FEDERAL CIRCUIT COURT OF AUSTRALIA
Murphy v Innovior Pty Ltd (No 2) [2021] FCCA 258
File number(s): SYG 2786 of 2019 Judgment of: JUDGE BAIRD Date of judgment: 17 February 2021 Catchwords: INDUSTRIAL LAW – COSTS – Application for costs brought by respondent pursuant to s.570 of the Fair Work Act 2009 (Cth) following successful summary dismissal application – whether s.570(2) discretion to order costs enlivened – whether applicant commenced proceeding “without reasonable cause” – parties exchanged without prejudice offers after proceeding commenced – lump sum costs – whether appropriate to order – indemnity costs – whether appropriate to make an indemnity costs order – not satisfied applicant’s conduct warrants indemnity costs order in Fair Work context – Application for costs allowed – appropriate to order lump sum – costs awarded on party‑party basis Legislation: Fair Work Act 2009 (Cth), s 570 Cases cited: A2B Australia Limited & Anor v Oz Power Group Pty Ltd & Anor [2020] FCCA 2623
Australian Workers Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23; (2013) 232 FCR 23
Ashby v Slipper (No.2) [2014] FCAFC 67; (2014) 314 ALR 84Bellamy’s Australia Limited v Basil (No 2) [2019] FCAFC 169
Calderbank v Calderbank [1975] 3 All ER 333
Clifton (Liquidator) v Kerry J Investment Pty Ltd trading as Clenergy (No 2) [2020] FCAFC 112Colgate-Palmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225
Gill v Karan Grewal Pty Ltd [2020] FCCA 1202
Henley Arch Pty Ltd v Del Monaco (No 2) [2020] FCCA 1911
Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257
Liang v Joblink Australia Pty Ltd [2019] FCA 429
Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221
Murphy v Innovior Pty Ltd [2020] FCCA 2060
Ryan v Primesafe [2015] FCA 8; (2015) 323 ALR 107
Trustee for the MTGI Trust v Johnston (No 2) [2016] FCAFC 190Tsilibakis v Transfield Services (Australia) Pty Ltd (No.2) [2015] FCA 1048
Number of paragraphs: 70 Date of last submission/s: 17 September 2020 Date of hearing: On the papers Place: Sydney Counsel for the Applicant: D O’Sullivan Solicitor for the Applicant: Matthew Warburton, Outlaw Legal Counsel for the Respondent: M Minucci Solicitor for the Respondent: Jonathon Leung, Strongman Crouch ORDERS
SYG 2786 of 2019 BETWEEN: DANIEL MURPHY
Applicant
AND: INNOVIOR PTY LTD
Respondent
ORDER MADE BY:
JUDGE BAIRD
DATE OF ORDER:
17 FEBRUARY 2021
THE COURT ORDERS THAT:
1.The Applicant pay the Respondent’s costs, including disbursements, and including the costs of this costs application, fixed as a lump sum pursuant to r.21 of the Federal Circuit Court Rules 2001 (Cth), in the total amount of $20,021.15.
2.The proceedings be dismissed.
REASONS FOR JUDGMENT
JUDGE BAIRD
INTRODUCTION
These reasons address the post-hearing application for costs made by the respondent, Innovior Pty Ltd, pursuant to s.570 of the Fair Work Act 2009 (Cth) (FW Act), following the success of its summary dismissal application.…
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- Case
- [2021] FCCA 258
- Decision Date
CaseChat Overview and Summary
The court was required to determine two primary legal issues. Firstly, whether the preconditions for exercising the discretion to award costs under section 570(2) of the *Fair Work Act 2009* (Cth) were met, meaning whether the proceeding was commenced "without reasonable cause." Secondly, if the discretion was enlivened, the court had to consider the appropriate form of costs order, including whether a lump sum order was appropriate and whether indemnity costs should be awarded.
Judge Baird reasoned that the proceeding had been commenced "without reasonable cause" because, at the time of institution, it had no reasonable prospects of success, given the clear terms of a Deed that operated to bar Mr Murphy from commencing the proceeding. The parties' positions regarding the Deed were well-established prior to the commencement of the litigation. While acknowledging that the discretion under section 570(2) should be exercised cautiously and that occasions for awarding costs under this section are likely to be exceptional, the court found that the specific facts of this case warranted the exercise of that discretion. The court also considered the parties' without prejudice offers and Mr Murphy's objection to the length of Innovior's submissions, ultimately finding no real prejudice to Mr Murphy from the length of the submissions.
The court ordered that Mr Murphy pay Innovior's costs, including disbursements and the costs of the application, fixed as a lump sum of $20,021.15. This lump sum was awarded on a party-party basis, and the court was not satisfied that Mr Murphy's conduct warranted an indemnity costs order in the Fair Work Act context.
Orders
Orders of the court
THE COURT ORDERS THAT:
1. The Applicant pay the Respondent’s costs, including disbursements, and including the costs of this costs application, fixed as a lump sum pursuant to r.21 of the Federal Circuit Court Rules 2001 (Cth), in the total amount of $20,021.15.
2. The proceedings be dismissed.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
In respect of the offers made after delivery of the principal judgment, Mr Murphy submits that the first Innovior costs offer ($20,000 – see above at [17]) was for an amount almost 4 times what would be awarded under the Court’s Schedule 1 costs scale, as well as being conditional on Mr Murphy foregoing his appeal rights. It was unreasonable. Mr Murphy submits his counter offer of $10,000, plus an agreement to forgo any appeal, was very reasonable.CONSIDERATION AND DETERMINATION It is appropriate I first turn to Mr Murphy’s objection to Innovior’s submissions (8 pages) exceeding the 4 page limit I directed. Whilst I am sympathetic to Mr Murphy’s objection, I am not persuaded that it is appropriate on this occasion to reject Innovior’s submission, or to limit my consideration to the first 4 pages. In that the document recited the history of the proceeding, summarised findings made in the principal judgment, referred to the relevant statutory provisions and set out paragraphs from referenced case law, I consider the additional length would be unlikely to cause any surprise or greatly increase the costs of preparation of the response. Mr Murphy’s submission does not demonstrate any real prejudice to his counsel and legal representatives in being confronted with an 8 page, rather than a 4 page, document, and does not reveal any inability to meet and respond to Innovior’s submission by reason of the additional length of the document. It follows that I have had regard to both parties’ submissions.Was the proceeding commenced “vexatiously or without reasonable cause”? In the principal judgment I rejected Mr Murphy’s construction of Kowalski (principal judgment at [54]). At principal judgment [56]‑[64] I construed the terms of the Deed, and at [65] concluded that the Deed operated to bar Mr Murphy from commencing the proceeding. I decided that the proceeding had no reasonable prospects of success and should be dismissed. That is, Mr Murphy’s application had no reasonable prospects at the time it was instituted, and on the facts of the terms of the Deed must fail: see Leighton at [7(3)], and Ashby at [35]. Further, the parties positions on the Deed were well released before the commencement of the proceedings. For these reasons, I consider that, on the particular facts of this case, the proceeding was commenced “without reasonable cause” for the purposes of s.570(2)(a) of the FW Act. As a statutory precondition in s.570(2) is made out, it follows that the discretion to award costs in this proceeding is enlivened: see Leighton at [7]; Ashby at [35]. The authorities establish that suchdiscretion conferred by the confined terms of s 570(2) should be exercised cautiously and not pre-emptively, and the case for its exercise should be clear. Whilst in Leighton, the Full Court of the Federal Court observed that it is not necessary to prove that there are exceptional circumstances warranting the making of an order, in the later decision of Ashby, the Full Court reaffirmed that the occasions upon which costs will be awarded under s 570 are likely to be exceptional. Having regard to the authorities to which I have referred above, I adopt the approach that whilst it is not necessary that a party prove exceptional circumstances, the case for the exercise of the discretion to award costs is rare, and is likely to be exceptional.