Torpia v Zarfati
[2009] FMCA 166
•20 February 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TORPIA v ZARFATI | [2009] FMCA 166 |
| INDUSTRIAL LAW – COSTS – Workplace Relations Act 1996 – adjournment application on day matter listed for hearing – failure to file evidence or submissions as ordered – whether unreasonable act or omission caused another party to incur costs – whether indemnity costs appropriate. |
| Workplace Relations Act 1996 (Cth), ss.659, 661, 666, 719, 824 |
| Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 391 Paras v Public Service Body Head of the Department of Infrastructure and Another (No 3) (2006) 152 FCR 534 |
| Applicant: | VITALIANO TORPIA |
| Respondent: | FRANK ZARFATI |
| File Number: | SYG 2270 of 2008 |
| Judgment of: | Barnes FM |
| Hearing date: | 20 February 2009 |
| Delivered at: | Sydney |
| Delivered on: | 20 February 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr I C Latham |
| Solicitors for the Applicant: | Beston Macken McManis |
| Solicitors for the Respondent: | Pope & Spinks |
ORDERS
That the hearing date be vacated.
That the respondent pay the costs of the applicant thrown away by reason of the adjournment in the sum of $2,250 including GST within 28 days of today's date.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2270 of 2008
| VITALIANO TORPIA |
Applicant
And
| FRANK ZARFATI |
Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
This is an application by the respondent Frank Zarfati for an adjournment of the hearing of an application for a penalty under s.719 of the Workplace Relations Act 1996 (Cth) and for compensation and penalties in reliance on ss.659 and 661 of the Act. It is necessary to have regard to the interests of justice and the interests of the parties. On 7 October 2008 the matter was listed for hearing today.
Orders were made for the parties to file documents and submissions. Initially the respondent filed a response due by 14 October 2008 on 16 November 2008. The applicant's affidavit evidence was filed on 11 December 2008. The respondent did not thereafter file and serve any affidavit evidence, except an affidavit filed in Court today in relation to his adjournment application.
The respondent did not seek to exercise the liberty to apply granted on 7 October 2008 to bring the matter back before the Court. He now provides an explanation of sorts in relation to his failure to be ready to proceed today.
The respondent claimed generally that he has been “unwell” over the “last several months” and had been unable to attend to preparation of this matter properly. This claim was not clarified either in his affidavit evidence or in cross-examination, except that he referred to a chronic upper respiratory infection and to a period where he was concerned that he had a malignant tumour on his neck. It was removed on 28 January 2009 in day surgery. It appears from a medical report that it was not malignant, although I recognise that this possibility may have caused some concern for a period of time. There is also evidence as to Mr Zarfati's ongoing involvement in other matters and financial difficulties incurred by Empire Printing Pty Ltd (which was originally a respondent to those proceedings but which is now in liquidation) and by his most recent employer.
Mr Zarfati’s explanation for the delay and his lack of readiness to proceed is not as satisfactory as one might wish for in circumstances of this nature. Nonetheless, I am conscious that it is in the interests of justice that all the evidence be before the Court in proceedings of this nature. I have had regard to whether an adjournment would cause prejudice to the applicant. I raised with the solicitor for Mr Zarfati the issue of costs, in light of the nature of the jurisdiction and the provisions in the Workplace Relations Act 1996 (Cth) in particular s.666 and s.824. While I was asked not to make a costs order against the respondent and costs were not consented to, it was recognised for the respondent that the Court might well be satisfied that he had, by an unreasonable act or omission, caused the applicant to incur costs in connection with the proceeding so that a costs order may be made under s.824(2).
I have had regard to the non-compliance by the respondent, the limited nature of his explanation and the considerable amount of time there has been for him to file affidavit evidence or to ask the Court for an adjournment prior to today (before costs were incurred by the applicant in preparing for the hearing). I am satisfied that the respondent has, by what is at least an unreasonable omission, caused the applicant to incur costs in connection with the proceeding. However the fact that there was an unreasonable omission within s.824(2) does not necessarily mean that there should not be an adjournment.
On balance, given the availability of costs to address the prejudice caused to the applicant by an adjournment as discussed below, I consider that the interests of justice and of the parties warrant an adjournment, notwithstanding that I do not consider the explanation provided for what has happened is such that I can regard the respondent’s omissions as not unreasonable.
It is appropriate that there be an adjournment, but the adjournment should be as short as is reasonably necessary to allow the preparation of further affidavit evidence by the respondent and any affidavit evidence in reply from the applicant. On the basis of what the parties have told me that is a four week period. I note the applicant’s concerns in this regard as to the possibility of the respondent becoming bankrupt. The hearing will be listed as soon as possible after the time for filing further evidence.
As indicated, I am satisfied that in these proceedings the respondent has, by an unreasonable omission, caused another party to the proceedings, the applicant, to incur costs in connection with the proceedings. My discretion under s.824(2) is a broad discretion. It is not necessary that the matter in issue affect the whole of the proceeding or the ultimate outcome of the proceeding (see Paras v Public Service Body Head of the Department of Infrastructure and Another (No 3) (2006) 152 FCR 534).
I also note that in Paras Young J referred (at [17]) to the illustrative example given in the Explanatory Memorandum in relation to s.824 concerning costs incurred as a result of a party's non-compliance with Court directions. In this case, the respondent failed to comply with orders of the Court to file and serve evidence and also a order to file an outline of submissions (although I note that the applicant filed his submissions late). The adjournment was sought at the last moment whereas, consistent with what Flick J stated in Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 391 at [37], the appropriate course would have been for the respondent to apply to the Court to vary the directions that had been made or to vacate the hearing date and to seek an adjournment. Had this occurred the costs then thrown away would have been a lesser amount.
In failing to comply with the Court's directions and not seeking to be relieved of its obligations the respondent could also be said to have “acted” unreasonably. However I note that unreasonable omission suffices under s.824(2).
I am asked by the applicant to award costs on an indemnity basis on the basis that it was unreasonable for the respondent to have subjected the applicant to the expenditure of costs. Reliance was placed in that respect on the decision in Liquor,Hospitality & Miscellaneous Union v The Roman Catholic Archbishop of Perth [2008] FCA 457 at [23] – [24] in which costs were awarded on an indemnity basis based on the “unreasonableness” of the applicant’s subjecting the “innocent party” to the expenditure of costs. That case dealt with the issue of whether a motion had been instituted by an applicant without reasonable cause and whether pursuit of the motion involved unreasonable acts or omissions. That is a somewhat different context from this situation.
Counsel for the applicant quite properly brought to my attention that a different approach was taken by Tracey J in the Qantas case to the question of whether costs should be awarded on an indemnity basis where a party had acted unreasonably within s.824(2). His Honour referred at [39] to the usual approach considered by Sheppard J in Colgate-Palmolive Company and Another v Cussons Pty Limited (1993) 46 FCR 225 at 230 – 4 to the effect that indemnity costs should only be awarded in a limited range of cases and that costs would ordinarily be paid on a party and party basis. Tracey J concluded that the costs thrown away because a hearing did not proceed awarded under s.824(2) should in that case be awarded on a party and party basis, albeit his Honour recognised that costs might be awarded on an indemnity basis under s.824(2) in appropriate cases (at [37] – [39]).
There is also authority in relation to s.824(1) (which refers to the institution of a proceeding vexatiously or without reasonable cause) in Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445 that indemnity costs should not be ordered in the absence of a presumption that the action was commenced for some ulterior motive or because of a wilful (as distinct from inadvertent) disregard of known facts or established law. The authorities before me are not such as to compel a conclusion that because a matter comes within s.824(2) and involves an unreasonable act or omission such unreasonableness of itself warrants the award of indemnity costs.
In the particular circumstances of this case (which differ somewhat from the circumstances in the Liquor, Hospitality & Miscellaneous Union case), I am not persuaded that there is some special or unusual feature of the case or that the justice of the case requires that costs be awarded on an indemnity basis. I am not persuaded that the actions and omissions of the respondent, albeit characterised as unreasonable, are such as to warrant a departure from the ordinary rule that that the applicant’s costs thrown away should be paid on a party and party basis.
Accordingly the hearing date should be vacated and the respondent should pay the applicant’s costs thrown away by reason of the adjournment. Counsel for the applicant has asked that I fix those costs. I have the power to do so under the Federal Magistrates Act 1999 (Cth) and the Rules of the Court. It would be preferable to do so rather than to order that costs be taxed if the parties are unable to agree on an amount given the nature of these proceedings.
RECORDED : NOT TRANSCRIBED
The parties have reached agreement on an appropriate amount of costs. I will make the order sought by the applicant.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Barnes FM
Associate:
Date: 4 March 2009
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