Murphy v Innovior Pty Ltd (No 2)

In *Murphy v Innovior Pty Ltd (No 2)*, Judge Baird of the Federal Circuit and Family Court of Australia considered an application for costs brought by the respondent, Innovior Pty Ltd, pursuant to section 570 of the *Fair Work Act 2009* (Cth). The application followed the successful summary dismissal of the applicant's, Mr Murphy's, proceeding. The central dispute revolved around whether the discretion to award costs under section 570(2) was enlivened, specifically whether Mr Murphy had commenced the proceeding "without reasonable cause."

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.