Dahdah v Platinum Distributors Australia Pty Ltd

Federal Court of Australia (Full Court)|2023-06-30|Before: Beach JJ, White J, McElwaine JJ

The appellant pay the second respondent's costs of the appeal, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A. Introduction 1 On 5 May 2023, we dismissed the appellant's appeal and published our reasons for doing so: Dahdah v Platinum Distributors Australia Pty Ltd [2023] FCAFC 65 (appeal judgment). Some familiarity with the appeal judgment is assumed in these reasons and we will again refer to the second respondent as the respondent. 2 On that day, we also made orders for the filing of evidence and submissions concerning costs and for the question of costs to be determined on the papers. Neither active party filed evidence, but each filed submissions. By those submissions the respondent seeks, and the appellant resists, the making of an order requiring the appellant to pay the respondent's costs of the appeal. For the reasons set out below, such an order should be made.

C. Enlivenment of the discretion 5 The discretion in s 570(1) of the FW Act to award costs in favour of a party to a proceeding is enlivened only in accordance with s 570(2), s 569 or s 569A: s 570(1). In the present case, ss 569 and 569A are not relevant but s 570(2) is. The effect of s 570(2) is to provide that the s 570(1) discretion is enlivened if the party against whom the costs order is sought: (1) instituted the proceeding vexatiously (s 570(2)(a)); (2) instituted the proceeding without reasonable cause (s 570(2)(a)); (3) unreasonably performed an act or made an omission that caused the other party to incur the costs sought (s 570(2)(b)); or (4) unreasonably refused to participate in a matter before the Fair Work Commission where that matter arose from the same facts as the proceeding (s 570(2)(c)).

Relevant principles 6 For present purposes only the criteria described in [5(2) and (3)] above are relevant.

Institution of a proceeding without reasonable cause - s 570(2)(a) 7 In Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166; (2014) 145 ALD 548, the Full Court (Dowsett, Tracey and Katzmann JJ) made the following observations concerning "without reasonable cause" in the context of an appeal (at 449 to 550 ([9] to [10])), which we endorse: [9] The meaning and application of the phrase "without reasonable cause" in s 570 and its predecessors has been considered in many cases. The effect of these authorities was recently summarised by Pagone J in Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351. His Honour said (at [8]) that: "To exercise the discretion conferred by [s 570(2)(a) of the FW Act] the Court must be satisfied that the claims were, relevantly, instituted without reasonable cause. That is not established merely because a party fails in the claims: R v Moore; ex parte Federated Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470, 473. The relevant provisions reflect 'a policy of protecting a party instituting proceedings from liability for costs' and costs will rarely be awarded unless justified by exceptional circumstances: see Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]. In Kangan Batman Institute it was said by the Full Court at [60] that 'a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure'. In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Wilcox J indicated at 264 that one way of testing whether a proceeding was instituted 'without reasonable cause' was to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no 'substantial prospect of success'. His Honour went on to say that a proceeding lacks a reasonable cause where it is clear that it must fail on the applicant's own version of the facts." [10] This test requires some minor modification when applied to the institution of an appeal or judicial review proceedings. In such proceedings the focus changes to whether, having regard to the facts apparent to the appellant at the time of instituting the appeal or the application for judicial review, there were no reasonable prospects of success. In evaluating these prospects regard may be had to the reasons for judgment or decision under appeal or review, as the case may be, and the grounds relied on to challenge the judgment or decision: see Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257 (Wilcox CJ).

Unreasonable act or omission that caused another party to incur costs - s 570(2)(b) 8 In Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574, the Full Court (Tamberlin, Gyles and Gilmour JJ) made the following observations concerning "an unreasonable act or omission" (at 582 [29]): 29. In our view, the respondent has not engaged in "an unreasonable act or omission". As the authorities indicate, there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable: Australian and International Pilots Association 162 FCR at 402; Standish v University of Tasmania (1989) 28 IR 129 at 138-139. Simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion in s 824(2) of the WR Act to make a costs order. ... Indeed, while courts should use the discretion in s 824(2) to ensure that parties to litigation arising from the WR Act do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise the discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation under the WR Act in the manner which they deem best. 9 As Katzmann J explained in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3) [2017] FCA 810 at [25], this s 570(2) criterion requires proof that: (1) the party against whom costs are sought has by its action(s) or omission(s), behaved unreasonably, a question that is to be determined objectively (Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879; (2007) 162 FCR 392 at 402 [32] (Tracey J)); and (2) those unreasonable act(s) or omission(s) caused the other party to incur costs.

The parties' contentions 10 The respondent contends that the Court's discretion has been enlivened by the satisfaction of both s 570(2)(a) and (b). In particular, he contends that: (1) the appellant instituted the appeal without reasonable cause within the meaning of s 570(2)(a) because the appeal had no reasonable prospects of success; and (2) the appellant's maintenance of an unmeritorious appeal was an unreasonable act which caused the respondent to incur costs unnecessarily within the meaning of s 570(2)(b). The respondent's submissions in support of those contentions may be summarised as follows: (1) the starting point is that the primary judge had already made a costs order under s 570(2): Dahdah v Platinum Distributors Australia Pty Ltd (No 3) [2022] FCA 1553 (primary costs judgment). At [17] of the primary costs judgment, the primary judge found that the proceeding at first instance had been brought "without reasonable cause" because upon the facts apparent to the appellant at the time of instituting that proceeding, there was no "substantial prospect of success" as, had the applicant told the truth, he would have known he would not succeed; (2) on appeal, the appellant had a high hurdle to overcome to set aside the adverse credit findings that underpinned the primary judge's factual findings giving rise to the dismissal of the appellant's application in the primary judgment: Dahdah v Platinum Distributors Australia Pty Ltd (No 2) [2022] FCA 416; and (3) none of the appellant's contentions on appeal had any merit and all were without reasonable cause in that they sought to undermine the primary judge's carefully considered findings in the primary judgment by reference to evidence that: (1) the primary judge had rejected on credit grounds; or (2) did not gainsay the primary judge's findings; and (4) this Court comprehensively rejected each ground of appeal. 11 The appellant contends that: (1) the discretion under s 570 of the FW Act to award costs is enlivened only if the Court considers that his appeal was vexatious; (2) the respondent has not established that the appeal was vexatious; and (3) thus, the discretion to award costs does not arise and no costs order should be made. He did not otherwise address the respondent's submissions.

Consideration 12 As is apparent from the text of s 570, and contrary to the appellant's submissions, it is not necessary for the Court to be satisfied that the appellant instituted the appeal vexatiously in order to enliven the discretion in s 570(1) of the FW Act. As noted at [5] above, other means of enlivening the discretion include, relevantly, the Court being satisfied that the appeal was instituted without reasonable cause (s 570(2)(a)) or the Court being satisfied that an unreasonable act or omission of the appellant caused the respondent to incur the costs in respect of which an order is sought (s 570(2)(b)). 13 These two criteria have a considerable factual overlap in the present case and it is convenient to consider them together. 14 The starting point is to consider what facts were apparent to the appellant (objectively) at the time that the appeal was instituted. At that time the appellant had: (1) the primary judge's detailed reasons in the primary judgment; (2) the primary judge's reasoning in the primary costs judgment; and (3) the notice of appeal. 15 In our view, taking these matters into account, the appeal had no reasonable prospects of success, for the following reasons. 16 The findings in the primary judgment that were challenged on appeal related to three issues. These are described in a summary form in the appeal judgment at [5] to [14]. 17 The first issue and the primary judge's findings concerning that issue were described in the appeal judgment as follows: 5. The first and central issue was whether the appellant's employment by Platinum ended on 26 June 2015 as a result of a conversation of that date between the appellant and the respondent (26 June 2015 conversation) as the respondent contended, or continued past that date and until October 2017 (as the appellant contended). 6. The primary judge found that the appellant's employment ended as a result of the 26 June 2015 conversation. He reached that finding by: accepting the evidence of two other participants in that conversation as to what was said; relying upon minutes of a meeting between the respondent and his accountant on 30 June 2015 (30 June 2015 minutes) which record the respondent's statement that the appellant had resigned; accepting the evidence of John (the appellant's uncle and the respondent's father), that during a conversation with the appellant on 5 July 2015 (5 July 2015 conversation) the appellant asked John for employment with John's company Veejay Pty Ltd and that the appellant thereafter worked for Veejay; and finding that group certificates for the 2016 and 2017 financial years (2016 and 2017 group certificates) - which suggested that the appellant was in the employ of Platinum during those financial years - were false documents which the respondent caused to be prepared because of a request of the appellant, his sister (Jousephine) and niece (Jouliana) made during a family meeting on 13 September 2017 (13 September 2017 family meeting) so as to assist the appellant to satisfy a condition of his visa and thereby assist in his application for permanent residency in Australia. 7. These key findings were squarely based upon the primary judge's views as to the credit of the appellant, the respondent and various witnesses. The primary judge was not prepared to accept the evidence of the appellant or the respondent without corroboration. He did not rely upon their uncorroborated evidence and made his findings: (1) as to the 26 June 2015 conversation upon his acceptance of the evidence of two other witnesses, Mr Boustany and Mr Atie; (2) as to the 5 July 2015 conversation on his acceptance of John's evidence; and (3) as to the 2016 and 2017 group certificates upon the evidence of Jousephine and Jouliana. (emphasis in original) 18 As we identified in the appeal judgment at [8], any challenge to these findings - given the central role played by credit findings in the primary judge's reasoning - required the appellant to persuade this Court that the primary judge's findings were wrong because they were contrary to incontrovertible facts or uncontradicted testimony, or were glaringly improbable, or contrary to compelling inferences. 19 The matters identified by the appellant in the notice of appeal were not capable of doing so. Instead, they were matters which, if accepted, would merely have been capable of supporting contrary findings, and fell well short of the requisite standard. A further obstacle to the appellant's challenge to the primary judge's findings on the first issue was the existence of a contemporaneous set of minutes of an important meeting, which contradicted the appellant's version of events and which the appellant did not seek to impugn on appeal: see the appeal judgment at [10]. 20 Taking all of the above into account, the appellant did not have reasonable prospects of success on the first issue. 21 The second issue and the primary judge's findings concerning that issue were described in summary in the appeal judgment as follows: 11. The second issue for determination by the primary judge was whether, between 5 July 2015 and October 2016 the appellant was employed by Veejay (as the respondent contended); or by Platinum on secondment to Veejay (as the appellant contended). The primary judge found that the appellant was employed by Veejay. This finding was also based upon credit findings, namely the primary judge's acceptance of John's evidence and his refusal to accept the appellant's evidence absent corroboration… 22 The appellant's challenge to the findings on this issue: (1) was, again, based principally upon the existence of other evidence which the appellant contended was capable of supporting a contrary finding and again fell well short of the requisite standard; and (2) in part, comprised a contention that the primary judge failed to deal with particular evidence. As we noted in the appeal judgment at [12] and [13], whilst a court may, in some circumstances, err by overlooking or failing to deal with evidence, there is no absolute duty to deal with particular evidence and for an error to arise the evidence in question must be of such significance that unless disposed of it stands in the way of the court's conclusions; and none of the evidence identified by the appellant was of such significance that the primary judge was required to deal with it expressly in his reasons. 23 Thus, the appellant did not have reasonable prospects of success on the second issue. 24 The third issue and the primary judge's findings concerning that issue were described in summary in the appeal judgment as follows: 14. The third issue for determination by the primary judge was whether prior to 26 June 2015, Platinum paid the appellant all of the wages due to him. The primary judge found that the appellant had not proven that there was a shortfall in the wages paid by Platinum. In reaching that finding, the primary judge took into account a tax return (2015 tax return) and a notice of assessment (2015 notice of assessment) for the appellant for the financial year ending 30 June 2015, which suggested that such wages had been paid. (emphasis in original) 25 This was a finding based upon contemporaneous documents. The appellant sought to overturn this finding by reference to various matters including the appellant's denial that Platinum had paid wages to him and because (the appellant contended) it was possible that the respondent caused Platinum to pay withholding tax to the Australian Taxation Office but did not pay the appellant. 26 The appellant did not have reasonable prospects of success on this issue in circumstances where it depended upon: (1) an acceptance of the appellant's denial that he had been paid, which was a forlorn task for the reasons discussed at [18] and [19] above and in the face of contemporaneous documents; and (2) persuading this Court to accept that the primary judge erred in not finding that the respondent caused Platinum to pay withholding tax to the Australian Taxation Office but not to pay the appellant in circumstances where this would require proof that the 2015 tax return contained false representations and that the respondent engaged in serious misconduct when an evidentiary foundation for the basis of such serious allegations had not been established and, as the primary judge noted at J[242], such a position was not put to the respondent. 27 The primary costs judgment underscored the enormity of the task faced by the appellant on appeal by emphasising the centrality of the primary judge's creditability findings. In that judgment, the primary judge found that s 570(2)(a) was satisfied in relation to the hearing below because: (1) he found the appellant's evidence to have been false or fabricated in a number of respects (at [13] to [16]); (2) the appellant must have been aware of the falsity of his evidence from the outset of the proceeding (at [16]); and (3) the appellant must have known at the time that he instituted the proceeding that had he told the truth his action would have failed (at [17]). 28 Finally, the matters described at [14] to [27] above in connection with the institution of the appeal, apply with equal force to the maintenance of the appeal through to judgment. The institution of the appeal and its maintenance were thus unreasonable acts of the appellant within the meaning of s 570(2)(b). We readily infer that the maintenance of the appeal caused the respondent (who was legally represented) to incur costs. 29 It follows that we are satisfied that: (1) the appellant instituted the appeal without reasonable cause within the meaning of s 570(2)(a); and (2) the appellant's maintenance of an unmeritorious appeal was an unreasonable act which caused the respondent to incur costs unnecessarily within the meaning of s 570(2)(b).

D. Exercise of the discretion 30 For the reasons set out above, the s 570(1) discretion is enlivened. 31 The matters relevant to the satisfaction of the criteria, which are discussed at [14] to [28] above also inform the exercise of the discretion. However, it does not follow as a matter of course from the satisfaction of a s 570(2) criterion that the discretion is to be exercised so as to make an order for costs: see Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23; (2013) 232 FCR 428 at 430 [8] (Dowsett, McKerracher and Katzmann JJ). In Shea v Energy Australia Services Pty Ltd (No 2) [2015] FCAFC 14, the Full Court (Rares, Flick and Jagot JJ) explained at [11] that once a s 570(2) criterion has been satisfied the power to order costs is discretionary and: should be exercised, not so as to impose a penalty or punishment on the losing party but to provide an appropriate means of compensating the successful party having regard to all of the circumstances: see Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56; (2007) 234 CLR 52 at 62-65 [24]-[34] per Gleeson CJ, Gummow, Hayne and Crennan JJ; Kazar v Kargarian [2011] FCAFC 136; (2011) 197 FCR 113 at 115-117 [2]-[9] per Greenwood and Rares JJ. 32 In Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190, the Full Court (Siopis, Collier and Katzmann JJ) explained at [8]: Section 570 of the FW Act confers discretion on the Court to order costs in Fair Work matters where proceedings were instituted vexatiously or without reasonable cause. Not only must this discretion be exercised judicially according to the terms defining it, it must be exercised with caution because of the exceptional nature of the power in an otherwise no-costs jurisdiction. The case for its exercise should be clearly demonstrated: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6]. As Mortimer J observed (correctly, in our opinion) in Ryan v Primesafe [2015] FCA 8 at [64]: 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. Insofar as it operates to the benefit of respondents, it is designed to ensure respondents feel free to pursue arguable legal and factual responses to the claims made against them. (cf Barker J in Pettit v Evolution Mining Ltd [2016] FCA 1304 at [62].) 33 We have had regard to the caution expressed in Shea and MTGI Trust and similar authorities. We have also had regard to the particular circumstances of the present case described at [14] to [28] above and our satisfaction that the appellant instituted an appeal without reasonable prospects of success, unreasonably maintained that appeal, and thereby caused the respondent to incur costs. Having done so, we are of the view that the appropriate exercise of the discretion is to require the appellant to pay the respondent's costs of the appeal.

E. Conclusion 34 The appellant should pay the respondent's costs of the appeal. We will make an order to that effect. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Rangiah, Goodman and McElwaine.

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