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[31]
[2023] FWCFB 147
General information, not legal advice.
Fair Work Commission (Full Bench)
2023-08-23
Original judgment source is linked above.
s.611 - Costs
Appeal against decision [2023] FWC 878 of Commissioner Ryan at Sydney on 13 April 2023 in matter number C2023/1371 - permission to appeal refused - costs application by respondent in the appeal.
[1] On 14 April 2023, Captain Lucas, who is the President of the Australian and International Pilots Association (AIPA), filed an appeal against a decision made by Commissioner Ryan of 13 April 2023[1] in which the Commissioner declined to recuse himself from further dealing with matter C2023/1371 on the grounds of actual and apprehended bias. Permission to appeal was required. The appeal was heard on 21 April 2023 in respect of whether permission to appeal should be granted and Captain Lucas' application for a stay. On 26 April 2023, we issued a decision refusing permission to appeal[2] (appeal decision).
[2] On 10 May 2023, Qantas Airways Limited (Qantas), the respondent to the appeal, applied for a costs order under s 611 of the Fair Work Act 2009 (Cth) (FW Act) in relation to the appeal. Section 611 of the FW Act relevantly provides:
Costs
(1) A person must bear the person's own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780. ...
[3] Qantas' costs application is advanced under both s 611(2)(a) (specifically, that Captain Lucas' appeal was brought without reasonable cause) and s 611(2)(b). We note that even if either subsection is satisfied, the Commission is not obliged to order costs. Whether costs are to be awarded at all, and the amount of any costs that are awarded, involves the exercise of a discretion.[3] In Keep v Performance Automobiles Pty Ltd[4] (Keep), a Full Bench of the Commission summarised the principles relevant to when an application is made without reasonable cause:
The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter[n] Health Great Health and Wellbeing (Church). Church is authority for the following propositions:
(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.
(ii) A party cannot be said to have made an application 'without reasonable cause' within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.
(iii) One way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.
(iv) The test imposed by the expression 'without reasonable cause' is similar to that adopted for summary judgment, that is, 'so obviously untenable that it cannot possibly succeed', 'manifestly groundless' or 'discloses a case which the Court is satisfied cannot succeed'.
The concepts within s.611(2)(b) 'should have been reasonably apparent' and 'had no reasonable prospect of success' have been well traversed:
[6] Qantas submits that our conclusions in the appeal decision demonstrate that Captain Lucas' appeal was made without reasonable cause and/or had no reasonable prospect of success. The factual premises on which these conclusions were expressed were well-known to Captain Lucas, including at the time of filing the application for permission to appeal, and thus, Qantas submits, Captain Lucas ought reasonably to have known that there were no substantial prospects of success at that time. Qantas also submits that it was relevant that Captain Lucas' notice of appeal was filed a little over 24 hours after the decision under appeal was published, because this demonstrated a lack of consideration of the merits and prospects of success of the appeal. Qantas submits that there is no particular reason in this case as to why, having crossed the threshold for the exercise of the costs power, the discretion should not be exercised in favour of an order for costs.
[7] Qantas' costs application was accompanied by an itemised schedule of costs drawn by reference to the schedule of costs in Sch 3.1 to the Fair Work Regulations 2009 (Cth) (FW Regulations). The total amount claimed is $18,424.00, of which the major component is disbursements of $17,100.00 for counsel's fees (calculated as 19 hours at $900.00 per hour). Qantas also claims additional amounts as considered reasonable by the Commission for certain costs items in accordance with Sch 3.1.
[8] Captain Lucas submits that there was a reasonably available argument that the decision under appeal was attended by sufficient doubt as to warrant its review and that the appeal gave rise to issues of importance and general application concerning disqualification by reason of apprehended bias. Had either circumstance been established, he submits, it was likely that permission to appeal would have been granted. In support of these propositions, Captain Lucas submits that:
(1) It is an accepted principle that, where a later proceeding (notwithstanding that it involves the same parties) will require the decision-maker to consider an issue about which they had ruled in an earlier proceeding, this may be sufficient to give rise to an apprehension of bias. This principle afforded reasonable cause for the making of the application for permission to appeal. In this case, the issue decided in an earlier proceeding before Commissioner Ryan was the admissibility of legal advice received by the AIPA. That issue could have arisen in the proceedings before the Commissioner in which the decision under appeal was made, notwithstanding that Captain Lucas had not filed the advice as part of his evidentiary case in those proceedings. Contrary to the conclusions in the appeal decision, this legal advice did not constitute only a minor aspect of Captain Lucas' evidentiary case, and he had identified the logical connection between the Commissioner's ruling on the admissibility of the advice in the earlier matter and the feared deviation from the course of deciding the matter before him on its merits.
(2) Although not accepted by the Full Bench, the argument and other grounds raised by Captain Lucas in his notice of appeal articulated, at least, a reasonable cause for the application for permission to appeal.
[9] Captain Lucas submits that the Commission is not in a position to find that it should have been reasonably apparent to Captain Lucas that his application for permission to appeal had no reasonable prospect of success because:
(1) The application was not made without reasonable cause.
(2) The grounds of appeal were not contrary to any authority. As stated in the appeal decision, the application of the apprehended bias principle necessarily turned on the particular facts and circumstances of the relevant matters. It was a question about which reasonable minds might reasonably differ.
(3) There is no evidence that Qantas put Captain Lucas on notice that his application for permission to appeal was manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable
[10] As to the exercise of the discretion if it arises, Captain Lucas submitted that the award of costs in the amount claimed would not be fair and just (see s 577 of the FW Act) because:
(1) If the application for permission to appeal was so lacking in merit or substance as to be not reasonably arguable, then it must necessarily follow that relatively little work was reasonably required to respond effectively to it - certainly not 19 hours of counsel's time. The hearing in fact only took one hour.
(2) There is no information contained in the itemised schedule as to the work done, and claimed, by counsel. In that circumstance, the Commission is not in a position to assess whether it would be fair and just to make an award in respect of those costs.
[11] Captain Lucas therefore submits that any award of costs should be for the hearing and a limited amount of preparation.
[12] We are satisfied, for the purpose of s 611(2)(a) of the FW Act, that Captain Lucas' appeal application in this matter was made without reasonable cause because the grounds of appeal, and the grounds upon which permission to appeal was sought, were untenable and manifestly groundless. In the appeal decision, we concluded for the reasons there set out that Captain Lucas' case in his appeal that the Commissioner was disqualified from further dealing with the matter before him was 'completely without merit' and that his appeal raised no arguable case of appealable error.[8] Those conclusions meet the threshold required by s 611(2)(a). We do not, as Captain Lucas' submissions invite us to, propose to revisit those conclusions now. Because we have reached the requisite state of satisfaction in respect of s 611(2)(a), it is not necessary for us to consider whether s 611(2)(b) also applies.
[13] We consider that we should exercise our discretion in favour of making an award of costs in Qantas' favour. Qantas was put to unnecessary expense in responding to the appeal, and we consider that it was reasonable having regard to the nature of the issues raised by the appeal that Qantas obtain legal representation for the hearing of the appeal. In this respect, we take into account that Qantas sought permission for legal representation under s 596(2) of the FW Act at the commencement of the hearing, that Captain Lucas did not oppose this application, and that we accordingly granted permission.
[14] The appeal hearing only ran for a short period, as submitted by Captain Lucas, and concerned only the preliminary issue of permission to appeal. We consider therefore that costs should be awarded as appropriate for a short interlocutory hearing. Item 1301 of Sch 3.1 to the FW Regulations treats counsel's fees as a disbursement which may be charged at '[a]n amount that the FWC considers to be fair and reasonable according to the circumstances of the case and the seniority of counsel.' We are guided as to what is fair and reasonable by the Federal Court of Australia's 'National Guide to Counsel's Fees', which may be applied to the taxation of costs in the Court. This guide allows for an amount in the range of $370.00 - $2,125.00 to be awarded for junior counsel briefed in a short interlocutory hearing. Taking into account that the matter was an application for permission to appeal before a Full Bench, and the Court's guide has not been updated since 2013, we propose to award the maximum amount in the range of $2,125.00. In respect of Item 11, the attendance at the hearing by counsel's instructing solicitors, Qantas claims an amount of $442.00 for the attendance of two solicitors (charged at one hour each) pursuant to item 1109 of Sch 3.1. We consider that the attendance of two solicitors was unnecessary, so we will award an amount of $221.00.
[15] In respect of the pre-hearing costs claimed (including an unspecified proportion of counsel's costs), Qantas did not file a Form F53 notice to either advise it had engaged legal representatives for the conduct of the appeal, as required by rule 11(1) of the Fair Work Commission Rules 2013 (Cth), or to inform the Commission that it would be seeking permission to be represented at the appeal hearing pursuant to rule 12A(1).
[16] However, when considering whether Qantas had placed Captain Lucas on notice prior to the hearing that it was incurring costs for which he might potentially be liable,[9] we note there was confirmation from Qantas that it had engaged legal representation for the appeal which was provided to the Commission and Captain Lucas in an email sent at 5.24 pm on 20 April 2023. Further, this confirmation was provided within the following context:
(1) The appeal was lodged on Friday 14 April 2023 and almost immediately followed another appeal (C2023/1931) arising out of the proceeding before Commissioner Ryan, which was heard on Monday 17 April 2023 (the first appeal);
(2) In the first appeal, Qantas sought and was granted permission to be legally represented by the Commission and its application was not opposed by Captain Lucas;[10]
(3) The addressees listed in the Commission's Notice of Listing for the appeal dated 18 April 2023 included the instructing solicitor and counsel for Qantas;
(4) Captain Lucas copied the instructing solicitor and counsel for Qantas into correspondence sent to the Commission on 18 April 2023, in which reference was made to 'the Respondent's representatives';
(5) Both the Commission's response to Captain Lucas sent on 19 April 2023, and its further correspondence to the parties sent on 19 April 2023 with access to the appeal book, copied in the instructing solicitor and counsel for Qantas; and
(6) Further correspondence from Captain Lucas to the Commission sent at 3.03 pm on 20 April 2023 also copied in the instructing solicitor and counsel for Qantas.
[17] Additionally, Captain Lucas has conceded that if there is any award of costs, it should be for the hearing and a limited amount of preparation. We therefore consider it appropriate to award some costs in respect of pre-hearing work undertaken by Qantas' legal representatives because while Qantas did not obtain permission for legal representation until the commencement of the hearing and the Commission made no direction requiring Qantas to take any specific step prior to the hearing on 21 April 2023, the appeal nonetheless required a response and some preparation.
[18] However, we are not persuaded that costs in the amount sought by Qantas are appropriate, having regard to the following matters:
(1) There is no evidence, as Captain Lucas submitted, that Qantas took any step to advise him that it considered that his appeal was not reasonably arguable and untenable, or place him on notice that it might seek to recover costs from him if his appeal failed. In our view, this is a matter to be weighed because parties sometimes unreasonably initiate proceedings on the basis of flawed legal advice, and such a notice may cause such a party to reconsider their position and seek further or alternative legal advice.
(2) In respect of the claim for counsel's fees, Qantas has not provided any particulars of the pre-hearing work undertaken by counsel which would permit us to make an assessment of the reasonableness of the incurrence of such costs.
[19] As to the itemised schedule of costs submitted by Qantas:
Item 1 is a claim for perusing the Form F7 Notice of appeal in the amount of $408.00 representing perusal by two solicitors pursuant to item 601 of Sch 3.1 to the FW Regulations. We consider that perusal by two solicitors was unnecessary, so we will award an amount of $204.00.
Item 4 is a claim for perusing the letter from Captain Lucas to the Commission dated 18 April 2023 in the amount of $144 representing perusal by two solicitors pursuant to item 601 of Sch 3.1 to the FW Regulations. Regulation 6.06(4) of the FW Regulations outlines that a folio equates to 72 words and a note in regulation 6.06(4) suggests there are generally three folios per page. The letter therefore comprises approximately 18 folios and item 601(a)(ii) of Sch 3.1 allows $4.00 per folio. Having regard to these factors, and our view that perusal by two solicitors was unnecessary, we will award an amount of $72.00.
Item 5 is in respect of a letter prepared but not sent. We decline to award an amount for this.
Item 6 is a claim for perusing the letter from the Commission to Captain Lucas dated 19 April 2023 in the amount of $32 representing perusal by two solicitors pursuant to item 601 of Sch 3.1 to the FW Regulations. Item 601(a)(i) of Sch 3.1 allows $16.00 for the perusal of a document of up to three folios. Having regard to these factors, and our view that perusal by two solicitors was unnecessary, we will award an amount of $16.00.
Item 7 is a claim for perusing the appeal book in an amount considered reasonable by the Commission (item 601(b) of Sch 3.1). We have however noted the appeal book comprises material from the various proceedings involving Captain Lucas and Qantas that the parties were already familiar with. We therefore consider item 701 of Sch 3.1, which covers the examination of an appeal book, to be appropriate and will award an amount of $74.00 for a half hour examination by a solicitor.
Item 8 is a claim for perusing the letter from Captain Lucas to the Commission dated 20 April 2023 in the amount of $32, representing perusal by two solicitors pursuant to item 601 of Sch 3.1 to the FW Regulations. Item 601(a)(i) of Sch 3.1 allows $16.00 for the perusal of a document of up to three folios. Having regard to these factors, and our view that perusal by two solicitors was unnecessary, we will award an amount of $16.00.
Item 9 is a claim for drawing the bundle of authorities of Qantas pursuant to item 301 of Sch 3.1 to the FW Regulations in an amount considered reasonable by the Commission. We therefore consider item 501 of Sch 3.1, which covers the copying of documents at the rate of $2.00 per page, to be appropriate and will award an amount of $86.00 for the 43 pages.
Item 10 is a claim for drawing an 'Overview of evidence' document pursuant to item 301 of Sch 3.1 to the FW Regulations, which was filed with the Commission. Regulation 6.06(4) of the FW Regulations outlines that a folio equates to 72 words and a note in regulation 6.06(4) suggests there are generally three folios per page. The document comprises nearly seven folios and Item 301 of Sch 3.1 allows $8.00 per folio. Having regard to these factors, we will award the amount of $56.00 claimed.
[20] As to counsel's costs, the amount claimed (item 13 of the schedule of costs) is comprised of 19 hours at the rate of $900.00 per hour inclusive of GST. We have already determined to award $2,125.00 for the attendance of counsel at the hearing. The 'National Guide to Counsel's Fees' also allows for an amount for preparation time in the range of $265.00 - $530.00 per hour. Consistent with our determination for the appearance at the hearing, we propose to award an hourly rate at the maximum amount in the range. However, there are no particulars provided as to work constituting the total hours claimed by counsel. We are therefore not persuaded the total fees of counsel were reasonably incurred. We will however award an amount representing four hours' preparation, equating to $2,120.00.
[21] Accordingly, we award costs in Qantas' favour to the amount of $4,990.00 pursuant to s 611(2) of the FW Act. An order[11] to give effect to this decision is published together with this decision.
[3] Hansen v Calvary Health Care Adelaide Limited [2016] FWCFB 8162 at [16].
[4] [2015] FWCFB 1956 at [17]; more recently followed in Richardson v MBP (WA) Pty Ltd atf Sun Laundry Services Unit Trust [2020] FWCFB 2219.
[5] R v Moore; ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473.
[6] Zornada v St John Ambulance Australia (Western Australia) Inc. [2013] FWCFB 8255, 237 IR 48 at [35].
[7] [2011] FWAFB 4014, 2011 IR 174 at [10]; more recently followed in Vassallo v Easitag Pty Ltd [2021] FWCFB 3974.
[8] [2023] FWCFB 80 at [18]- [23].
[9] Luke Tamu v World Vision Australia [2020] FWCFB 5342 at [23].
[10] Transcript - 17 April 2023, PNs 3-7.
Printed by authority of the Commonwealth Government Printer
Captain Anthony Lucas
Qantas Airways Limited [2023] FWCFB 147
(1978) 140 CLR 470
Item 12 is a claim for general care and conduct by the solicitors for Qantas pursuant to item 1201 of Sch 3.1 to the FW Regulations. Item 1201 provides that if the case or circumstances warrant it, an allowance may be claimed in addition to any other item that appears in Sch 3.1, for general care and conduct in relation to the complexity of the matter and the difficulty and novelty of questions raised, the importance of the matter to the party and the amount involved, the skill, labour, specialised knowledge and responsibility involved in the matter on the part of the solicitor, the number and importance of the documents prepared or perused, without regard to length, the time taken by the solicitor, research and consideration of questions of law and fact. Pursuant to item 1201 the Commission may allow an amount the Commission considers reasonable in the circumstances of the case. In circumstances where Qantas has provided no particulars in relation to these considerations, and noting this was a matter in which counsel was briefed, we decline to make an award for item 12.
Items 2 and 3 are claims for drawing a necessary document for counsel, comprising a research note for counsel in relation to the Commission's powers to order a stay. We decline to order the amounts claimed on the basis that we are not persuaded the document was necessary in the circumstances of this proceeding.