MORRIS v McConaghy Australia Pty Ltd (No.2)

[2017] FCCA 2243

FEDERAL CIRCUIT COURT OF AUSTRALIA

MORRIS v MCCONAGHY AUSTRALIA PTY LTD (No.2) [2017] FCCA 2243

Catchwords:
COSTS – Application for costs pursuant to s.570 of the Fair Work Act 2009.

Legislation:

Fair Work Act 2009 (Cth), s.570

Applicant: JONATHAN MORRIS

Respondent: MCCONAGHY AUSTRALIA PTY LTD (ACN 168 218 380)

File Number: SYG 1137 of 2017

Judgment of: Judge Street

Hearing date: 14 September 2017

Date of Last Submission: 14 September 2017

Delivered at: Sydney

Delivered on: 14 September 2017

REPRESENTATION

Counsel for the Applicant: Mr O Fagir

Solicitors for the Applicant: Aus Ship Lawyers

Solicitors for the Respondent: Mr S Jauncey
Henry Davis York

ORDERS

1. The applicant pay the respondent’s legal costs and disbursements incurred in these proceedings on and from 28 June 2017 as well as reserved costs in an amount to be agreed or taxed under s.570 of the Fair Work Act 2009 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1137 of 2017

JONATHAN MORRIS

Applicant

And

MCCONAGHY AUSTRALIA PTY LTD (ACN 168 218 380)

Respondent

REASONS FOR JUDGMENT

1. This is an application by the respondent for costs against the applicant in circumstances where the proceedings are of a kind governed by s 570 of the Fair Work Act2009 (Cth) (“the Fair WorkAct”). The subject matter of the proceedings included an alleged contravention of the Fair Work Act, as well as a common law claim. However, the matters are ones in respect of which s 570 of the Fair Work Act governs the Court’s powers in relation to costs.

2. These proceedings were commenced on 12 April 2017. This Court made orders on the first return date providing the parties with an opportunity to try and explore mediation. On that occasion, the Court explored with the parties the background to the dispute and identified that it was providing that opportunity for mediation in the hope that the parties would be able to resolve the dispute. It became apparent that the parties were not able to resolve the dispute and the matter was one which was the subject of communications from the solicitor for the respondent seeking to have the matter relisted for the purpose of entertaining a freezing application.

3. The material that was filed in support of that application was patently deficient and insufficient to support a freezing orders. The Court wrote to the parties identifying the deficiencies in the application. That email was, in substance, ignored by the applicant and a further application was pursued also, suggesting that the Court might not have time to deal with urgent matters. That was an inappropriate communication and should not have been sent as the Court identified in its reasons earlier delivered.

4. The freezing application was doomed to failure and had no reasonable prospect of success. There was no prima facie case let alone the problem with the pleading and parties. It was vexatious to bring that interlocutory application on the same material and in the same form that was before the Court at the time that the Court wrote to the parties because it was clearly doomed to failure. That step by the applicant and the pursuit of the freezing order caused the respondent to incur costs. I am satisfied, taking into account the policy considerations and purpose behind s 570 of the Fair Work Act, that this is a case where the costs incurred as a result of that application are ones which the applicant should be ordered to pay. Those costs were reserved on 28 June 2017.

5. The Court has before it an application by the respondent for costs on and from 28 June 2017 arising from the discontinuance of the proceedings by the applicant on 31 July 2017. That discontinuance occurred in circumstances where this Court had made orders fixing the matter for hearing. The discontinuance filed by the applicant was itself an unreasonable act and vexatious by the applicant in circumstances where this Court was in a position to hear and determine the dispute between the parties. I am satisfied taking into account the purpose behind s 570 of the Fair Work Act, the pursuit of the freezing order and the filing of the discontinuance by the applicant in the present proceedings, are conduct that warrants the Court making an order that the applicant pay the costs sought by the respondent in the present case.

6. Further, whilst these proceedings were on foot and after the observations made by this Court, first in its email and then in its oral reasons on 28 June 2017 about the deficiencies in respect of the freezing order application and the need for joinder of parties, the possibility of invoking this Court’s associated jurisdiction in respect of the shareholder dispute, the applicant saw fit to commence proceedings on 19 July 2017 in the Federal Court of Australia.

7. On the face of it, those proceedings were vexatious in respect of the alleged cause of action under the Act which was also on its face, the basis for invoking the jurisdiction of that court. Had an application been brought forward by the applicant, this Court would have enjoined the applicant from pursuing that part of the proceedings under the Fair Work Act whilst these proceedings were on foot and fixed for hearing. One cannot bring two sets of proceedings on the same subject matter. The expansion of the shareholders dispute being raised in the Federal Court of Australia proceedings did not justify the taking of proceedings by the applicant involving the issue of the Fair Work Act when these proceedings were on foot and fixed for hearing. The step taken by the applicant to bring separate proceedings on the same cause of action under the Fair Work Act and to discontinue the proceedings fixed for hearing were vexatious and unreasonable acts causing the respondent to incur costs.

8. I am satisfied that this is an appropriate matter in which the Court should exercise its powers under s 570 of the Fair Work Act. I am satisfied that the facts in the present case satisfy s 570(2)(b) of the Fair Work Act in that the applicant has engaged in unreasonable acts that have caused the respondent to incur costs.

9. I am further satisfied, in the circumstances of the present case, given the observations that were made by this Court at the time of the freezing application in respect of the nature of the alleged contract and the parties issue that was identified by the Court, that the proceedings were being instituted vexatiously or without reasonable cause within s 570(2)(a) of the Fair Work Act and that that is a further reason why an order as to costs should be made on and from 28 June 2017 as sought by the respondent.

I certify that the preceding nine (9) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:  

Date:  26 October 2018