Wavish v Descon Group Australia Pty Ltd - [2022] FedCFamC2G 912

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include a claim for general damages – where no basis for claim for general damages and where the claim was unilaterally withdrawn prior to trial – held the claim for general damages was an act or omission that engaged s 570(2)(b) of the Act.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

CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173

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

Ritter v Godfrey [1920] 2 KB 47

Ryan v Primesafe (No…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FedCFamC2G 912
Decision Date: 3 November 2022

CaseChat Overview and Summary

The matter of Wavish v Descon Group Australia Pty Ltd involved proceedings initiated by Mr Wavish against the respondents, including Descon Group Australia Pty Ltd and Mr Rodd. The dispute primarily centred on the validity of Mr Wavish's termination of employment and related claims for unpaid wages, among other things. The case was heard in the Fair Work Commission. The legal issues the court was required to decide involved the assessment of costs under the Fair Work Act 2011, specifically whether the proceeding against Mr Rodd was instituted vexatiously and without reasonable cause, whether the claim for general damages engaged section 570(2)(b) of the Act, and if an indemnity costs order was warranted due to the nature of the claims advanced. The court examined the timing and reasons behind the initiation of the cross-claim against Mr Rodd, noting that it was filed after the initial response and seemed to be pursued to intimidate a witness. The court also considered the amendment to include a claim for general damages, which was withdrawn prior to trial but was deemed an act without reasonable cause.

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.

Orders

Orders of the court

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Background

Background to the litigation

There is then the question of whether any costs order, if made, should be made on an indemnity basis. In Ryan, while Mortimer J considered that the proceedings against a solicitor were instituted without reasonable cause and the unreasonable conduct in joining the solicitor caused him to incur costs, without more, those factors did not justify what would be, in substance, a second departure from the underlying policy evidenced in section 570 of the Act. Mortimer J awarded costs on a party/party basis. Similarly, in Baker, while the Full Court considered that the application had no reasonable prospects of success, it awarded costs to the Respondent on a party/party basis. background Mr Rodd was employed by Descon as a Project Manager in Melbourne from 1 May 2019 until his employment ceased on 30 April 2020. Following the cessation of his employment, Mr Rodd continued to work for Descon on a consultancy basis until 10 July 2020. Mr Wavish was employed by Descon as a Senior Site Manager between 31 March 2019 and 30 May 2020. Mr Wavish reported to Mr Rodd. Mr Rodd reported to Mr Dean Lockhart, General Manager for Descon. Mr Wavish was employed under a written contract of employment. Clause 4 of the contract of employment required him to work 38 hours per week ‘however on occasion you may be required to work additional hours as may be necessary to the business of Descon and the performance of your duties’. Clause 9 of the contract provided that Mr Wavish’s fixed remuneration compensated him for a range of benefits including overtime rates of pay. Clause 11 of the contract dealt with leave and relevantly provided that Mr Wavish was entitled to leave in accordance with the National Employment Standards in the Act. It also stated as follows: ‘Please note that Descon has a shutdown period over the Christmas/New Year period annually of approximately two (2) to three (3) weeks duration (to align generally with shutdowns in the construction industry) during which you will be requested to take annual leave’. Clause 21 required Mr Wavish to comply with all relevant State and Federal Occupational Health & Safety laws and all site and Descon safety standards. Mr Wavish’s employment was terminated by Descon on around 30 May 2020. His employment was terminated following Mr Quinn arriving at the relevant site to find Mr Wavish was not present for work. Mr Wavish commenced proceedings against the respondents on 16 October 2020. The proceeding was commenced by the filing of an application and Statement of Claim. At paragraph 11 of the Statement of Claim, Mr Wavish pleaded that he had been, among other things, excused from attending work on Saturday 30 May 2020 by Mr Rodd and that as a consequence of that, his termination of employment by Descon was unlawful. On 10 November 2020, the Court made orders that, among other things, required the respondents to file a Defence or Response by 13 January 2021. The orders also required the parties to file any affidavits on which they intended to rely by 25 February 2021.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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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’.

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 CGU Insurance Ltd v Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 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 Ritter v Godfrey [1920] 2 KB 47 Ryan v Primesafe (No…