 2020:	Item 2 – a)$3,744.00              b) $457.50 short mention (incl. advocacy loading)
28 May 2020:	Item 2 – a)$3,744.00              b)$457.50 short mention (incl. advocacy loading)
30 June 2020:	Item 2 – a)$3,744.00              b) $457.50 short mention (incl. advocacy loading)
28 August 2020:	Item 2 – a)$3,744.00              b) $457.50 short mention (incl. advocacy loading)
30 October 2020:	Item 2 – a)$3,744.00              b) $457.50 short mention (incl. advocacy loading)
6 November 2020:	Item 2 – a)$3,744.00              b) $457.50 short mention (incl. advocacy loading)

b.  As the costs of this application, in the sum of: $862.50 being:

Filing fee (item 204): $405.00

Costs: $457.50 short mention (incl. loading for counsel’s subs.)

c.  If the second respondent’s costs are not paid within 60 days of the making of these orders, the proceeding be dismissed.

1. The second respondent also filed what purported to be written submissions. In reality, they were nothing more than a recitation of the procedural history in the substantive proceedings to date and a schedule of the costs claimed.  For those reasons it is not necessary to rehearse that detail however it has been taken into account.

Applicant

1. Following the making of the orders in Mondal (No. 2), the applicant’s solicitor filed a Notice of Withdrawal.  Nonetheless, on 12 November 2020, the applicant filed his outline of submissions in reply seeking, inter alia, that the Court dismiss the applications in a case filed by the respondents and that there be no order as to costs. In the alternative, the applicant’s submissions were that costs be awarded on a party/party basis and be reserved pending the outcome of the substantive proceedings.  The written submissions were as follows:

   “1.The Honourable Court dismissed the Application in a case filed by the Applicant for joinder (Joinder Application) of the additional parties and permitted the parties to file submission regarding costs for that application.

   2.In addition to filing submissions, both the Respondents filed applications in a case and claims cost for those proposed applications from the Applicant. As the stated applications will be heard on 12 March 2021, the Applicant will file a response in due course and will seek their dismissal.

   3.The submissions filed on behalf of the Second Respondent claiming costs speaks for themselves, the First Respondent has also inflated the figures by referring to wrong item numbers and claiming cost which goes beyond the joinder application.

   4.The usual rule to the costs order in respect of the ‘proceedings’ under Fair Work Act 2009 (FW Act) is found in section 570. Section 570(1) constrains the making of a cost Order, however, section 570(2) carves out an exception to the usual rule to s 570(1) that costs orders are not to be made in respect of proceedings in a matter arising under FW Act.

   5.The Respondents failed to identify the subclauses of section 570(2) on which they rely. Subsections 570(2)(a) is not applicable as the Court has not held that the ‘proceedings’ are instituted without reasonable cause as the ‘proceedings’ remain on foot. Subsection 570(2)(c) is also not applicable as no FWC proceedings were ever initiated. The Applicant tries to address the remaining criteria of subsection 570(2)(b), that the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs.

   6.As stated at paragraphs 10 to 12 of the submissions of the Applicant filed on 30 September 2020, the success of the joinder application was dependent on the satisfaction and discretion of the honourable court in assessing the role of the proposed parties in resolution of the dispute. If satisfied, the court had power and could have allowed the new parties to be joined at any stage of the proceedings. The applicant submits that he could not foresee the use of discretion by the court.

   7.The Applicant was also relying on section 50(1) of the Federal Circuit Court of Australia Act 1999 in believing that he does not have to strictly comply with rules of pleadings.

   8.The question to be determined is whether the conduct of filing of the joinder application was ‘unreasonable’? When considering s824(2) of the Workplace Relations Act 1996 (Cth), which was relevantly analogous to s570(2) of the FW Act, the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143 at [29]adopting Australian and International Pilots Association 162 FCR at 402; Standish v University of Tasmania (1989) 28 IR 129 held that “simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion in s 824(2) of the WR Act to make a costs order. In our view, neither the late abandonment of some of its defence, nor the use of a notice of contention to advance a previously minor and ultimately unsuccessful argument, crosses the threshold of being “an unreasonable act or omission” for the purposes of s 824(2).” The Applicant submits that in light of the above authority, dismissal of an application whose outcome was dependent upon discretion of the court, does not crosses the threshold of being unreasonable.

   9.Dealing with ‘unreasonableness’ under s 824(2) where the pleadings failed to show reasonable prospect of success despite amendments after three attempts and the respondents being successful in getting the pleadings struck out, Tracey J in Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 392 at [32] held: “a pleading which discloses no reasonable cause of action may be struck-out. It does not, necessarily, follow that the party whose pleading has been struck-out acted unreasonably by seeking to rely on the deficient pleading” The Applicant submits that by filing the application, he tried to address the concerns raised by the Respondents and unable to satisfy the court on the issue does not make the conduct unreasonable.

   10.Explaining the significance of discretion under s 570(2) in terms of ‘access of justice provision’, Justice Moritimer at [65] in Ryan v Primesafe [2015] FCA 8, adopting various authorities held “the discretion conferred by the confined terms of s570(2) 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 reasons 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.”

   11.The Full Court in Ashby v Slipper (No.2) [2014] FCAFC 67; (2014) 314 ALR 84 further explained the significance of application of section 570 in terms of protecting a party from liability of costs, and held at [35] that “section 570 of the FWA ‘reflects a policy of protecting a party instituting proceedings from liability for costs’ and ‘costs will rarely be awarded under the section and exceptional circumstances are required to justify the making of such an order’: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]. Whilst Kangan was decided before the introduction of the FWA and concerns the former s 347(1) of the Workplace Relations Act 1996 (Cth) (WRA), s 347(1) of the WRA was similar in terms to s 570(2)(a) of the FWA. Moreover ‘[a] party cannot be said to have commenced a proceeding ‘without reasonable cause’...simply because his argument proves unsuccessful’, and costs will not be awarded against a party whose unsuccessful argument was ‘not unworthy of consideration’: R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473.

   12.The Applicant submits that if the circumstances of his case are seen in light of ‘access to justice provisions’ advocated by authorities quoted hereinabove, his actions or omission should not be categorised unreasonable and his joinder application should not be categorised as ‘without reasonable cause’. Alternatively, if the honourable Court is to find that section 570(2), applies to the circumstances, the court still retains the discretion to refrain from exercising the jurisdiction in appropriate case: see Australian Workers Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23; 232 FCR 428 .The applicant seeks that the Court use its discretion to not to order cost in this case.

   13.Alternatively, if the court despite exercising caution advocated by the case law discussed hereinabove, is to find that conduct of Applicant crossed the threshold set by section 570(2) and does not find it a fit case to use its discretion stated at paragraph 11 above, then, the costs of joinder application be ordered on party and party basis and be reserved till the finalisation of the proceedings.”

1. As it was flagged in the orders made for the reasons in Mondal (No. 2), on 19 November 2020, the parties were told by email that unless they advised otherwise by 9:00am on 24 November 2020, the applications for costs would be determined on the papers.  As there was no indication otherwise, the costs applications have been considered on the papers.

Relevant provisions

1. Contrary to the impression created by the first respondent’s written submissions the costs applications made by the respondents actually fall 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 s.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…”

2. 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 it was said:

   “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.”

3. In Tsilibakis v Transfield Services (Australia) Pty Ltd (No. 2) [2015] FCA 1048 White J said of the relevant provisions under the FW Act that:

   “…

   [7]It is not necessary to canvass in detail the authorities bearing upon the application of s 570. The relevant principles are well established. Section 570 and its predecessors are to be understood as reflecting a legislative policy of protecting parties to proceedings under the Act from orders for costs so that parties with a genuine grievance will not be discouraged from pursuing a remedy to which they may be entitled, or from pursuing litigation in the manner which they deem best, for fear of an adverse costs order: Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143, (2008) 170 FCR 574 at [29]; Ashby v Slipper (No 2) [2014] FCAFC 67, (2014) 314 ALR 84 at [35]. The occasions upon which costs will be awarded under s 570 are likely to be exceptional: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199; (2006) 156 FCR 275 at [60].]...”.

4. The effect of s.570 of the FW Act 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.[1]

   [1] see also recent Full Court decision in Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194 at [99] to [107] on background to those provisions.

5. No order for costs can be made unless it is demonstrated one or more of the abovementioned exceptions in s.570(2) of the FW Act has been established. Even then, the award of costs remains within the discretion of the Court.

Consideration of claim/s for costs

1. The orders made for the reasons set out on Mondal (No.2) were to deal with the disposition of the interlocutory application filed by the applicant.  Those orders did not determine the substantive proceedings.  It is therefore puzzling and unexplained how solicitors for either of the respondents could think it was appropriate to make a claim for costs other than those referrable to the application in a case that was dismissed for the reasons in Mondal (No. 2).  There is certainly no basis to do so and I reject any submission otherwise.

2. The respondents (despite their submissions also being deficient insofar as they refer to the wrong section of the FW Act) refer to and seek costs incurred going beyond the dismissal of the interlocutory application in Mondal (No.2) and the orders made on 30 November 2020. They claim costs under s.570(2)(a) and, in the alternative, under s.570(2)(b) of the FW Act.

3. Either of the provisions on which the respondents rely to ground their respective 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 Construction Forestry Mining and Clarke [2008] FCAFC 143 (Clarke) makes clear the Court still retains a discretion on the question of costs.[2]

   [2] see Clarke at paragraph [29].

4. In relation to the claim under s.570(2)(a) of the FW Act, the respondents said that the proceedings were issued without reasonable cause or had no reasonable prospect of success.

5. The relevant test for the purposes of these proceedings was explained by Wilcox J in Kanan v Australian Postal and Telecommunications Union [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.”

6. His Honour 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.”

7. The particular requirements of s.570(2)(a) were the subject of a Full Court decision in Baker v Patrick Projects Pty Ltd (No 2)[2014] FCAFC 166.  In that case, the Full Court considered the phrase “without reasonable cause” and, at paragraph [9], endorsed the following summary of authorities relating to the meaning and application of this phrase by Pagone J in Construction, Forestry, Mining and Energy Union v Corinthian Industries (Aust) Pty Ltd (No 2)[2014] FCA 351 at [8]:

   “...To exercise the discretion conferred by s.570(2)(a) of the FW Act the Court must be satisfied that the claims were, relevantly, instituted without reasonable cause. That is not established merely because a party fails in the claims: R v Moore; Ex parte Federated Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473; [1978] HCA 51.”

8. In Kanan v Australian Postal and Telecommunications Union [1992] FCA 539 Wilcox J indicated at paragraph [264] that one way of testing whether a proceeding was instituted “without reasonable cause” was to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no “substantial prospect of success”. His Honour went on to say that a proceeding lacks a reasonable cause where it is clear that it must fail on the applicant’s own version of the facts.

9. It is worth also noting that courts have accepted that cost orders made pursuant to s.570(2)(a) of the FW Act and which relate to proceedings instituted “without reasonable cause” are not restricted to exceptional cases. Although an award for costs under s.570 will generally be ‘an exceptional order’ in that it is a divergence from the usual course, it is now accepted that there is no need to demonstrate exceptional circumstances in order to enliven the Court’s jurisdiction to award costs: (see Spotless Services Australia Ltd v Marsh [2004] FCAFC 155 at [12] affirmed in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2)[2015] FCAFC 97 at [15]–[17]).

10. The applicant in his written submissions at paragraph [5] submits that the s.570(2)(a) is not applicable as the Court has not held that the ‘proceedings’ were instituted without reasonable cause as the ‘proceedings’ currently remain on foot. The applicant also contended the application in a case (dealt with in Mondal (No. 2)) couldn’t be described as being without reasonable cause.

11. I have already referred to the respondents’ respective submissions for an order for costs on this basis.  Given the approach in the authorities set out above, and the reasons in Mondal (No. 2), I am unable to conclude there should be an order for costs arising from the decision in Mondal (No. 2) on this basis (see Ashby v Slipper (No.2) [2014] FCAFC 67 at [35]).

12. The other basis upon which it was sought by the respondents that there be an award of costs against the applicant was under s.570(2)(b) of the FW Act that unreasonable acts or omissions by the applicant caused the respondents to incur costs.

13. 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.”

14. 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).

15. The applicant at paragraph [6] of his submissions contends that the success of the joinder application (dealt with in Mondal (No. 2)) was dependant on the satisfaction of the Court as to the role of the proposed respondents in the proceedings. The applicant, at paragraph [8] of those submissions pointed to the authority in Clarke at paragraph [29] adopting the decision in Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879 and Standish v University of Tasmania (1989) 28 IR 129 where it was held:

    “…simply because a party does not conducts its litigation in the most efficient way does not mean the Court should exercise its discretion in s.824(2) of the WR Act to make a costs order. In our view, neither the late abandonment of some of its defence, nor the issue of a notice of contention to advice a previously minor and ultimately unsuccessful argument, crosses the threshold of being an “unreasonable act or omissions” for the purposes of s.842(2).”

16. Given this, the applicant argued that in light of the above authority, the dismissal of the application in a case filed on 2 July 2020 was dependent upon the Court exercising its discretion and therefore it did not meet the threshold of being “unreasonable”. The applicant further submitted that despite three attempts at filing sufficient pleadings, it does not necessarily follow that his conduct was unreasonable[3] and that his case should be viewed in light of ‘access of justice’ provisions and his actions or omissions should not be categorised as unreasonable.

    [3] see Tracey J at paragraph [32] in Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879

17. Dealing firstly with the second respondent’s application under this ground given the reasons in Mondal (No. 2) there is no basis (given he took no meaningful part in the disposition of that application) to find there was an unreasonable act or omission which caused him to incur costs.  I would in any event decline to exercise my discretion to order otherwise.

18. In the context of the application in a case dismissed for the reasons set out in Mondal (No. 2) the first respondent had hitherto been forthright in its criticisms of the applicant’s (now former) solicitor.  This was continued in its submissions where it was said, “Mr Rangi is clearly the sole author of the difficulties in this proceeding”.

19. Notwithstanding this trenchant criticism there was no application made for the applicant’s (now former) solicitor to pay costs. Moreover as the first respondent’s submissions relied on the wrong section of the FW Act and even if the acts or omissions of the applicant could be characterised as being unreasonable, I am not persuaded that they would justify an order for costs being made against the applicant in all the circumstances.

20. The conduct of this matter by the practitioners involved has, at various times left something to be desired to say the least.[4] This has arguably been compounded by the first respondent’s submissions that were filed under the signature block of Counsel which could not even identify the correct sections of the FW Act grounding the ability of the Court to exercise its discretion to award costs.

    [4] see for e.g. reasons in Mondal v Transclean Facilities Pty Ltd & Anor [2020] FCCA 1334 at paragraph [50] and [67] for issues with the respondents and Mondal v Transclean Facilities Pty Ltd & Anor(No. 2) [2020] FCCA 2944 at paragraph [2] - [5], 23-24, 34-39, 51-53 for the applicant.

21. Therefore, in the circumstances mindful of the exhortation in the authorities[5] and whilst the conduct of the applicant is far from being beyond reproach, I am not satisfied there should be an order for costs and would in any event decline to exercise my discretion to award costs.

    [5] see for example Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574

Conclusion

1. Given the conclusion arrived at above, it is unnecessary to otherwise consider the costs claimed and the basis for doing so though I note they did not satisfy the rule referred to in Colgate Palmolive Company & Anor v Cussons Pty Ltd [1993] 46 FCR 225 included claims for costs in the substantive proceedings (beyond the scope of the orders made on 30 October 2020) and in some respects departed from Part 21 of the Federal Circuit Court Rules 2001 and there is no reason to do so.  However, for the reasons set out above, there will be orders as set out at the beginning of these reasons for decision.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan

Associate:  

Date: 10 December 2020