Toomath v Inner Strength Steel Fixing (WA) Pty Ltd
[2011] FMCA 444
•9 June 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TOOMATH v INNER STRENGTH STEEL FIXING (WA) PTY LTD | [2011] FMCA 444 |
| INDUSTRIAL LAW – Costs. |
| COSTS – Applicant’s lawyers granted leave to withdraw – applicant not in attendance at hearing – whether unreasonable act or omission. |
| Fair Work Act 2009 (Cth), s.570(1) and (2) Fair Work Regulations 2009 (Cth), reg.3.42 Federal Magistrates Act 1999 (Cth), s.79(2) Federal Magistrates Court Rules 2001 (Cth), rr.9.03, 13.03C(1)(c) |
| Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 Hughes v Mainrange Corporation Pty Ltd (No. 2) (2009) 190 IR 351, (2009) FMCA 1044 Moon v JLG Industries [2011] FMCA 343 Pierson’s Pro-Health Pty Ltd v Silvex Nominees Pty Ltd & Ors (No 3) [2010] FMCA 250 Welsh v Allblend Holdings Pty Ltd (No 4) (2010) 196 IR 114; [2010] FMCA 521 |
| Applicant: | MICHAEL TOOMATH |
| Respondent: | INNER STRENGTH STEEL FIXING (WA) PTY LTD |
| File Number: | PEG 42 of 2011 |
| Judgment of: | Lucev FM |
| Hearing date: | 9 June 2011 |
| Date of Last Submission: | 9 June 2011 |
| Delivered at: | Perth |
| Delivered on: | 9 June 2011 |
REPRESENTATION
| For the Applicant: | No appearance |
| Counsel for the Respondent: | Mr D. Fletcher |
| Solicitors for the Respondent: | Middletons |
ORDERS
That the applicant pay the respondent’s costs in the sum of $7,045 by 8 July 2011.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 42 of 2011
| MICHAEL TOOMATH |
Applicant
And
| INNER STRENGTH STEEL FIXING (WA) PTY LTD |
Respondent
REASONS FOR JUDGMENT
(Ex tempore – edited from the transcript)
This is an application by the respondent for costs in these proceedings which are proceedings under the Fair Work Act 2009 (Cth).[1]
[1] “FW Act”.
The facts for relevant purposes are these:
a)an application and points of claim were filed on 22 February 2011 alleging a failure by the respondent, Inner Strength Steel Fixing (WA) Pty Ltd,[2] to provide employee records as requested by the applicant, Mr Toomath, contrary to reg.3.42 of the Fair Work Regulations 2009 (Cth);
[2] “Inner Strength Steel Fixing”.
b)on 17 March 2011, the Court made orders for:
(1) the filing of a defence and reply,
(2)referral to mediation before a Registrar of this Court on or before 30 May 2011; and,
(3)if mediation was unsuccessful, for:
(a) evidence at hearing to be taken orally; and
(b)the matter to be listed for hearing for one day on
9 June 2011;
c)on 11 April 2011, the Court signed consent orders which amended the timeframe for the filing and serving of the defence and reply and also amended the date for mediation, but which did not alter the orders concerning the conduct and date of hearing;
d)on 15 April 2011, a response and a defence was filed;
e)mediation occurred on 17 May 2011 and was seemingly adjourned to 27 May 2011, but it is not apparent from the Court file whether that particular mediation proceeded, but it is evident that mediation did not resolve the matter;
f)the matter was listed for further directions on 31 May 2011 at which time it was adjourned to the hearing date of 9 June 2011;
g)there was some discussion at the 31 May 2011 directions hearing of the possibility of a statement of agreed facts being filed but as there was no certainty about it, no orders were made in that regard;
h)on 7 June 2011, the respondent made a very late application in a case for discovery of documents, the evidentiary relevance of which was to show, seemingly, that the applicant was not an employee, which was a matter in issue on the pleadings in a matter specifically pleaded in paragraph (1)(a) of the defence;
i)the Court listed the respondent’s application in a case urgently, but when the respondent’s application in the case was called on for hearing at 9 am on 8 June 2011, the applicant’s lawyer advised the Court that they had six days previously sent to the applicant a notice of intention to withdraw as lawyers,[3] which would have taken effect on the day of the hearing, that is 9 June 2011;
j)the applicant’s lawyers advised that they sent off the Withdrawal Intention Notice as a consequence of their being unable to contact the applicant and he not contacting them, resulting in a failure to be able to obtain instructions, including instructions for the hearing of the respondent’s application in a case for discovery;
k)the Court determined to adjourn the respondent’s application in a case to the hearing date on 9 June 2011;
l)the lawyers on the record for the applicant attended the hearing, but sought to rely upon a notice of withdrawal as lawyer to be filed today, however, were granted leave by the Court to withdraw as lawyers without the necessity to file the relevant notice in the Registry;
m)in circumstances where there was both a lack of contact from the applicant and no instructions from the applicant, and because of the applicant’s absence and the consequent inability to conduct the case by oral evidence in accordance with the Court’s orders, the Court granted leave to withdraw to the lawyers on the record for the applicant, thereby obviating any necessity for consideration as to whether the relevant time period had been met for the purposes of the withdrawal. The Court refers to r.9.03(2) of the Federal Magistrates Court Rules 2001 (Cth)[4] and, generally, r.9.03 of the FMC Rules as to the withdrawal of the applicant’s lawyers;[5]
n)the applicant did not personally attend the hearing today;
o)the applicant’s former lawyers having been granted leave to withdraw, the applicant not being in attendance, and the matter having been called outside the Court, upon application by the respondent the Court determined, a little earlier, to dismiss the matter pursuant to r.13.03C(1)(c) of the FMC Rules; and
p)upon the making of the order for dismissal, the respondent sought an order for costs generally in relation to the proceedings.
[3] “Withdrawal Intention Notice”.
[4] “FMC Rules”.
[5] See also Moon v JLG Industries [2011] FMCA 343 at paras.32 to 35 per Lucev FM.
Section 570(1) and (2) of the FW Act provides as follows:
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction 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.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 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 FWA;
(ii) the matter arose from the same facts as the proceedings.
The only basis on which the present adjournment for costs is sustainable in the Court’s view is under s.570(2)(b) of the FW Act, that is, whether there has been an unreasonable act or omission by the applicant. That is because:
a)for the purposes of s.570(2)(a), an arguable case is disclosed by the pleadings and the matter, as the Court indicated in argument, was one which had been conducted normally and appropriately until the unexplained absence of the applicant in the proceedings, and on no account could it be said that the proceedings had been “instituted … vexatiously or without reasonable cause”; and
b)for the purposes of s.570(2)(c), those matters are not in issue.
In Hughes v Mainrange Corporation Pty Ltd (No. 2),[6] this Court observed as follows.
19. For the purposes of s.570(2)(b) two criteria must be fulfilled. They are:
a) that a party must have engaged in an unreasonable act or omission; and
b) that the unreasonable act or omission must have caused another party to incur costs in connection with the proceeding.
[6] (2009) 190 IR 351, (2009) FMCA 1044 at paras.19 to 21 per Lucev FM.
20. Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case.
21. The exercise of the discretion in s.570(2)(b) is not necessarily engaged because:
a) a party does not conduct litigation efficiently;
b) a concession is made late;
c) a party may have acted in a different or timelier fashion;
d) a party has adopted a genuine but misguided approach.[7]
[7] See also Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at 582-583 per Tamberlin, Gyles and Gilmour JJ; [2008] FCAFC 143 at paras.28 to 30 per Tamberlin, Gyles and Gilmour JJ.
It is tolerably clear that prior to the respondent’s application in the case called on yesterday, that there was no reason for the Court to think that there had been any unreasonable act or omission by any party.
Until yesterday morning, this was, and had been, litigation conducted normally and appropriately by all the parties. There is no evidence the application was some kind of sham or an endeavour to extract money from the respondent at mediation. The pleadings disclosed an arguable case and an arguable defence. Therefore, in the Court’s view, and in the exercise of the Court’s broad discretion as to costs under s.79(2) of the Federal Magistrates Act 1999 (Cth),[8] no costs ought to be awarded for any events prior to the filing of the respondent’s application in a case, save only for the costs of preparation for the actual hearing of the application, which is considered further below.
[8] “FM Act”.
Yesterday, for the first time, the Court was advised that the applicant was not in contact with his lawyers and that his lawyer had served the Withdrawal Intention Notice. Those acts do not, however, necessarily entitle the respondent to the costs of the respondent’s application in a case. Given:
a)the lateness of the respondent’s application in a case, which may or may not have been granted; and
b)if the respondent’s application in a case was granted, and having regard to the nature and possible location of the documents sought, particularly the documents and records of the applicant’s alleged sole trader entity over a period of roughly three to four years, there may have been a requirement to adjourn the hearing today,
the Court, in the exercise of the broad discretion invested in it with respect to costs under s.79(2) of the FM Act, is not prepared to order costs with respect to the respondent’s application in the case.
The costs of the hearing today and the preparation for hearing, however, fall into a different category. This hearing was listed for today almost three months ago. The applicant must have been aware of that. All of the normal pre-hearing processes, including:
a)consent orders amending dates for the filing and service of documents; and
b)mediation,
occurred. It was not until yesterday that the Court became aware that the applicant may not appear at hearing. As it transpires, the applicant has not appeared and the applicant has otherwise provided no explanation for his non-appearance. Because the applicant has been uncontactable, his former lawyers were not able to furnish any explanation for the applicant’s non-appearance prior to them being granted leave to withdraw. No criticism can be levelled at the applicant’s former lawyers who appear to have acted properly in the circumstances.
The Court, therefore, is of the view that there has been an unreasonable act or omission by the applicant in relation to the applicant’s failure to attend, without explanation, a hearing which was listed three months previously, and that that unreasonable act or omission, as the Court says, without any explanation whatsoever to the Court or, seemingly, the applicant’s former lawyers, has caused the respondent to incur costs in connection with the proceedings. In those circumstances, which are not dissimilar to the circumstances, at least conceptually, in Welsh v Allblend Holdings Pty Ltd (No 4),[9] the unreasonable act attaches to the costs of the hearing today and also the costs wasted by reason of preparation for the hearing today.
[9] (2010) 196 IR 114 at 118 per Lucev FM; [2010] FMCA 521 at paras.19 and 20 per Lucev FM.
Costs in this Court are ordinarily awarded on the basis of the scale in schedule 1 to the FMC Rules and the Court refers to Pierson’s Pro-Health Pty Ltd v Silvex Nominees Pty Ltd & Ors (No 3).[10] Those costs for today’s purposes are the stage 5 costs of preparation for a one-day matter, $5,285, and the stage 6 cost of daily hearing fee of $1,760. There will be no further cost for the handing down of judgment, that effectively being part of the daily hearing fee for the purposes of today’s exercise, it being an ex tempore judgment. So the daily hearing fee of $1,760 will also attach, making total costs of $7,045. So, in addition to the earlier orders,[11] there will be an order that the applicant pay the respondent’s costs in the sum of $7,045 by 8 July 2011.
[10] [2010] FMCA 250 at paras.43-44 per Lucev FM.
[11] Made prior to delivery of these ex tempore Reasons for Judgment.
I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 14 June 2011
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