Federal Circuit and Family Court of Australia
(DIVISION 2)
Wavish v Descon Group Australia Pty Ltd [2022] FedCFamC2G 912
File number: MLG 3698 of 2020 Judgment of: JUDGE BLAKE Date of judgment: 3 November 2022 Catchwords: INDUSTRIAL LAW – Costs – s 570 of the Fair Work Act 2011 (Cth) (Act) – whether proceeding against cross respondent instituted vexatiously and without reasonable cause as contemplated by section 570(2)(a) – where cross claimant had facts available to it but chose not to institute cross claim when filing its initial response – where cross claim initiated only after filing of affidavits – where sequence of events makes clear that cross claim pursued to intimidate witness – cross claim filed sought to pursue an action without reasonable cause – Held s 570(2)(a) engaged.
INDUSTRIAL LAW – Costs – whether s 570(2)(b) of the Act is engaged – where claim amended to include a claim for general damages – where no basis for claim for general damages and where the claim was unilaterally withdrawn prior to trial – held the claim for general damages was an act or omission that engaged s 570(2)(b) of the Act.
INDUSTRIAL LAW – Costs – whether s 570(2)(b) of the Act is engaged – where offer of compromise served – whether offer was reasonable- reasonableness assessed – offer of compromise and failure to accept able to be relied on and engages s 570(2)(b) of the Act.
INDUSTRIAL LAW – Costs – whether to award indemnity costs – where claims advanced to harass and intimidate witness – principles considered – Held that this is an exceptional case warranting an indemnity costs order.
INDUSTRIAL LAW – Costs – whether costs order should be made against solicitor – where solicitors acted inconsistently with Australian Solicitor Conduct Rules and the overarching obligation in ss 190 and 191 of the Federal Circuit and Family Court of Australia Act 2021 – where solicitors failed to exercise care and skill – held that solicitors pay 50% of an order for indemnity costs.
Legislation: Australian Solicitor Conduct Rules, rr. 21, 21.1, 21.3.
Fair Work Act 2009 (Cth), ss 570, 570(1), 570(2).
Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 190, 191, 191(2), 191(4), 191(5).
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, r 22.06.
Federal Court Rules 2011, r 25.
Cases cited: Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166
Calderbank v Calderbank [1975] 3 All ER 333
Colgate Palmolive v Cussons Pty Ltd (1993) 46 FCR 225
Harvey v Dioceses of Sale Catholic Education Ltd (St Joseph’s Primary School Wonthaggi) (No 3) [2021] FCA 1420
Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority [2005] VSCA 298
Mitry Laywers v Barnden [2014] FCA 918
Polis v Zombor (No 5) [2022] FCA 122
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- Case
- [2022] FedCFamC2G 912
- Decision Date
CaseChat Overview and Summary
The court's reasoning and outcome hinged on the interpretation of section 570 of the Act, which pertains to costs in proceedings. The court found that the cross-claim against Mr Rodd was indeed instituted vexatiously and without reasonable cause, engaging section 570(2)(a). Additionally, the claim for general damages was deemed to engage section 570(2)(b) of the Act. The court further deliberated on whether an indemnity costs order should be made, considering the conduct of the parties and the solicitors involved. It concluded that the exceptional nature of the claims and the conduct of the proceedings warranted such an order. The court found that the solicitors for the respondents had acted inconsistently with the Australian Solicitor Conduct Rules and sections 190 and 191 of the Federal Circuit and Family Court of Australia Act 2021. Consequently, the solicitors were held responsible for 50% of the indemnity costs order.
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Background
Background to the litigation
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Ratio Decidendi
Legal Principle Established
More recently, in Harvey v Dioceses of Sale Catholic Education Ltd (St Joseph’s Primary School Wonthaggi) (No 3) [2021] FCA 1420, O’Callaghan J emphasised that costs orders against lawyers should be approached with great caution. His Honour stated: [34]It is, of course, the case that the power to make orders that legal practitioners bear costs personally is to be exercised sparingly and with great caution. One of the reasons that is so is “the risk of a practice developing whereby solicitors endeavour to browbeat their opponents into abandoning ... particular issues or arguments, for fear of a personal costs order being made against them”…Consideration Mr Rodd submitted that a costs order should be made against IBL for reasons that include the following: that IBL’s conduct in pursuing and maintaining the proceedings against Mr Rodd was conduct that was not consistent with the obligations on a solicitor set out in rule 21 of the Australian Solicitor Conduct Rules (‘ASC Rules’) or sections 190 and 191 of the FCFCOA Act; that the allegations against Mr Rodd essentially amounted to allegations that he and Mr Wavish defrauded Descon and there was not a reasonable basis for the allegations and that IBL omitted relevant and essential documentary evidence (the Delegation) when compiling witness affidavits and its affidavit of disclosure. It is convenient to deal with the last submission first. Mr Quinn purported to attach to his affidavit a copy of the Delegation, but did not do so. The Delegation was an important document because it went to the question of whether Mr Rodd had the authority to approve leave for Mr Wavish. In an affidavit filed in support of his application for costs, Mr Rodd’s solicitor Sean Sullivan, deposes that the Delegation was not produced in response to a request from Mr Wavish’s solicitors on 4 June 2021. Mr Sullivan also deposes that the Delegation was not disclosed in Descon’s affidavit of disclosure served on 2 December 2021 nor is it attached to the affidavit of Mr Sneeden (a witness to be called by Descon at trial) on 4 March 2022. In a further affidavit filed after I had concluded hearing the oral application for costs, Mr Sullivan deposed that it is apparent from the draft Court Book index which was circulating between the parties prior to trial that IBL did not intend to include the Delegation in the Court Book. Mr Sullivan goes on to depose that he ultimately had to obtain a copy of the document from Mr Wavish’s solicitor. I have considered carefully the affidavits of Mr Sullivan and the various affidavits of Mr Devitt, Descon’s solicitor. I accept that the Delegation was not attached to Mr Quinn’s affidavit. It also seems that the Delegation was not disclosed as a separate document in the affidavit of disclosure filed on 2 December 2021, a serious matter. It is clear, however, that a copy of the Delegation was produced to Mr Wavish’s solicitors on 4 June 2021. It is also clear that on 4 June 2021, Mr Devitt filed an affidavit that attached the missing Delegation. That affidavit was on the Court file, available for all to see. Moreover, in that affidavit, Mr Devitt disclosed openly that the attachments to Mr Quinn’s affidavit were missing and that this was an ‘inadvertent omission’.