Rangi v Action Workforce Pty Ltd and Ors (No.2)
[2020] FCCA 428
•28 February 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| RANGI v ACTION WORKFORCE PTY LTD & ORS (No.2) | [2020] FCCA 428 |
| Catchwords: INDUSTRIAL LAW – COSTS – Fair Work proceedings – consideration of s.570(2)(a) of the Fair Work Act 2009 – whether the Applicant instituted proceedings without reasonable cause – determined that six of seven issues for determination by the Court were instituted without reasonable cause – Applicant seeks declaration against an entity not a party to the matter – declaration not made – costs ordered against the Applicant – costs calculated on scale. |
| Legislation: Fair Work Act 2009 (Cth), ss.345, 570 Federal Circuit Court of Australia Act 1999 (Cth), s.16 |
| Cases cited: Rangi v Action Workforce Pty Ltd & Ors [2019] FCCA 3370 |
| Applicant: | PREM LATA RANGI |
| First Respondent: | ACTION WORKFORCE PTY LTD |
| Second Respondent: | ADVANCE MIX PTY LTD |
| Third Respondent | PAUL RIXON |
| File Number: | MLG 629 of 2018 |
| Judgment of: | Judge Blake |
| Hearing date: | Determined on the papers |
| Date of Last Submission: | 19 December 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 28 February 2020 |
REPRESENTATION
| Advocate for the Applicant: | Mr Rangi |
| Solicitors for the Applicant: | Rangi Lawyers |
| Counsel for the Respondents: | Mr A Denton |
| Solicitors for the Respondents: | Mark Diamond & Associates |
ORDERS
The Applicant pay the Respondents’ costs fixed in the amount of $22,913 within 30 days of this Order.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 629 of 2018
| PREM LATA RANGI |
Applicant
And
| ACTION WORKFORCE PTY LTD |
First Respondent
| ADVANCE MIX PTY LTD |
Second Respondent
| PAUL RIXON |
Third Respondent
REASONS FOR JUDGMENT
Introduction
On 21 November 2019, I delivered judgment in Rangi v Action Workforce Pty Ltd & Ors [2019] FCCA 3370. I made orders that the Application filed on 13 March 2018 be dismissed. I also made orders that permitted the Respondents to file an application in respect of costs incurred by them and for any such application to be determined on the papers.
By Application in a Case filed on 2 December 2019, the Respondents seek an order for costs against the Applicant fixed in the sum of $68,433.64. The Application in a Case was supported by an affidavit of Mark Diamond, solicitor, and also written submissions and submissions in reply.
In its Response filed on 16 December 2019, the Applicant opposes the making of a costs order and seeks, among other things, a declaration that the issues between the Applicant and a party described as Action MMX Pty Ltd, have not been decided by the Court. The Response was supported by an affidavit of the Applicant and written submissions.
Neither party requested a further oral hearing at the time of, or following the filing of, written submissions.
There are two issues for determination. First, whether Respondents should recover some or all of their costs. Second, whether the Court should issue the declaration sought by the Applicant.
For the reasons that follow, I have decided to award costs to the Respondents in the sum of $22,913. I have also decided not to issue the declaration sought by the Applicant.
The Application for Costs
The Initiating Application in this matter sought relief under the Fair Work Act 2009 (‘Act’). Accordingly, the Court is required to consider the application for costs having regard to section 570 of the Act.
The application for costs is made specifically having regard to section 570(2)(a) of the Act. The operation of section 570 of the Act and the principles relating to its application were recently summarised by Steward J of the Federal Court of Australia in Rangi v Kmart Australia Ltd(No.2) [2019] FCA 2083. I respectfully adopt the observations and reasoning of Steward J at [2] and [3] of His Honour’s decision. To those comments I would add the observation that an applicant for costs in a proceeding, under the Act, faces a high threshold to recover costs having regard to the operation of section 570 of the Act.
The Respondents submit that a costs order should be made in their favour on the following grounds. First, four of the seven topics set out in the List of Issues that the Court was required to determine were bound to fail on the Applicant’s own version of events. This arose, among other things, from the Applicant’s failure to properly identify her employer when pursuing her adverse action claims. Second, two out of the seven topics in the List of Issues were bound to fail on the Applicant’s own version of events because she either failed to identify or link a cause of action to her complaints, or failed to properly identify the relevant respondent to the action. Third, the Applicant failed to identify any of the elements of coercion relating to an allegation made on 24 October 2017, and failed to identify any statement said to constitute a misrepresentation that would otherwise breach of section 345 of the Act.
The Applicant, in her written submissions, urges the Court not to make an order for costs. She does so for reasons that include the following. First, as the hearing proceeded to address the List of Issues, and not the pleadings, it is not possible to assess the reasonableness of the cause of action by reference to the pleadings. Second, her failure to identify the correct employer as a party to the proceeding was a mistake, and the Respondents did not challenge or clarify the evidence on this. Third, in respect of many of the issues before the Court, there was a real question of fact and law to be determined, and there was real complexity to some of the scenarios before the Court. Fourth, the fact that the Applicant did not conduct the litigation as efficiently as possible does not mean the proceedings had no reasonable prospect of success at the time of their institution. Finally, even if the Court were to find that the Applicant had acted without reasonable cause, the Court should exercise its discretion to refrain from ordering costs in any event.
I respectfully do not agree with the Applicant’s contention that the proceedings were instituted with reasonable cause. I hold this view for the following reasons.
A very significant issue in the proceeding was whether the Applicant had correctly identified her employer for the purposes of claims she wished to pursue. This is a matter to which I gave detailed attention in my reasons for decision in the substantive judgment. It may be that the Applicant was initially mistaken as to the correct identity of her employer. For the reasons set out in the substantive judgment, however, any misapprehension about the true identity of the Applicant’s employer could not have persisted after the Respondents filed their defence. That document made clear, very early in the proceedings, who the employer of the Applicant was. As I noted in the substantive judgment, despite being put clearly on notice of this fact, the Applicant did nothing to address it.
The Applicant’s failure to address what amounted to a fundamental issue in the proceeding had grave consequences for a number of her claims, most particularly, the adverse action claims identified in the List of Issues. Those claims ultimately could not succeed because adverse action was alleged against a party that was not the Applicant’s employer.
When this matter is considered, it can be readily seen that the Applicant’s case in respect of her adverse action claims was bound to fail.
There is then the issue of the trial proceeding by way of the List of Issues. In my view, the fact that the trial proceeded by way of determining the List of Issues does not mean that the Respondents are not entitled to an order for costs. A List of Issues is a tool that is often used in this and other courts to provide clarity as to the issues a Court is required to determine. Such lists are commonly drawn from the foundational documents, being the pleadings, or the Application and Response, that form the initiating process. Further, such lists are commonly the product of discussion between an applicant and a respondent. In these circumstances, I am not prepared to accept the submission that because a List of Issues was ordered, it acts as a bar to a party obtaining a costs order.
There are then the Applicant’s claims relating to her pay being frozen, and to her being bullied and harassed. At paragraphs [63] to [66] of the substantive judgment, I made a number of findings about the claim in relation to the Applicant’s pay being frozen. It is apparent, when regard is had to my earlier findings, that this was a claim instituted without reasonable cause.
A similar conclusion must be reached in relation to the claims of bullying and harassment. At paragraphs [112] to [115] of the substantive judgment, I dealt with these claims. I do not repeat my earlier findings here but rely on them. When regard is had to those findings, it is clear that, among other things, what the Applicant failed to do was to link any complaint of bullying or harassment to a cause of action. The Applicant’s failure to do this, in my view, leads to the conclusion that these too were claims instituted without reasonable cause.
Finally, the Applicant made a number of claims arising from a letter dated 24 October 2017. I am prepared to accept that there was some degree of complexity about the claims the Applicant made in respect of this letter. Most notably, the divergence in some of the authorities in relation to whether an employee is able to make a complaint or enquiry in relation to the employment. I am therefore satisfied there was a reasonable basis for instituting this claim.
When the above matters are considered, the following becomes apparent. There were seven topics in the List of Issues. In my view, six of those topics dealt with claims that were bound to fail and were claims made without reasonable cause. Only one of those topics could be said to have been made with reasonable cause.
It follows from what I have said above that it is open to the Court to make an order for costs under section 570(1) of the Act. This is because the Court is satisfied that the Applicant instituted a significant proportion of the proceedings without reasonable cause.
The Application for a Declaration
The declaration sought by the Applicant in her Response is as follows:
‘Declaration that the issues between the Applicant and the First Respondent, Action MMX Pty Ltd & the Third Respondent have not been decided by the Court’.
It is difficult to discern from the material the basis upon which the above declaration is sought. The clearest articulation (in the circumstances) of why this declaration is sought is set out at paragraph [4] of the Applicant’s affidavit affirmed 16 December 2019 that accompanied the Response. There, she states as follows:
‘The Respondents did not raise the issue of misjoinder/non-joinder of parties even at the time of framing issues (which were framed by the respondents), due to which many of the issues were not decided, hence, I am seeking a declaration that the issues between the Applicant and the First Respondent, Action MMX Pty Ltd & the Third Respondent had not been decided by the Court’.
While the Court has the power to make a declaration of right under section 16 of the Federal Circuit Court of Australia Act 1999, I will not make one in the present matter.
First, I do not accept the factual premise advanced by the Applicant in support of the declaration. As I have already indicated in this judgment, and in the earlier substantive judgment, the Respondents squarely raised early in the proceedings the issue of whether the Applicant had correctly identified her employer. The Applicant took no steps to address this issue. I do not propose now to potentially permit the Applicant to agitate a claim that ought to have properly been brought much earlier than after judgment has been delivered.
Second, the declaration requires me to make an order against an entity that is not even a party to the present proceedings. I very much doubt that I have the power to make such an order. Even if such power did exist, it could only reasonably be exercised after granting to that party an opportunity to be heard. Procedural fairness requires that much.
Third, insofar as the declaration is sought against Action MMX Pty Ltd, relief of this type can only be sought in respect of determining a justiciable controversy. It is not immediately apparent to me just what such controversy would be in the present circumstances.
For all of the above reasons, I decline to grant the relief sought by the Applicant.
What are the costs that ought to be paid by the Applicant?
The Respondents seek payment of their legal costs in the sum of $68,433.64. The affidavit of Mr Diamond attaches a summary of the invoices issued by Mr Diamond’s firm to the Respondents.
I have a number of reservations about the quantum of the costs sought to be recovered. This is not to say that the costs sought are necessarily excessive. At the outset, I accept that a two-day trial, with Counsel, dealing with the number of issues that this matter raised, may well result in legal costs in the amount claimed by the Respondents. Such costs may well be reasonable. However, what I have been provided with is simply a summary of the invoices. Costs have not been itemised. No breakdown has been provided. There is no indication of any attempt to assess costs by reference to the Federal Circuit Court Rules 2001 (‘Rules’), or any other applicable scale.
Further, as I have indicated earlier, while the overwhelming majority of the Applicant’s claims were instituted without reasonable cause, at least one claim was instituted with reasonable cause. No adjustment appears to have been made for this.
The Rules permit the Court when ordering costs to, among other things, set the amount of the costs, or set the method by which the costs are to be calculated. Further, Schedule 1 to the Rules sets out on a scale, among other things, the amounts to be awarded in general federal law matters in this Court.
In my view, having regard to the reservations I have expressed earlier, I intend to fix an amount of costs in this matter and to do so by reference to the scale of costs set out in Schedule one (‘Scale’). It is an approach consistent with the Rules. The lesser amounts recoverable under the Scale also provide an appropriate adjustment that recognises that the entirety of the claim was not pursued without reasonable cause. The Court’s calculation of costs is therefore as follows:
a)$2,992 in respect of item 1 of the Scale, $305 (short mention) in respect of the first return (being item 13 of the Scale) and $152.50 in respect of item 12 of the Scale totalling $3,449.50;
b)$10,111 in respect of item 7 of the Scale for preparing the matter for trial;
c)$2,241 in respect of item 12 of the Scale being the advocacy loading for two days;
d)$4,482 in respect of item 13 of the Scale being the daily hearing fee for two days of hearing;
e)$610 in respect of item 9 of the Scale for attendance at judgment and advocacy loading of $152.50;
In addition to the above, the Respondents have prepared an affidavit and submissions as to costs. The Court will make a further allowance for this in the amount of $1,867, which is in reference to item 3 of the Scale.
Accordingly the quantum of costs to be paid by the Applicant to the Respondents is $22,913.
I will order that the amount of costs be paid by the Applicant to the Respondents within 30 days of the date of this order.
I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of Judge Blake
Associate:
Date: 28 February 2020
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