Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics) (No.2)

[2016] FCCA 1606

FEDERAL CIRCUIT COURT OF AUSTRALIA

NALBANDIAN v COMMONWEALTH OF AUSTRALIA (AUSTRALIAN BUREAU OF STATISTICS) (No.2) [2016] FCCA 1606

Catchwords:
INDUSTRIAL LAW – Breach of deed.

COSTS – Whether a costs order is appropriate – costs awarded against the applicant.

Legislation:

Fair Work Act 2009, ss.566, 570.

Applicant: ANTHONY NALBANDIAN

Respondent: COMMONWEALTH OF AUSTRALIA (BUREAU OF STATISTICS)

File Number: SYG 1380 of 2015

Judgment of: Judge Street

Hearing date: 29 June 2016

Date of Last Submission: 29 June 2016

Delivered at: Sydney

Delivered on: 30 June 2016

REPRESENTATION

Counsel for the Applicant: Mr A Duc

Solicitors for the Applicant: Duc Legal

Counsel for the Respondent: Mr Y Shariff

Solicitors for the Respondent: Australian Government Solicitors

ORDERS

1. Judgment for the respondent against the applicant on the cross claim.

2. The applicant to pay the respondent $28,541.00.

3. The applicant to pay the costs of the respondent fixed in the amount of $35,000.00.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1380 of 2015

ANTHONY NALBANDIAN

Applicant

And

COMMONWEALTH OF AUSTRALIA (BUREAU OF STATISTICS)

Respondent

REASONS FOR JUDGMENT

(As corrected)

1. The Court heard a separate question in this matter brought within the Court’s jurisdiction under s.566 of the Fair Work Act 2009, and as a result of the answer of that separate question, determined that the application brought by the applicant should be dismissed.  There remained outstanding the cross-claim by the respondent.  That cross-claim by the respondent was for recovery of the sum of $28,546 payable under the deed as a result of the breach of the deed by Mr Nalbandian in making and pursuing further complaints against the Commonwealth.

2. I find that administrative expenses that would have been incurred due to Mr Nalbandian’s breach of the deed would have been reasonably pre-estimated to exceed the amount provided under the deed. I find that the obligation to pay the said sum for breach of the deed was a reasonable term, reflected a genuine pre-estimate of damages, and was not a penalty.

3. The Court has found that the deed was binding upon Mr Nalbandian. It is common ground as a matter of construction that the deed creates an obligation to repay the sum of $28,546 in circumstances where Mr Nalbandian has breached the deed by making further complaints. The bringing of these proceedings was the making of further complaints. There was very substantial administrative work generated by Mr Nalbandian’s further claims. In these circumstances, I am satisfied that the Commonwealth is entitled to relief on the cross-claim, and I order the applicant to pay the respondent the sum of $28,546.

4. The respondent has also made an application for costs under s.570 of the Fair Work Act 2009. The ordinary rule in this jurisdiction is that each party should pay its own costs. Section 570 identifies a discretionary power identifying the circumstances in which the court may depart from the ordinary rule. Section 570 is as follows.

   Costs only if proceedings instituted vexatiously etc.

   (1)  A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

   Note:         The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

   (2)  The party may be ordered to pay the costs only if:

   (a)  the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

   (b)  the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or

   (c)  the court is satisfied of both of the following:

   (i)  the party unreasonably refused to participate in a matter before the FWC;

   (ii)  the matter arose from the same facts as the proceedings.

5. In the present case, I am satisfied that the applicant instituted these proceedings vexatiously and without reasonable cause. The applicant was well aware that he had signed a deed that was binding upon him. The applicant manufactured circumstances and excuses to try and keep the benefit of the deed and the payment thereunder, and then to bring further unmeritorious complaints and proceedings to obtain further funds from the Commonwealth.

6. The applicant’s conduct in these proceedings was both vexatious and unreasonable. This is an appropriate case, notwithstanding the caution, to be exercised in relation to the making of any order under s.570 of the Fair Work Act 2009 to make an order against the applicant. The history of these proceedings is protracted and was one where the issue of the significance of the deed had been drawn to the applicant’s attention by an earlier judge of this Court, as well as having been drawn to the applicant’s attention by this Court. Indeed, this Court made an order requiring the respondent to identify for the applicant’s benefit the likely costs that would follow if an order under s.570 of the Fair Work Act 2009 was successful.

7. The amount of the costs order being sought by the Commonwealth is in fact less than the amount identified in the document sent by the Commonwealth to the applicant pursuant to the directions made by the court.  I am satisfied that the Commonwealth has incurred costs well in excess of the amount being sought. I am satisfied that these recoverable legal costs are separate from and in addition to the administrative expenses that Mr Nalbandian has caused the Commonwealth by making further complaints after the signing of the deed and by bringing these proceedings.

8. I have also taken into account the success of the Commonwealth under the cross-claim and I find that those administrative expenses incurred by reason of Mr Nalbandian’s breach of the deed do not cover the party-party legal costs incurred. I find that the reasonable party-party legal costs on the applicant’s substantive claim incurred by the respondent exceed $35,000. I note that these party-party legal costs in the sum of $35,000 arise from the bringing of the applicant’s claim that has been dismissed and that the proposed costs order does not reflect any costs on the cross-claim.

9. I find that this is an appropriate matter in which the Court should exercise its power under s.570 of the Fair Work Act 2009 to order the applicant to pay the respondent’s costs because of the applicant’s vexatious conduct in bringing these proceedings that were bound to fail. I find that it is reasonable to fix the order of costs and that the appropriate sum for party-party legal costs is $35,000. I find that fixing the costs order is appropriate in the circumstances of this case where the applicant has been vexatious in bringing these proceedings.  The fixing of the party-party costs is also appropriate to ensure the bringing of finality to the dispute between the parties. It is in those circumstances that I order Mr Nalbandian to pay costs in the amount of $35,000. 

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

Date: 1 July 2016

CORRECTIONS

1.Changed hearing date to 29 June 2016.

2.Changed date of last submission to 29 June 2016.

3.Changed date of delivery on to 29 June 2016.