Rybinski v Geocore Pty Ltd (No 2)
[2024] FedCFamC2G 644
•7 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Rybinski v Geocore Pty Ltd (No 2) [2024] FedCFamC2G 644
File number: MLG 1411 of 2023 Judgment of: JUDGE FORBES Date of judgment: 7 August 2024 Catchwords: FAIR WORK –- application for imposition of civil penalties for contraventions of the Fair Work Act 2009 (Cth) – consideration of relevant factors – where conduct appears deliberate or recklessly indifferent – need for deterrence - totality – penalties ordered
FAIR WORK - application for costs – applicant seeks indemnity costs – where applicant forced to commence proceedings to enforce contraventions – where respondents have not engaged in any proceedings – consideration of conduct of the respondents – whether indemnity costs appropriate – where non-participation of respondents meant that applicant met with no resistance – respondent to pay costs on scale
Legislation: Fair Work Act 2009 (Cth) s 44, 527, 536, 550, 570, 577 Cases cited: ABCC v CFMEU [2019] FCAFC 36
Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194
Australian Building and Construction Commissioner v Pattinson [2022] HCA
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225
Commonwealth of Australia v Construction, Forestry, Mining and Energy Union (2003) 129 FCR
Crawford v Geocore Pty Ltd [2024] FedCFamC2G 176
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Raimondi Investments Pty Ltd [2016] FCCA 1398
Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832
Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258
Fair Work Ombudsman v WCH Services Pty Ltd & Anor [2018] FCCA 1876
Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484
Kelly v Fitzpatrick [2007] FCA 1080
Meadley v Sort Worx Pty Ltd [2013] FCA 1012
Murdock v Virgin Australia Airlines Pty Ltd (No 3) [2024] FCA 227 Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115
Payne v Secure Melbourne Protective Services Pty Ltd (No 2) [2023] FCA 1579
Ryan v Primesafe [2015] FCA 8
Rybinski v Geocore Pty Ltd [2024] FedCFamC2G 177
Saxena v PPF Asset Management Ltd [2011] FCA 395
Schell v Ensign Australia Pty Ltd [2015] FWC 8825
Trade Practices Commission v CSR Ltd [1990] FCA 521
Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190
Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32
Division: Division 2 General Federal Law Number of paragraphs: 64 Date of hearing: On the papers Place: Melbourne Solicitor for the Applicant: Mr Sherr & Mr Jackson, Sparke Helmore Lawyers Respondents: No appearance ORDERS
MLG1411 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: KELLIE RYBINSKI
Applicant
AND: GEOCORE PTY LTD
First Respondent
AMANDA BROWN
Second Respondent
ORDER MADE BY:
JUDGE FORBES
DATE OF ORDER:
7 AUGUST 2024
THE COURT ORDERS THAT:
1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the First Respondent pay a pecuniary penalty of $60,000 for its contraventions of sections 44, 527 and 536 of the FW Act.
2.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the Second Respondent pay a pecuniary penalty of $12,500 by reason of her involvement in the First Respondent’s contraventions of sections 44, 527 and 536 of the FW Act.
3.The penalties ordered in Orders 1 and 2 be paid to the Applicant.
4.The First and Second Respondent pay the Applicant’s costs on a standard basis in accordance with the scale prescribed in the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) as at the date of hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE FORBES
INTRODUCTION
The applicant in this matter, Ms Rybinski, seeks the imposition of a pecuniary penalty against the respondents for contravening the following civil penalty provisions of the Fair Work Act 2009 (Cth) (FW Act):
(a)section 44 by failing to pay the applicant an amount to satisfy her entitlement to accrued but untaken annual leave and annual leave loading upon the end of her employment as required by section 90 of the FW Act (the annual leave contravention);
(b)section 536(3) by providing the applicant with a payslip which was false or misleading in a material particular (the pay slip contravention); and
(c)section 527 by failing to comply with an order made by the Fair Work Commission (the FWC order contravention).
Penalties are sought against the first respondent Geocore Pty Ltd as the former employer of the applicant and against the second respondent Amanda Brown by reason of her involvement in the first respondent’s contravention. Pursuant to s 550 of the FW Act, a person found to have been involved in a contravention is to be treated as if that person had contravened the Act him/herself.
The applicant also seeks an order that the respondents pay her costs on an indemnity basis.
The relevant background to this penalty and costs application is contained in the reasons for the default judgment, Rybinski v Geocore Pty Ltd [2024] FedCFamC2G 177. These reasons assume a familiarity with that background.
In short, on 1 February 2024 I delivered judgment in default against the respondents, finding that Geocore and Ms Brown had separately contravened the abovementioned provisions. As well as entering judgment, I also ordered the first and second respondents to pay compensation to the applicant for the amounts claimed in her statement of claim. I further ordered the parties to file and serve any submissions on the issues of penalties and costs, which I would then determine on the papers.
For reasons unknown, the respondents have not engaged with the litigation at any point during the course of proceedings. They have not defended the claims and did not file any submissions on costs or penalties, despite being afforded the opportunity to do so.
Having considered the applicant’s written submissions, and for reasons are set out below, I have decided to impose a penalty of $60,000 on the First Respondent for its contraventions of the FW Act and $12,500 on the Second Respondent for her involvement in those contraventions.
I have decided that an order for costs should be made and that the respondents should be jointly and severally be liable for the applicant’s costs, calculated in accordance with schedule 2 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules).
PENALTY
At the relevant time, the maximum penalty for a single contravention of each of sections 44, 527 and 536 of the FW Act was:
(a)$82,500 for a corporation; and
(b)$16,500 for an individual respondent.
The applicant seeks the imposition of penalties in the range of $132,000 to $152,625 against the first respondent and $26,400 to $30,525 against the second respondent for their contraventions of ss 44, 527 and 536. This amounts to an overall penalty of 53-62% of the maximum penalties against each respondent.
Ms Rybinksi seeks that the penalties be paid to her within 28 days or such further period that the Court determines appropriate. The applicant submits that it is appropriate for the penalties to be paid to her where, but for her persistence in bringing the proceedings, the contravening conduct of the respondents would not have been revealed.
Applicable legal principles
It is well-established that the primary purpose of a civil penalty is to promote “the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act”[1]. The factors discussed below must be considered in this context.
[1] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [9], [15]
As was held in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [40] – [41]:
“The discretion conferred by s 546 is, like any discretionary power conferred by statute on a court, to be exercised judicially, that is, fairly and reasonably having regard to the subject matter, scope and purpose of the legislation.
[…] s 546 requires the court to ensure that the penalty it imposes is “proportionate”, where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity.”
The considerations deemed relevant to the Court’s task in assessing the gravity and seriousness of offending and thus the appropriateness of any penalty include[2]:
[2] Trade Practices Commission v CSR Ltd [1990] FCA 521 at [42]; see also Pattinson at [18]; Kelly v Fitzpatrick [2007] FCA 1080 at [14]
(a)circumstances in which the conduct took place;
(b)the nature and extent of any loss or damage sustained as a result of the breach;
(c)whether there has been similar previous conduct by the respondent;
(d)whether the breach was properly distinct or arose out of one course of conduct;
(e)the size of the business enterprise involved;
(f)whether or not the breach was deliberate;
(g)the involvement of senior management in the breach;
(h)whether the party committing the breach has shown contrition;
(i)whether the party committing the breach has taken corrective action;
(j)whether the party committing the breach has cooperated with enforcement authorities;
(k)the need to ensure compliance with minimum standard by provision of an effective means for investigation and enforcement of employee entitlements; and
(l)the need for specific and general deterrence.
The above factors are not to be treated by the Court as a “rigid catalogue”[3], but as a useful guide to determining penalties in all the circumstances of a particular case.
[3] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [91]
Deterrence
When considering the need for deterrence, the Court must take into account both general deterrence, being deterrence against the community at large for other would be or like-minded contraveners, and specific deterrence, being deterrence against the contravener themselves[4].
[4] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2018) 262 CLR 157 at [116]
General
Ms Rybinski submits that there is a high need for general deterrence in this matter, particularly in relation to the FWC order contravention. She submits that the regime established by the FW Act to address adverse consequences of an unlawful stand down has been fundamentally undermined by the respondents[5]. The applicant adopts the observation of Tracey J in Meadley v Sort Worx Pty Ltd [2013] FCA 1012 at [45] where his Honour observed that “an employer is not entitled unilaterally to determine to ignore an order made by the Commission. This was not a case in which the employer was unable to meet its obligations; it simply chose not to do so […]”.
[5] Schell v Ensign Australia Pty Ltd [2015] FWC 8825 at [22]
The annual leave contravention is a breach of the NES. The applicant submits that the respondents’ breach deprived her of a most basic entitlement to which she has a statutory right to enjoy. There is a clear public benefit in deterring other employers from engaging in the same or similar conduct.
The pay slip contravention also attracts the need for general deterrence, a pay slip being a document which allows employees “to understand how their pay is calculated, to obtain independent advice concerning their entitlements and identify errors or misunderstandings for easy rectification”[6].
[6] Applicant’s Outline of Submissions at [38]; Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258 at [67]; Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832 at [55]
Specific
Ms Rybinski submits that a meaningful sanction should be imposed to deter the respondents from being involved in similar breaches in the future. The applicant submits that penalties are appropriate because:
(a)the respondents failed to engage with proceedings at any stage;
(b)the respondents have not taken any steps to rectify the underpaid entitlements owed to the applicant since the commencement of proceedings;
(c)the Court should infer that the respondents have little regard for the FW Act and are liable to engage in such conduct again in the future;
(d)the Court has determined in both Ms Rybinski and Ms Crawford’s matter[7] that the respondents contravened ss 44 and 527, demonstrating a propensity towards engaging in this conduct; and
(e)the applicant has seen no consequences for the respondents’ repeated disregard for the FW Act and the law, enhancing the need for a large penalty.
[7] Crawford v Geocore Pty Ltd [2024] FedCFamC2G 176
Nature, circumstances and deliberateness of conduct
In relation to the annual leave contravention, Ms Rybinski gave evidence that the respondents attempted to access and run down her leave balance after she was unlawfully stood down[8]. She submits that the Court should infer from this conduct that the respondents intended to unlawfully reduce her accrued annual leave entitlement. Further, there was no partial payment to Ms Rybinski or any misunderstanding regarding the annual leave to be paid out. The respondents failed to pay Ms Rybinski anything in respect of this entitlement.
[8] Affidavit of Kellie Rybinski dated 16 November 2023 (Rybinski Affidavit) at [18], Annexure KR - 2
The applicant on several occasions, both personally and through her lawyers, sought payment in relation to her entitlements[9], but all requests were ignored. Thus, it is submitted that the first respondent’s failure to pay annual leave and the second respondent’s involvement can only be regarded as deliberate.
[9] Rybinski Affidavit at [44] – [45], Annexure KR – 13, Annexure KR – 14; Affidavit of Kristina Sianidis Singh dated 16 November 2023, Annexure KS – 3
Regarding the pay slip contravention, the applicant submits that the breach occurred after the applicant was unlawfully stood down and not paid for over two weeks. The pay slip contravention involved a complete falsehood which must have been known to the respondents.
In respect of the FWC order contravention, Ms Rybinski submits[10]:
(a)the respondents were aware of the initial FWC proceedings and chose not to engage;
(b)the respondents were aware of the FWC Order and chose not to comply; and
(c)compliance with the FWC Order was easily effected – it simply required the first respondent to cease its unlawful stand down of the applicant and return her to work. There was no reason why the respondents could not comply with the FWC Order.
[10] Applicant’s Outline of Submissions at [22]
In the absence of any explanation from the respondents as to why they engaged in the contraventions, the applicant invites the Court to find that the respondents’ actions were deliberate.
Involvement of senior management
In the substantive judgment I accepted that the second respondent, Ms Brown, was the director and controlling mind of Geocore, and thus an accessory to each of the contraventions. I therefore accept the applicant’s submission that senior management was directly involved in the contraventions.
Nature and extent of loss
The total loss sustained by the applicant as a result of the contraventions was $16,344.01, which Ms Rybinski submits should be regarded as a large sum for a low-level employee. She also deposes to various mental health impacts and disillusionment with the Fair Work system, which favours the imposition of a higher penalty.
Size of business
There is no direct evidence before the Court regarding the size of the business, but I infer that Geocore is relatively small in size.
Corrective action and cooperation
As mentioned above, Geocore and Ms Brown have failed to engage in proceedings and have not taken any steps to correct the contraventions. They have not displayed any remorse or contrition for their actions.
Compliance with minimum standards
The applicant submits that each of the respondents’ contraventions offend against the minimum standards provided by the FW Act. In this matter, the respondents acted contrary to the purpose of the FW Act, which is to provide a guaranteed set of fair, relevant and enforceable terms and conditions of employment and protect the applicant’s ability to enforce these standards. Ms Rybinski contends that the respondents’ failure to comply with the FWC order goes against the basic concept of the rule of law[11], and that the respondents should be penalised appropriately.
[11] Fair Work Ombudsman v Raimondi Investments Pty Ltd [2016] FCCA 1398 at [29]
Conclusion on penalty
The applicant seeks penalties in the range of $132,000 to $152,625 for the first respondent and $26,400 to $30,525 for the second respondent for contravening ss 44, 527 and 536. This amounts to an overall penalty of 53-62% of the maximum available penalties. In my view the penalties sought by the applicant are excessive and do not strike a proper balance between deterrence and oppressive severity.
In determining the penalties to be ordered against the respondents, this Court must have regard to the totality of the contravening conduct to ensure that any penalty ordered is not crushing or oppressive[12].
[12] Pattinson at [110]
The applicant submits, and I accept, that there is no evidence before the Court about the respondents’ financial capacity and therefore no way of assessing what might be crushing or oppressive to them. However, I infer from the evidence that the business was relatively small and that it was not trading as it had prior to the death of the second respondents husband.
There is no evidence before the Court that the respondents or either of them have a prior history of offending. I therefore assess penalty on the premise that the respondents are first time offenders and should be afforded some leniency in that regard.
The respondents have done themselves no favours by not engaging in the proceedings or offering any explanation for their conduct. By placing their head in the sand and choosing not to engage with the allegations against them, the respondents invite the Court to infer that they have no defence and that their conduct has been wilful.
The overall impression from the facts presented by the applicant, is that the respondents adopted a course of action which was wilfully blind to the legal obligations they were bound to observe. The order of the Fair Work Commission was simply ignored and the respondents took matters into their own hands, believing that the employee was guilty of some act of misconduct. This was not a case in which the employer was unable to meet its obligations; it simply chose not to do so. This was a serious contravention and the need for general deterrence weighs as a heavy consideration in fixing penalty.
It seems to me that there is no proper basis for grouping the contraventions as arising from a single course of conduct[13]. Each of the contraventions required a separate and distinct decision on the part of the respondents not to comply with a statutory obligation. The non-compliance with the Fair Work Commission order, the failure to pay the applicant her accrued annual leave entitlement and the provision of a false payslip stand as separate contraventions of the FW Act. It might be said there is a commonality in the offending in that the contraventions all involved the employment of the applicant and they occurred as a sequence of events after the stand down decision. However, identifying a single motive for commission of separate offences will rarely be sufficient to establish the same criminality in separate and distinct offending acts.
[13] Fair Work Act 2009 (Cth) s 577
My preliminary response to the evidence is that a penalty of up to 50% of the maximum would be appropriate for each of the three contraventions, which in the case of the first respondent would amount to a total penalty of $123,750 and a total penalty of $24,750 for the second respondent.
However, a final review of the aggregate penalties is necessary to determine whether it is an appropriate and proportionate response to the conduct which led to the contraventions[14]. The “totality principle” is designed to avoid injustice in the overall result when fixing penalties. The court must undertake a process of instinctive synthesis to arrive at the appropriate penalty after taking all relevant factors into account. In this regard I am mindful that the applicant is subject to a second proceeding by another employee which alleges similar contraventions for which the court will also impose penalties.
[14] Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 at [36]; Kelly v Fitzpatrick [2007] FCA 1080; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
In my view, in the circumstances of this case, the proper total penalty to be imposed against the first respondent is $60,000 and a total penalty of $12,500 against the second respondent for her involvement. The penalties should be paid to the applicant.
COSTS
Ms Rybinski also seeks an order for costs pursuant to sections 570(2)(b) and/or 570(2)(c) of the FW Act, as follows:
(a)$24,615.90 in respect of costs on an indemnity basis from 18 October 2023 to 1 February 2024 and party to party costs otherwise; and
(b)$1,245.00 in respect of disbursements.
By an affidavit filed by the applicant’s solicitor dated 15 February 2024[15], the Court has been informed that the applicant seeks a lump sum costs order fixed in the sum of $25,000 plus disbursements.
[15] Affidavit of Kristina Sianidis-Singh dated 15 February 2024
Legal principles
Section 570 of the FW Act states:
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;
b. or 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.
Ordinarily, in proceedings brought under the FW Act, costs will be borne by the party incurring them[16].
[16] Murdock v Virgin Australia Airlines Pty Ltd (No 3) [2024] FCA 227 (Murdock v Virgin Australia) at [3] (Burley J); Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115; Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194
In Ryan v Primesafe [2015] FCA 8, Mortimer J (as her Honour then was) said at [64]:
“[…] The policy behind s 570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants with genuine grievances and arguable cases so as to deter them from commencing proceedings. It is an access to justice provision. In relation to respondents, it is designed to ensure that they can pursue arguable legal and factual responses to the claims made against them.”
An order for costs is a departure from the usual rule. In an otherwise no-costs jurisdiction, the discretion to order costs must be exercised with caution[17]. A clear case for its exercise must be demonstrated. Even where the threshold is met, the Court retains a discretion.
[17] Murdock v Virgin Australia at [3] (Burley J); Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J)
The applicant for costs bears the onus of satisfying the Court that one or more of the criteria in s 570(2) are met. Determining whether a party acted unreasonably must be determined objectively according to the facts on a case by case basis[18].
[18] Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879
Indemnity costs
Where costs are awarded, the ordinary rule is that costs will be assessed on a party/party basis. To warrant a departure from the rule, there should be some “special or unusual feature in the case”[19]. Circumstances where indemnity costs may be awarded are where[20]:
(a)the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law;
(b)allegations were made which ought never to have been made; or
(c)there was undue prolongation of a case by groundless contentions.
[19] Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32 at [48]
[20] Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225, 233 at [5]; Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [17]
Consideration
Ms Rybinski submits that the following unreasonable actions caused her to incur costs:
(a)the respondents’ failure to comply with the FWC Order;
(b)the respondents’ failure to comply with the letter of demand dated 1 August 2023;
(c)the respondents’ failure to comply with the FCFCOA Rules relation to the filing of a response within 28 days after service;
(d)the respondents’ failure to comply with the September Orders; and
(e)the respondents’ failure to attend any hearing before this Court, or otherwise engage with the proceedings in any way.
This Court has previously concluded that a complete failure to engage in proceedings may constitute an unreasonable act. For example, in Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484, the Fair Work Commission (FWC) had determined a dispute and the respondents had failed to comply with the FWC order. The respondents gave no reason for not complying with the FWC order. This conduct “effectively forced the applicant to bring proceedings, despite there being no real dispute: such conduct is unreasonable as it wastes the applicant’s costs”[21]. Judge Riethmuller awarded costs to the applicant pursuant to 570 of the Act.
[21] Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484 at [35]
In Fair Work Ombudsman v WCH Services Pty Ltd & Anor [2018] FCCA 1876, the applicant sought costs under s 570(2)(b), or alternatively s 570(2)(c), in circumstances where the respondents failed to comply with a FWC order and did not engage in the proceedings before the FWC or the then Federal Circuit Court. Judge Hartnett (as her Honour then was) awarded costs to the applicant under s 570(2)(b) for the following reason at [55]:
“On an objective analysis of the circumstances, the Respondents’ conduct has not been what a reasonable person would expect, and has directly caused the Applicant to incur costs. The Respondents have been put on notice as to the costs application and have provided no response for the Court to consider. The Court is satisfied that the Respondents failure to pay the amount ordered by [the FWC] was unreasonable and has caused the Applicant to incur costs.”
Separately and additionally, the applicant argues that she is entitled to costs under s 570(2)(c). The applicant asserts that this ground is designed to encourage genuine participation in disputes and efficient resolution of proceedings[22] and to allow costs to be awarded against a party who unreasonably refuses to participate.
[22] Fair Work Bill 2008 Explanatory Memorandum at [2230]
The applicant states that the total costs incurred are as follows:
(a)since the statement of claim was filed, $36,388.90;
(b)since the time at which both respondents had been served, $34,511.90;
(c)since the time at which both respondents defaulted regarding filing and serving a Notice of Address for Service, $22,745.80;
(d)since the time at which both respondents defaulted regarding the filing and service of responses in accordance with the Court’s orders on 27 September 2023, $21,147.90; and
(e)since the filing of the Application, $12,645.90.
And the applicant claims reasonable disbursements as follows:
(a)$785 in Court fees to commence this proceeding;
(b)$460 in Court fees to file the Application; and
(c)$246.40 on process server costs to serve the commencing documentation and the Application.
The applicant submits that costs should be ordered as follows:
(a)on an indemnity basis with respect to the reasonable disbursements, being the amount of $1,245.00; and
(b)on an indemnity basis from 18 October 2023 until 1 February 2024 being the amount of ($21,147.90) and on a party to party basis otherwise. This amounts to a total of $24,615.90.
Conclusion on costs
The meaning of “unreasonable” is not capable of precise definition but is “inherently sensitive to context”[23]. Consideration should focus on the parties’ conduct, including the appropriateness of the court process undertaken by them, the timeliness of their compliance with court orders, steps taken in the proceeding and the existence of a substantial legal or factual basis for the claims made and arguments put[24].
[23] ABCC v CFMEU [2019] FCAFC 36 at [18]
[24] Ryan v Primesafe [2015] FCA 8 at [66]
I am satisfied that the respondents were aware of the proceedings before the Court and before the Commission. The respondents failed to participate in either proceeding. The respondents’ failure to comply with the orders of Commission necessitated the applicant’s application to this Court – she had no option but to do so. On an objective analysis of the circumstances, the respondents’ conduct has not been what a reasonable person would expect, and it has directly caused the applicant to incur costs. The applicant on the other hand has conducted the proceeding diligently.
I am satisfied in all the circumstances that the respondent’s conduct in failing to participate in the Fair Work Commission proceedings, failing to comply with the order of the Commission and failing to engage in the proceedings in this court are unreasonable acts and omissions which have caused the applicant to incur unnecessary costs. The respondents have been put on notice as to the costs application and have provided no response for the Court to consider. For present purposes, I am satisfied that s 570(2)(b) is engaged and that I should exercise my discretion to order costs.
However, in my view, the costs claimed by the applicant are excessive and not proportionate to the nature of the proceeding. True it is that the conduct of the respondents have caused the applicant to incur costs. However, the respondents’ non-participation in court proceedings meant that the application for default judgement and the application for a penalty and costs order were met with no resistance.
Unless otherwise ordered, costs of proceedings of this kind should be calculated in accordance with the scale prescribed in schedule 2 of the FCFCOA Rules. I am not satisfied that the facts of this case present an occasion for an order for indemnity costs.
DISPOSITION
Orders will be made that the first respondent pay a total penalty of $60,000 in respect of its declared contraventions of ss 44, 527 and 536.
Further, the second respondent, who I am satisfied was relevantly involved in the first respondent’s contraventions of ss 44, 527 and 536 will be ordered to pay a total penalty of $12,500.
The penalties referred to in the preceding paragraphs are to be paid to the applicant within 28 days of these orders. The applicant commenced and maintained the proceedings and but for her persistence in doing so, the respondents’ conduct would not have been subjected to judicial scrutiny. It is appropriate that the penalty be paid to her.
As to costs, I will order that the respondents pay the applicant’s costs of the proceeding, calculated in accordance with schedule 2 of the FCFCOA Rules.
I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Forbes. Associate:
Dated: 7 August 2024
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