Mount v Dover Castle Metals Pty Ltd (Costs)

Link copied
Case Copied 38 min read

FEDERAL COURT OF AUSTRALIA

Mount v Dover Castle Metals Pty Ltd (Costs) [2025] FCA 402

File number: NSD 1099 of 2021
Judgment of: KATZMANN J
Date of judgment: 29 April 2025
Catchwords: COSTS – where applicant sued respondents for damages/compensation, exemplary damages and pecuniary penalties alleging contraventions of whistleblower provisions of Corporations Act 2001 (Cth) and of general protections provisions of Fair Work Act2009 (Cth) and also claimed to have been wrongfully dismissed – where Fair Work Act claims abandoned shortly before trial and other claims dismissed – where applicant refused to accept numerous offers to settle proceedings – where respondents applied for costs and both Acts limit power of Court to make costs orders against an applicant in applicant’s position, which Act applies – where respondents claim applicant’s failure to accept any one of three particular offers of settlement was unreasonable, whether applicant should be ordered to pay costs – whether costs should be awarded on an indemnity basis
Legislation:

Corporations Act 2001 (Cth) ss 1317AAE, 1317AC, 1317AD, 1317AE(1), 1317AH, 1317AH(3)(b), 1317J

Fair Work Act 2009 (Cth) ss 37M(3), 37N(4), 43, 340, 570

Federal Court of Australia Act 1976 (Cth) s 43

Federal Court Rules 2011 (Cth) r 40.01

Cases cited:

Ashby v Slipper (No 2) [2014] FCAFC 67; 314 ALR 84; 144 ALD 10

Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450

Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246; 151 ACSR 26

Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586

Cook v Australian Postal Corporation (2018) 264 FCR 72

Dorsch v HEAD Oceania Pty Ltd (Costs) [2024] FCA 832

Goodwin v Phillips (1908) 7 CLR 1

Joseph v Parnell Corporate Services Pty Ltd (2021) 284 CLR 546

Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2011] FCAFC 141

Lamb v Cotogno (1987) 164 CLR 1

Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) (No. 2) [2014] NSWCA 391

McDonald v Parnell Laboratories (Aust) Pty Ltd (No 2) (2007) 164 FCR 591

Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221

Moorgate Tobacco Co Ltd v Phillip Morris Ltd (1980) 145 CLR 457

Mount v Dover Castle Metals Pty Ltd [2025] FCA 191

Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580

Quinlan v ERM Power Ltd (No 2) [2021] QSC 51; 7 QR 406

Ryan v Primesafe [2015] FCA 8; 323 ALR 107

Sabapathy v Jetstar Airways (No 2) [2021] FCAFC 68

Salama v Sydney Trains (No 2) [2021] FCA 1200

The Environmental Group Ltd v Bowd (No 2) [2019] FCA 1227

Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190

Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481

XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448

Division: Fair Work Division
Registry: New South Wales
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 78
Date of last submissions:
CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Mount v Dover Castle Metals Pty Ltd (Costs) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2025] FCA 402
Decision Date

CaseChat Overview and Summary

In the matter of Mount v Dover Castle Metals Pty Ltd, the applicant sued the respondents for damages, compensation, exemplary damages, and pecuniary penalties. The allegations involved contraventions of the whistleblower provisions under the Corporations Act 2001 (Cth) and the general protections provisions under the Fair Work Act 2009 (Cth). The applicant also claimed to have been wrongfully dismissed. The Fair Work Act claims were abandoned shortly before the trial, and the remaining claims were dismissed. The respondents applied for costs, highlighting that the applicant had refused to accept several offers to settle the proceedings. The court was required to determine which Act, if any, applied to limit the power of the Court to make costs orders against the applicant and whether the applicant's failure to accept any one of the three particular offers of settlement was unreasonable, thereby warranting an adverse costs order.

The court considered the offers made by the respondents and the applicant's response to them. The respondents made their first settlement offer within a month of the commencement of the proceeding. Although the offer was withdrawn due to the applicant's refusal, the respondents made subsequent offers with reduced terms. The applicant responded by denying all allegations and making a counteroffer. The court found that the respondents made reasonable offers of settlement and that the applicant's decision to reject these offers was imprudent, if not foolish. However, the court concluded that the applicant's conduct did not warrant an adverse costs order. The court also noted that the applicant's lawyers improperly filed supplementary submissions without leave, and these were disregarded in the decision.

The court's reasoning was based on the principle that, although the applicant's decision to reject the offers was imprudent, it did not constitute an unreasonable act or omission that warranted an adverse costs order. The court held that the applicant's claims were not hopeless or weak, as the respondents argued, but rather had some legal prospects, particularly regarding the claim for exemplary damages. The court found that the applicant's conduct in failing to disclose his earnings and resisting the production of records was inconsistent with his obligations under the Fair Work Act. However, the court did not accept the respondents' contention that the proceedings were doomed to fail once the general protection claims were discontinued. The court dismissed the respondents' interlocutory application for costs.

Orders

Orders of the court

1. The respondents’ interlocutory application filed on 13 March 2025 be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The application for indemnity costs is based on the contention that, by 26 April 2022 or 27 May 2022, at the latest Mr Mount should have been aware that, even if he had succeeded on liability, he would not obtain an order for compensation and that the proceedings would be dismissed, indeed, that he had “no chance of success”. By 8 March 2024, the respondents contend, Mr Mount would not have been able to obtain an order for penalties and should have been aware that his claim for damages had “no chance of success”.Background The respondents made their first settlement offer on 11 November 2021, within a month of the commencement of the proceeding, although an earlier offer had been made before the proceeding was filed. That offer was to settle without admissions on a full and final basis on the following terms: that the proceeding be dismissed; that the parties enter into a deed releasing the respondents, Luke Stewart, and the current and former directors, officers, employees, agents and contractors of DCM from liability in the proceeding and all claims Mr Mount has or may have in connection with his “engagement” by DCM, its termination, and under the FW Act and the Corporations Act; within 14 days of him executing his counterpart of the deed, that DCM pay Mr Mount $220,000 less tax and inclusive of superannuation and annual leave); that the parties agree not to disparage each other; that Mr Mount returns to DCM all documents and information in his possession in connection with his “engagement” and the work he performed and to destroy all electronic copies; and that the terms would be kept confidential unless disclosure was required by the Australian Tax Office or other government authority. The offer was available for acceptance until 25 November 2021. On 16 November 2021 Bromwich J dismissed Mr Mount’s application for preliminary discovery and awarded costs in favour of the respondents. Consequently, on 22 November 2021 the 11 November offer was withdrawn. Instead, the respondents offered to settle on the same terms but with a reduction for those costs as agreed or taxed. That offer was left open for acceptance until 25 November 2021. On 1 December 2021 Mr Mount, through his then solicitors, responded in an inflammatory way, denying all allegations, which he described as “baseless but unsurprising, being entirely consistent with [their] ongoing victimisation of [Mr Mount] as a protected whistleblower”. He contended that he was being “scapegoat[ed]” for the respondents’ contraventions of the Corporations Act, then said to be under investigation by ASIC. He made a counteroffer of $398,149.64, made up of $298,149.64, being the balance said to be owing under the contract; $120,000 in penalties under the FW Act and the Corporations Act and “general damages”; less $20,000 for the respondents’ costs of the preliminary discovery proceeding. He declined to agree to a release from any action in defamation. That offer was open for acceptance until 5.00pm on 15 December 2021.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Offer 3 was made after the general protection claims had been abandoned and after the respondents had served their outline of opening submissions which drew attention to the insuperable barrier to Mr Mount’s claims under ss 1317AAE and 1317AC of the Corporations Act. As I have indicated, however, I am not satisfied that Mr Mount’s claim for exemplary damages was hopeless or unarguable. What that award might have been is difficult to say and I received sub-optimal assistance from the parties on this question. Still, it could well have exceeded the amount of the respondents’ offer.Conclusion I have some sympathy with the respondents’ position. As I have already said, they made reasonable offers of settlement. With the benefit of hindsight, Mr Mount’s decision to reject each of Offers 1, 2 and 3 was certainly imprudent, if not foolish. Ultimately, however, viewed prospectively rather than retrospectively, I am not persuaded that his conduct in doing so was an unreasonable act or omission which warrants an adverse costs order. Even if I were satisfied that the jurisdiction to award costs had been enlivened, I would not have exercised my discretion in the respondents’ favour.Addendum Yesterday morning the parties were informed that judgment would be delivered at 9:30am today. At that time the judgment was ready for publication. At 10:23pm Mr Mount’s lawyers lodged for filing a set of supplementary submissions. It was improper of them to do so. Not only did they not have leave to file supplementary submissions, they did not seek leave. Accordingly, I have paid no regard to them.

Ratio Decidendi

Legal Principle Established

Third, he submitted that his case had “reasonable legal prospects” and “genuine and reasonable steps were taken to resolve the matters in dispute”, consistent with his obligations under s 37N of the FW Act. He asserted that he had “approach[ed] all negotiations in good faith with the preparedness to compromise in order to achieve an agreement”. He argued that his claim was “complex” and “held valid legal prospects”. Consequently, he contended that it would be “contrary to the intents and purposes of costs principles to subject [him] to a punitive indemnity costs order based on the decision to pursue a valid claim with legal prospects.Consideration From the outset, the respondents steadfastly resisted Mr Mount’s claims. Each of the relevant offers they made represented a genuine and substantial compromise of their position. The question is whether it was unreasonable of Mr Mount not to accept any of them. Most of Mr Mount’s arguments were not to the point. With respect to the first, as the respondents pointed out in their submissions in reply, their application was not made on the basis that Mr Mount’s case was hopeless or weak. Rather, it was brought on the basis that, at the time the relevant offers were made, Mr Mount had fully mitigated his loss such that acceptance of any one of the offers would have resulted in a “windfall” for him. The second of Mr Mount’s arguments does not engage with the respondents’ submissions either. Leach is an inapt analogy. The complexities of this case were largely of Mr Mount’s own making, as is apparent from the principal judgment. Whatever the complexities of the whistleblower claims, however, once he abandoned his general protection claims under the FW Act he had no prospect of obtaining any pecuniary penalties because, as I explained in the principal judgment, he had no standing to do so. That meant that, putting aside his claim for exemplary damages and for damage to his reputation (brought against only one of the respondents, George Tucker), to which I will come shortly, the amount of money he could recover from the respondents was limited to any loss he had suffered as a result of the premature termination of his employment contract. Yet the amount he recovered from work he performed in the remaining months of that contract far exceeded the amount he would have been paid had the contract run its full term (PJ[672]). There was no substance to Mr Mount’s claims that his post-employment income was “collateral or extraneous” or that the amount he was paid as a success fee for income received from Oldfields Holdings was earned by the deployment of his labour or the provision of his services after the date when his contract with DCM would have expired. As I observed in the principal judgment, he filed no evidence in support of those claims and the evidence he did file was inconsistent with it (PJ[674]–[698]). I agree with the respondents that Mr Mount’s conduct in failing to disclose his earnings and resisting production of the records of those earnings until compelled to do so was inconsistent with his obligations under s 37N of the FCA Act. On the other hand, I do not accept the respondents’ contention that the proceedings were doomed to fail once the general protection claims were discontinued because the claim for compensation could not be sustained, not least because, if Mr Mount’s claims under ss 1317AD and 1317AE had been successful, the Court might have been persuaded to grant declaratory relief reflecting that outcome.