Trustee for The MTGI Trust v Johnston (No 2)

The Trustee for The MTGI Trust v Johnston (No 2) is a case where Mr David Johnston sought an order for the costs of the proceedings to be paid by the applicant, MTGI, and Mr Paul Wallace, a non-party. The proceedings were for a review of two decisions by the Full Bench of the Fair Work Commission, which had awarded Mr Johnston compensation and costs. The Federal Court found no merit in the application and ordered MTGI to pay Mr Johnston’s costs. Mr Johnston then applied for his costs to be paid on an indemnity basis by both MTGI and Mr Wallace, who is the sole director and shareholder of MTGI. The application was based on the argument that MTGI instituted the proceedings vexatiously or without reasonable cause under s 570 of the Fair Work Act 2009 (Cth). The Court examined the submissions from both parties, considering whether the proceedings were instituted vexatiously or without reasonable cause, and if an unreasonable refusal to participate in the Fair Work Commission proceedings caused Mr Johnston to incur costs. The Court found that the application for costs should be made with caution, given the exceptional nature of the power to award costs in an otherwise no-costs jurisdiction. The Court concluded that the application for costs against both MTGI and Mr Wallace should be granted. The Court ordered that MTGI and Mr Wallace be jointly and severally liable for Mr Johnston’s costs, fixed at $48,387.18, to be paid within 28 days.