R v Patrick Projects Pty Ltd (No 2)

The respondents in this case sought indemnity costs against the applicants in accordance with section 570(2) of the Fair Work Act 2009 (Cth) and section 43 of the Federal Court of Australia Act 1976 (Cth). The applicants had previously pursued their claim in the Fair Work Commission, which was unsuccessful, and they then sought leave to appeal to the Full Bench of the Fair Work Commission. Leave was refused, and the Full Bench held that the applicants’ appeal was without merit. The applicants subsequently instituted proceedings in the Federal Court based on the same legal and factual dispute that had been determined by the Fair Work Commission. The respondents considered the applicants’ claim to lack reasonable cause and be an abuse of the court's processes. The court was required to decide whether the applicants' proceedings were instituted without reasonable cause, and whether indemnity costs should be awarded to the respondents.

The court examined the relevant legal principles, which included that the purpose of section 570 of the Fair Work Act is to ensure that litigants are not deterred from defending claims for contravention, and that a party must have a self-evidently weak case to warrant a costs order. The court also noted that even if the court is satisfied of a section 570(2) precondition, it retains a discretion not to order costs. The court further found that courts have accepted that cost orders made pursuant to section 570(2)(a) of the Fair Work Act and which relate to proceedings instituted "without reasonable cause" are not restricted to exceptional cases.

In this case, the applicants were given approximately five months to re-plead their claim, which then became the subject of the respondents’ successful strike-out application. The respondents successfully demonstrated that the applicants’ case was so untenable that it could not possibly succeed. The court found that the applicants’ claim was hopeless and would have no chance of success if the action were to proceed to hearing. The court also found that, under rule 16.21(f), the proceeding was an abuse of process given the history of the proceedings and, in particular, the fact that the applicants’ claims had failed before the Fair Work Commission and the Full Bench had refused permission to appeal.

The court ordered that the applicants pay the respondents’ costs of the application on an indemnity basis.