FEDERAL CIRCUIT COURT OF AUSTRALIA
Mondal v Transclean Facilities Pty Ltd (No 5) [2021] FCCA 738
File number(s): MLG 744 of 2019 Judgment of: JUDGE O’SULLIVAN Date of judgment: 16 April 2021 Catchwords: INDUSTRIAL LAW – COSTS Legislation: Fair Work Act 2009 (Cth) s 570 Cases cited: Mondal v Transclean Facilities Pty Ltd (No 4) [2021] FCCA 596
Mondal v Transclean Facilities Pty Ltd (No 3) [2020] FCCA 3348
Mondal v Transclean Facilities Pty Ltd (No 2) [2020] FCCA 2944
Mondal v Transclean Facilities Pty Ltd (No 1) [2020] FCCA 1334
Construction, Forestry, Mining and Energy Union & Others v Clarke (2008) 170 FCR 574
Qantas Airways Ltd v Transport Workers Union of Australia (No 2) (2011) 211 IR 119
Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194
Jensen v Cultural Infusion (Int) Pty Ltd [2020] FCA 538
On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 336
Number of paragraphs: 16 Date of last submissions: 18 March 2021 Date of hearing: On the papers Place: Melbourne
Applicant Subrata Kumar Mondal Solicitor for the First Respondent Stephen Peter Byrne, Lawyer Solicitor for the Second Respondent Neesham White Gentle ORDERS
MLG 744 of 2019 BETWEEN: SUBRATA MONDAL
Applicant
AND: TRANSCLEAN FACILITIES PTY LTD
First Respondent
SHAYAN DATTA
Second Respondent
ORDER MADE BY:
JUDGE O'SULLIVAN
DATE OF ORDER:
16 APRIL 2021
THE COURT ORDERS THAT:
1.There be no order as to costs.
2.The application in a case filed on 18 March 2021 be dismissed.
REASONS FOR JUDGMENT
INTRODUCTION
These reasons for decision concern an application for costs following the dismissal of the substantive proceedings for the reasons set out in Mondal v Transclean Facilities Pty Ltd (No 4) [2021] FCCA 596 (“Mondal (No 4)”).
The background to this costs application is set out in that decision and also:
(a)Mondal v Transclean Facilities Pty Ltd (No 3) [2020] FCCA 3348 (“Mondal (No 3)”);
(b)Mondal v Transclean Facilities Pty Ltd (No 2) [2020] FCCA 2944 (“Mondal (No 2)”); and
(c)Mondal v Transclean Facilities Pty Ltd (No 1) [2020] FCCA 1334 (“Mondal (No 1)”).
These reasons, in which the parties will be referred to in the same terms, should be read in conjunction with the above reasons. For the sake of brevity the background set out in the above mentioned reasons will not be rehearsed.
COSTS APPLICATION
Following the orders made for the reasons set out in Mondal (No 4) on 18 March 2021 the first respondent filed:
(a)an application in a case;
(b)an affidavit from its solicitor Mr Stephen Byrne; and
(c)an outline of submissions.
In the application in a case the orders sought by the first respondent were:
1. The application be dealt with in the papers.
2. Pursuant to section 570 of the Fair Work Act, the applicant: -
(a) pay the respondents’ costs of the proceedings; alternately
(b) pay so much of the respondents’ costs of the proceedings as…
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- Case
- [2021] FCCA 738
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the Court was whether the applicant's claim was so lacking in merit that it could be characterised as vexatious or instituted without reasonable cause, thereby justifying an award of costs in favour of the first respondent. This involved an assessment of whether the applicant could have established he was an employee of Transclean Facilities Pty Ltd, given his conduct in declaring himself to the Australian Taxation Office as having personal services income and his dealings with Goods and Services Tax (GST).
O’Sullivan J noted that while section 570 of the *Fair Work Act* provides for costs in certain circumstances, an award of costs does not automatically follow even if the statutory preconditions are met. The Court rejected the first respondent's submission that the applicant's conduct in relation to ATO determinations and GST collection rendered the claim vexatious or without reasonable cause. His Honour explained that the determination of whether an individual is an employee or an independent contractor requires a multifactorial assessment of the totality of the relationship, the system of work, and work practices, as established in modern authority. The Court found that the proceedings did not reach a stage where this assessment could be undertaken due to issues with the applicant's pleadings and non-compliance with court orders, but this did not automatically render the claim vexatious or instituted without reasonable cause.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
For the purposes of these reasons the same approach will be adopted. However, even where the statutory preconditions in s.570 of FW Act have been satisfied costs do not automatically follow (see Qantas Airways Ltd v Transport Workers Union of Australia (No 2) (2011) 211 IR 119 at [208]).CONSIDERATION Given the first respondent’s submissions the claim for costs relying on the exemption in s.570(2)(a) of the FW Act appears to be on the basis of following arguments:1. The applicant had an A.T.O. determination his income was personal services income4. That determination appears in the applicant’s returns filed with the A.T.O. in 2016 & 17 and his reporting personal services income consistent with the psi determination in 2018. The A.T.O.’s personal services income eligibility criteria appear in the affidavit of Stephen Peter Byrne, sworn 15 March 2021, filed in support of this application.2. The applicant collected G.S.T. on the sums he received in the schedules attached to his claim5. Neither the applicant, nor the partnership with his wife through which he invoiced from 2015, was registered to collect G.S.T. The applicant remitted none of the G.S.T. he collected to the A.T.O. Invoice details and records from the A.T.O.’s ABN Lookup Portal, denoting G.S.T. status, appear in the affidavit of Stephen Peter Byrne, sworn 15 March, 2021, filed in support of this application.3. The applicant collected more in G.S.T. than he paid in all forms of tax6. From the schedules attached to the applicant’s claim, he received income:…In the circumstances, the applicant paid tax of only $37,315.30 on invoiced income he received ($412,851) and the G.S.T. alone collected by the applicant on that income exceeded $37,500 (@10%). In years 2013 – 2018, the applicant received total income of $482,443.00 (invoiced & as employee of Transclean), but reported income of only $305,954.00 to the A.T.O.No claim available to this applicant on the applicant’s facts7. These issues were pleaded by the first respondent2 and, viewed objectively according to Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879), had this proceeded to trial:(a) the applicant could never have made out he was an employee or regarded himself as such;(b) he could not have sought damages as an employee from declarations he made to the A.T.O.;(c) his application was utterly misconceived and, therefore, vexatious (see para 14, following), or made without reasonable cause.In the circumstance, the first respondent’s costs were incurred without cause or, alternately, wasted. With respect, the submissions appear to proceed upon a misunderstanding of the approach to the determination of whether a person is engaged as an independent contractor or an employee. The FW Act imposes obligations on employers in relation to their employees and confers benefits and rights on employees. It does so without defining when someone is an employee as distinct from an independent contractor, leaving on modern authority (the assessment of the relationship in its totality, the system of work, the work practices and) the approach to a multifactorial assessment of the true legal relationship of the parties to be done in a practical and realistic way: see for e.g: approach in Jensen v Cultural Infusion (Int) Pty Ltd [2020] FCA 538 at paragraphs [83] to [89]. These proceedings never got to that stage because of the problems with the applicant’s pleadings and failure to comply with Court orders. That doesn’t mean the claim was vexatious or instituted without reasonable cause.