Pentridge Village Pty Ltd (in liq) v Construction, Forestry, Maritime, Mining & Energy Union (Costs)
[2022] VSC 403
•19 July 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
EMPLOYMENT AND INDUSTRIAL LIST
S CI 2016 02556
| PENTRIDGE VILLAGE PTY LTD (In Liquidation) (ACN 087 151 068) & ORS (according to the Schedule attached) | Plaintiff |
| v | |
| CONSTRUCTION, FORESTRY, MARITIME, MINING & ENERGY UNION & ORS (according to the Schedule attached) | Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 19 July 2022 |
CASE MAY BE CITED AS: | Pentridge Village Pty Ltd (in liq) & Ors v Construction, Forestry, Maritime, Mining & Energy Union & Ors (Costs) |
MEDIUM NEUTRAL CITATION: | [2022] VSC 403 |
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COSTS – Plaintiffs’ pleading of unlawful means conspiracy alleges a breach of s 348 of the Fair Work Act 2008 (Cth) – Proceeding a matter arising under the Fair Work Act 2008 (Cth) – Whether defendants engaged in unreasonable acts or omission enlivening Court’s power to award costs – No order as to costs – Fair Work Act 2008 (Cth) ss 348, 570.
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HIS HONOUR:
On 8 June 2022 the Court delivered judgment in Pentridge Village Pty Ltd (in liq) & Ors v Construction, Forestry, Maritime, Mining & Energy Union & Ors,[1] upholding the plaintiffs’ appeal of an Associate Judge’s ruling.[2] During the hearing of the appeal, the parties foreshadowed that questions might arise regarding the application of s 570 of the Fair Work Act 2008 (Cth) (‘FWA’) to the present proceedings.[3] The parties were directed to file submissions on the costs of the appeal.
[1][2022] VSC 303 (‘Pentridge v CFMMEU’).
[2]Pentridge (n 1) [4].
[3]Transcript of Proceedings, T 168 L 6–10 (25 March 2022).
Section 570 of the FWA is as follows:
570 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) …
(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.
It is common ground between the parties that the proceeding is ‘a matter arising under’ the FWA.[4] As it is agreed between the parties that s 570 of the FWA applies to the proceeding, it is unnecessary to address in detail my reasons for concluding, independently of the parties, that the proceeding is a matter arising under the FWA. It is sufficient to point to one matter. The third FASOC at [13(b)] pleads a cause of action in unlawful means conspiracy. The unlawful conduct includes an alleged breach of s 348 of the FWA which provides that a person must not organise or take, or threaten to organise or take, any action against another person with intent to coerce the other person, or a third person, to engage in industrial activity. The unlawful means conspiracy pleading owes its existence, in part, to s 348 of the FWA. As such, the proceeding is a matter arising under the FWA.[5] The Court has no jurisdiction to award costs unless one of the exceptions in s 570(2) applies.[6]
[4]Plaintiffs, ‘Submissions on Costs filed 27 June 2022’, [1(a)]; Defendants, ‘Submissions on Costs filed 4 July 2022’, [3].
[5]Tucker v McKee [2022] FCAFC 98, [55].
[6]Tucker v Victoria (No 2) [2021] VSCA 182, [25].
The plaintiffs submit that the Court’s jurisdiction is enlivened by the exception in s 570(2)(b). The principles governing the application of s 570(2)(b) were summarised by the Court of Appeal in Tucker v Victoria (No 2):[7]
[7]Ibid.
A relatively strict standard of ‘unreasonableness’ is applied in the context of s 570(2). The standard (as it applied to an earlier version of the provision) was described as follows in Construction, Forestry, Mining and Energy Union v Clarke:
As the authorities indicate, there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable. Simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion [in sub-s (2)] to make a costs order. ... Indeed, while courts should use the discretion in [sub-s (2)] to ensure that parties to litigation arising from the [Act] do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise the discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation under the [Act] in the manner which they deem best.
Similarly, to avoid discouraging parties pursuing claims arising under the FWA in a ‘complete and robust way’, it has been said that the discretion conferred by s 570(2) is to be ‘exercised cautiously’ and only in cases where the ‘case for its exercise is clear’.
The meaning of para (b) is to some extent influenced by the terms of para (a). While there is some overlap between the criteria, they address different subject matters. Paragraph (a) asks whether the proceeding has been unreasonably or vexatiously brought; para (b) asks whether there has been an ‘inherently unreasonable’ act in the conduct of a proceeding that has not been unreasonably brought which nonetheless caused the other party to incur costs.
The scope for overlap between the paragraphs means that submissions (and judicial analysis) framed in the language of one of the paragraphs might better be understood in terms of the other. Here, for example, the proceedings themselves were said in some respects to have been instituted vexatiously or without reasonable cause. In determining whether para (b) applies in such circumstances, it is relevant to consider whether the proceedings were, in the relevant respect, instituted vexatiously or without reasonable cause.
…
The following principles apply in the case of s 570(2)(b):
(f) Paragraph (b) is enlivened when two criteria are satisfied:
(i) one party has engaged in an ‘unreasonable act or omission’; and
(ii) that unreasonable act or omission has caused the other party to incur costs.
(g) Unreasonableness is to be determined objectively. It is a question of impression and degree, to be assessed by reference to the particular circumstances of a given case.
(h) Unreasonableness is not to be confused with negligence or inefficiency. A failure to conduct litigation in the most efficient way does not, without more, enliven the paragraph. The fact that a party has conducted litigation inefficiently, made belated concessions, or adopted a misguided approach may be relevant to, but will not be conclusive of, the question of unreasonableness.[8]
[8]Ibid [26]–[29], [32] (citations omitted).
The plaintiffs rely on the following features of the defendants’ conduct to support the conclusion that the defendants have acted unreasonably:
The application which resulted in the Associate Justice dismissing the proceeding had the following features:
(a) it sought the most serious outcome of dismissal of the proceeding;
(b) the application was foreshadowed to the Plaintiffs for the first time on the afternoon prior to the 7 October 2021 hearing by email on 6 October 2022 at 4:43 pm from the CFMMEU Defendants’ counsel to the Plaintiffs’ counsel (AB Tab 47, p 2160), over four months after the Watson report was filed.
(c) The belated application was admitted before the Associate Judge to be “novel” “somewhat novel”:T47.18–47.20 (Tab 3, p 120 see also T51.4–51.5).
(d) It was also an application that had no merit and it constituted an unreasonable act for the application to have been made.
(e) The Plaintiffs were obliged to appeal the decision of the Associate Justice. The necessity to appeal the decision was a consequence of the CFMMEU Defendants’ unreasonable act.[9]
They also submit that the defendants acted unreasonably in defending the appeal from the Associate Judge’s ruling.[10]
[9]Plaintiffs, ‘Submissions on Costs filed 27 June 2022’, [25].
[10]Ibid [26].
I do not accept that any of the acts or omissions relied upon by the plaintiffs were unreasonable for the purposes of s 570(2)(b).
That the defendants foreshadowed their application to dismiss the proceeding the evening prior to the hearing before the Associate Judge was not unreasonable. Before the Associate Judge the defendants submitted that the plaintiffs had, by disavowing the Watson report, not complied with the self-executing order. The act of disavowal relied upon was contained in an affidavit that had been served two days prior to the hearing.[11] The timing of the application was not unreasonable. Even if it were, there is no evidence before the Court to demonstrate that the fact that the application was foreshadowed the day prior to a scheduled directions hearing incurred costs for the plaintiffs.
[11]Pentridge v CFMMEU (n 1) [23]–[27].
That the defendants’ application sought ‘the most serious outcome of dismissal of the proceeding’ is irrelevant. By its terms, the self-executing order operated to dismiss the proceeding. No other orders could have been sought on an application to give effect to the self-executing order.
I reject the plaintiffs’ submissions that the application had no merit and was unreasonable to be made. While I have concluded that the Associate Judge erred, the defendants’ application raised a legitimate question regarding the operation and construction of the self-executing order.[12] I do not accept that because the defendants’ application raised a novel issue, s 570(2)(b) is engaged. Section 570 ‘is designed to ensure respondents feel free to pursue arguable legal’ points without the threat of an adverse costs order.[13] The discretion to award costs should only be exercised in a ‘clear case’.[14] Mere novelty does not provide a clear case for the exercise of the discretion to award costs.
[12]Jamsek v ZG Operations Australia Pty Ltd(No 2) [2020] FCAFC 179, [3].
[13]Ryan v Primesafe [2015] FCA 8, [64].
[14]Saxena v PPF Asset Management Ltd [2011] FCA 395, [6].
Finally, I do not consider the defendants to have acted unreasonably in defending the appeal brought by the plaintiffs. The defendants’ submissions on the operation of the self-executing order were not without merit. Further, the defendants enjoyed partial success in the appeal. The Court rejected the plaintiffs’ applications to file a further expert report and the proposed fourth further amended statement of claim.[15] In this regard, I adopt the observations of White J in Perez v Northern Territory Department of Correctional Services (No 2):[16]
The very fact that the respondent was successful in defending a number of the grounds of appeal brought by the appellant would make it difficult for him to establish that the respondent had acted unreasonably so as to cause him to incur costs in connection with the appeal. I regard this as a difficulty for the appellant which is insuperable.[17]
[15]Pentridge v CFMMEU (n 1) [51], [65].
[16][2016] FCA 1354.
[17]Ibid [5].
I reject the plaintiffs’ submission that s 570(2) is enlivened by the defendants’ conduct. There will be no order as to costs.
SCHEDULE OF PARTIES
S CI 2016 02556
BETWEEN:
| PENTRIDGE VILLAGE PTY LTD (IN LIQUIDATION) (ACN 087 151 068) | First Plaintiff |
| WEST HOMES AUSTRALIA PTY LTD (RECEIVERS AND MANAGERS APPOINTED) (ACN 004 964 185) | Second Plaintiff |
| LEIGH CHIAVAROLI | Third Plaintiff |
| - and - | |
| CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION | First Defendant |
| BILL OLIVER | Second Defendant |
| JOHN SETKA | Third Defendant |
| IVAN DADIC | Fourth Defendant |
| | |
| ANTON SUCIC | Sixth Defendant |
| GERALD BENSTEAD | Seventh Defendant |
| SHAUN REARDON | Eighth Defendant |
| | |
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