Traverse Alpine Operations Pty Ltd v Simpson

Case [2022] FCA 1365

FEDERAL COURT OF AUSTRALIA

Traverse Alpine Operations Pty Ltd v Simpson [2022] FCA 1365

File number(s): VID 439 of 2020
Judgment of: MCELWAINE J
Date of judgment: 17 November 2022
Catchwords: COSTS – application for costs pursuant to s 570 of the Fair Work Act 2009 (Cth) – whether proceeding is “in relation to a matter arising under” the Fair Work Act – whether the unreasonable act or omission of the respondents caused the applicant to incur costs – where multiple settlement or Calderbank offers were made – where proceeding ultimately settled by consent – whether the respondents acted unreasonably in refusing offer made on 29 March 2021 – indemnity costs order made against the respondents from 12 April 2021, being the date of the expiry of the offer – respondents’ application for costs of the proceeding – whether proceeding was commenced or continued without reasonable cause – no unreasonable conduct found on the part of the applicant – respondents’ application for costs dismissed
Legislation:

Copyright Act1968 (Cth) s 36

Corporations Act 2001 (Cth) ss 182, 183, 184(3)

Fair Work Act 2009 (Cth) ss 340, 341, 546, 570

Federal Court of Australia Act1976 (Cth) ss 21, 37M, 37N, 43

Privacy Act1988 (Cth) Sch 1 (Australian Privacy Principles)

Cases cited:

Australian Competition and Consumer Commission v Grove & Edgar Pty Ltd [2008] FCA 1956

Black v Lipovac (1998) 217 ALR 386

BHP Group Ltd v Impiombato (2022) 96 ALJR 956; [2022] HCA 33

Calderbank v Calderbank [1975] 3 All ER 333

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434

Fencott v Muller (1982-1983) 152 CLR 570

Hazeldene’s Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298

Hobart International Airport Pty Ltd v Clarence City Council (2022) 96 ALJR 234; [2022] HCA 5

Joseph v Parnell Corporate Services Pty Ltd (2021) 284 FCR 546; [2021] FCAFC 67

Rana v Google Inc (2017) 254 FCR 1; [2017] FCAFC 156

Toma v Workforce Recruitment and Labour Services Pty Ltd [2022] FCAFC 100

Zibara v Ultra management (Sports) Pty Ltd (2021) 283 FCR 18; [2021] FCAFC 4
Division: General Division
Registry: Victoria
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 134
Date of hearing: 27 September 2022
Counsel for the Applicant: Mr J Bourke KC with Ms E Latif
Solicitor for the Applicant: Thomson Geer
Counsel for the Respondents: Ms C Serpell
Solicitor for the Respondents: Williams Winter Solicitors

ORDERS

VID 439 of 2020
BETWEEN:

TRAVERSE ALPINE OPERATIONS PTY LTD (ACN 169 662 551)

Applicant
AND:

SALLY ANN SIMPSON

First Respondent

THOMAS JAMES SIMPSON

Second Respondent

ORDER MADE BY:

MCELWAINE J

DATE OF ORDER:

17 NOVEMBER 2022

THE COURT DIRECTS THAT:

A.Within 7 days of the date of this order, the bank guarantee dated 12 May 2021 held by the escrow agent Anthony Smyth of Carrick Gill Smyth be released to the Applicant’s…

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Details
AGLC
Traverse Alpine Operations Pty Ltd v Simpson [2022] FCA 1365
Case
[2022] FCA 1365
Decision Date

CaseChat Overview and Summary

In the Federal Circuit Court, Traverse Alpine Operations Pty Ltd brought a claim against Simpson and others, under the Fair Work Act 2009 (Cth). The dispute arose from allegations of misuse of confidential information. Both parties subsequently made applications for costs under section 570 of the Fair Work Act. The court was required to decide whether the proceeding was instituted vexatiously or without reasonable cause, or whether an unreasonable act or omission by one party caused the other to incur costs. The decision hinged on the interpretation of the high threshold required to engage section 570, which curtails the discretion of the court in awarding costs in proceedings arising under the Fair Work Act. The court noted the importance of ensuring that the potential for costs awards did not discourage genuine claims or defences.

The court examined the chronology of events, the affidavits, and the expert reports submitted by both parties. It found that the Simpson parties had not demonstrated that Traverse acted unreasonably, which was necessary to meet the threshold for an order under section 570. The court concluded that the proceeding was not instituted vexatiously or without reasonable cause, and that there was no unreasonable act or omission by Traverse that led to the Simpson parties incurring costs. The Simpson parties' application for costs was thus refused. The court ordered that the bank guarantee provided by Traverse be released to its lawyers and that the Simpson parties must pay Traverse's costs on an indemnity basis for the specified period and claims.

The court dismissed the Simpson parties' application for costs and ordered that the respondents pay the applicant's costs of the proceeding, limited to the specified period and claims. The quantum of the costs payable was to be determined by a registrar in accordance with the Federal Court Rules 2011 (Cth).

Orders

Orders of the court

1. The respondents must pay the applicant’s costs of this proceeding on an indemnity basis limited to:

(a) the period commencing at 5 pm on 12 April 2021 until the conclusion of the costs application hearing on 27 September 2022; and

(b) that part of the proceeding concerned with the claims pleaded in the Further Amended Statement of Claim filed 25 June 2021.

2. The quantum of the costs payable is to be determined by a registrar pursuant to rule 40.12 of the Federal Court Rules 2011 (Cth).

3. The respondents’ application for costs is dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Accordingly, for either costs application to succeed, I must first be satisfied (on the application of the Simpson parties) that the proceeding was instituted vexatiously or without reasonable cause or (in the case of each application) that the unreasonable act or omission of one party caused the other to incur costs.THE EVIDENCE AND THE DISCRETION Traverse relies on affidavit evidence that was read from David Caldwell, Dennis Lear, Seumas Dawes and Paul Ronfeldt together with two expert reports that were filed in the proceeding: one from Michael Khoury and the other from Andrew Le. The Simpson parties rely on an affidavit from their solicitor, Michael Watson. There was no cross-examination, which is unsurprising as in large measure the affidavit evidence sets out the chronology of correspondence between the parties before and during this proceeding. And the expert reports establish the categories of the Traverse information that was copied and then possessed by the Simpson parties which was not ultimately in dispute. What is principally in issue is whether I should find that Traverse or the Simpson parties engaged in unreasonable conduct in order to meet the relatively high threshold of s 570 of the FW Act, before it is open to me to make an order for costs: Toma v Workforce Recruitment and Labour Services Pty Ltd [2022] FCAFC 100 (Toma), where at [47] Rangiah, SC Derrington and Abraham JJ stated:The bar to engage s 570 of the FWA is set relatively high. That is no doubt because the effect of the section is to curtail, in proceedings relating to matters arising under the FWA, the discretion which the Court would otherwise have with respect to costs: Altintas v O’Dea Lawyers (No 2) [2018] FCAFC 187 at [6], per White, Perry and Charlesworth JJ. Thus, the discretion to award costs under s 570 of the FWA must be exercised cautiously. As Mortimer J explained in Ryan v Primesafe [2015] FCA 8; 323 ALR 107 at [64]:… The discretion conferred by the confined terms of s 570(2) should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] per Bromberg J. The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the Fair Work Act, or the defence of such claims. 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 (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. … A document that I have found most useful is the updated chronology of events prepared on behalf of Traverse and which is carefully cross-referenced to the electronic court book prepared for the purposes of the costs applications. This document is dated 21 September 2022 and I will simply refer to it as the chronology. I make findings of fact in accordance with the evidence referenced in it as follows. I do not overlook the submission of Ms Serpell that in some respects the chronology (and with it the evidence of Traverse) is incomplete and where that is claimed to be so, I separately address her submissions and the evidence of the Simpson parties.

Decision

Reasons for decision

For these reasons, I have concluded that the Simpson parties have failed to satisfy me that there was any unreasonable relevant act or omission of Traverse in this proceeding that caused the Simpson parties to incur costs. Accordingly, their application for costs is refused.CONCLUSION The final matter I must deal with in this proceeding is the bank guarantee provided by Traverse as security for the respondents’ costs of this proceeding which is presently held by an independent legal practitioner. At the hearing of the costs application, Traverse sought an order for the bank guarantee to be released to the lawyers for Traverse. As the respondents’ application for costs is refused, I consider it appropriate that the bank guarantee be released and I direct as follows: A.Within 7 days of the date of this order, the bank guarantee dated 12 May 2021 held by the escrow agent Anthony Smyth of Carrick Gill Smyth be released to the Applicant’s lawyers, Thomson Geer (Attention: Paul Ronfeldt). For the reasons set out above, I make the following further orders:1.The respondents must pay the applicant’s costs of this proceeding on an indemnity basis limited to:(a)the period commencing at 5 pm on 12 April 2021 until the conclusion of the costs application hearing on 27 September 2022; and(b)that part of the proceeding concerned with the claims pleaded in the Further Amended Statement of Claim filed 25 June 2021.2.The quantum of the costs payable is to be determined by a registrar pursuant to rule 40.12 of the Federal Court Rules 2011 (Cth).3.The respondents’ application for costs is dismissed.

Ratio Decidendi

Legal Principle Established

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