Rangi v K-Mart Australia Ltd (No.2)

[2018] FCCA 3622

FEDERAL CIRCUIT COURT OF AUSTRALIA

RANGI v K-MART AUSTRALIA LTD (No.2) [2018] FCCA 3622

Catchwords:
INDUSTRIAL LAW – Costs – where substantive application was summarily dismissed – where proceedings were instituted without reasonable cause – where the Applicant engaged in an unreasonable omission in failing to discontinue the proceedings despite invitation from the Respondent to do so – costs ordered.

Legislation:

Fair Work Act 2009 (Cth), ss.544, 570

Federal Circuit Court Rules 2001 (Cth), r.21.10, Sch.1

Limitation of Actions Act 1958 (Vic), s.5

Cases cited:

Henderson v City of Adelaide (No.2) [2012] FCA 9
Rangi v Kmart Australia Ltd [2018] FCCA 2040

Applicant: YUDHVIR RANGI

Respondent: K-MART AUSTRALIA LTD

File number: MLG 345 of 2017

Judgment of: Judge Hartnett

First judgment: 26 July 2018

Submissions as to costs last filed: 27 August 2018

Delivered at: Melbourne

Costs Judgment delivered on: 7 December 2018

REPRESENTATION

The Applicant: In Person

Counsel for the Respondent: Mr McKenney

Solicitor for the Respondent: Ms De Marchi, in-house lawyer for Kmart Australia Ltd

ORDERS

1. The Applicant pay the costs of the Respondent fixed in the sum of $13,192.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 345 of 2017

YUDHVIR RANGI

Applicant

And

K-MART AUSTRALIA LTD

Respondent

REASONS FOR JUDGMENT

1. On 22 February 2017, the Applicant made an application in the Fair Work Division of the Court wherein the Applicant alleged contravention, by the Respondent, of a general protection under the Fair Work Act 2009 (Cth) (‘the Act’). The procedural background of the matter is as otherwise described in paragraphs 1 to 8 of Rangi v Kmart Australia Ltd [2018] FCCA 2040 (‘the judgment’).

2. On 16 August 2017 the Respondent filed an application in a case seeking the following orders:-

   “1. Pursuant to s.17A of the Federal Circuit Court of Australia Act 1999 and/or rule 13.10 of the Federal Circuit Court Rules 2001 summary judgment be given for the Respondent by way of dismissal of the Applicant's Applications dated 19 February 2017 and his Amended Points of Claim (undated) and filed on 18 May 2017 on the grounds that the Applicant prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim and/or the proceeding or claim for relief is an abuse of the process of the Court (see Response and Defence both dated 22 June 2017 filed by the Respondent).

   2. Declarations be made by the Federal Circuit Court of Australia pursuant to s.16 of the Federal Circuit Court of Australia Act 1999 in accordance with 1 above.

   3. The Applicant pay the costs of and incidental to the Respondent’s Application in a Case pursuant to s.570 of the Fair Work Act 2009 and in relation to the proceeding generally on the following alternative bases:

   (a) The Applicant instituted the Proceeding MLG 345/2017 without reasonable cause; and/or

   (b) The Applicant engaged in an unreasonable act by instituting the Proceeding MLG 345/2017; and/or

   (c) The Applicant unreasonably omitted to discontinue the Proceeding MLG 345/2017 after the Respondent drew to the Applicant's attention:

   (i) the fundamental legal and factual deficiencies in the Applicant’s claim, including that the claims in contract are statute barred; and

   (ii) the fact that the Respondent would incur costs by bringing this Application in a Case in the event that the Applicant did not discontinue Proceeding MLG 345/2017;

   4. Such further or other orders as the Court deems fit.”

3. The Applicant sought not only dismissal of that application in a case but additionally, a costs order.

4. The Court delivered judgment on 26 July 2018 and ordered the following:-

   “1. Pursuant to s.17A(2) of the Federal Circuit Court of Australia Act 1999 (Cth) there be judgment for the Respondent against the Applicant in respect of the whole application filed on 22 February 2017.

   2. The Respondent file and serve any further submissions as to costs and quantum of costs within 14 days hereof.

   3. The Applicant file and serve submissions as to costs and quantum of costs within 14 days of service upon the Applicant of the Respondent’s submissions as to costs.

   4. The Respondent file and serve further submissions in reply if any, within 7 days of service upon the Respondent of the Applicant’s submissions.”

5. The Applicant and Respondent filed submissions as to costs on 20 August 2018 and 9 August 2018, respectively. The Respondent filed further submissions in reply on 27 August 2018. 

Consideration

1. The Court may, in its discretion, make a costs order, if the conditions set out in s.570(2) of the Act are met.

2. Section 570 of the Fair Work Act 2009 (Cth) is as follows:-

   “FAIR WORK ACT 2009 - SECT 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) or section 569 or 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.”

1. The Respondent submits that the Court should order the Applicant pay costs pursuant to s.570(2)(a) and (b) of the Act.

2. The Respondent submits firstly that the proceedings were instituted “without reasonable cause”. The Respondent submits that as a result the Respondent was obliged to incur costs in responding to a proceeding which the Court was likely to dismiss.

3. In relation to the contractual claims of the Applicant, the Respondent submits that no cause of action was available to the Applicant given s.544 of the Act and s.5 of the Limitation of Actions Act 1958 (Vic). The continuation of such a cause of action amounted to an abuse of process by the Applicant. The Court found that at the time of instituting the proceedings, the Applicant had no reasonable prospect of successfully prosecuting the matter. The Court concluded that there were neither material facts nor evidence of sufficient quality adduced by the Applicant that would militate against summary judgment being awarded. Nor was there a linkage between the allegations made and the alleged breaches, raising a question of law warranting the matter going to trial.[1]

   [1] Henderson v City of Adelaide (No.2) [2012] FCA 9, 56-58.

4. Further, and alternatively, the Respondent relied upon s.570(2)(b) of the Act in support of its application that the Applicant pay the Respondent’s costs. The Respondent submitted that the Applicant engaged in an unreasonable act and/or omission in failing to discontinue the proceedings despite the invitation from the Respondent’s solicitor to do so, prior to the filing of the application in a case by the Respondent in August 2017 seeking summary dismissal of the proceeding. In that regard the Respondent referred to the response filed on 22 June 2017 (which is referred to at paragraph 6 of the judgment) and its correspondence dated 5 July 2017 (which is referred to at paragraph 7 of the judgment) which as the Court noted, was never responded to.

5. The Applicant’s failure to withdraw the proceeding in July 2017,  in circumstances where no costs would have been sought by the Respondent despite the proceeding having been instituted without reasonable cause, does amount to an unreasonable act or omission on the part of the Applicant which “caused the other party to incur the costs”.

6. Indemnity costs are sought by the Respondent. In the exercise of the Court’s discretion an indemnity costs order will not be made. The Respondent in the alternative, seeks the payment of costs and disbursements by the Applicant in accordance with r.21.10 of the Federal Circuit Court Rules 2001 (‘Rules’).

7. The Court determines that, unusually in these type of proceedings, a costs order should be made and by specific reference to s.570(2)(a) and (b) of the Act. In all the circumstances a costs order is the appropriate sanction and on the usual basis of party/party costs. The quantum of costs and disbursements sought on a party/party basis and to be paid by the Applicant to the Respondent is $8,614.50. This quantum is referable to the Schedule 1 Scale of Costs as set out in the Rules (‘the scale’). The scale is however subject to a discretion exercised by the Court as to the award of further costs for work done not quantified in the scale. The Respondent has been required to prepare submissions as to costs for which the Court shall make a further allowance in the sum of $1,000. Additionally, the quantum as claimed omits some work done. The Court’s calculation of costs is as follows:-

   a)$4,584.50 in accordance with item 1 of the scale;

   b)$3,480 in accordance with item 3 of the scale;

   c)$3,079 in accordance with item 5 of the scale;

   d)$598 in accordance with item 9 of the scale; and

   e)$450 in accordance with item 13 of the scale in relation to the hearing of 16 August 2017.

8. Thus, the total sum of costs to be awarded is $13,192.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Hartnett

Associate: 

Date:  7 December 2018