Descon Group Australia Pty Ltd v Rodd

Background 5 Mr Wavish was employed by Descon as a Site Manager until 1 June 2020, when his employment was terminated. During his employment at Descon, Mr Wavish reported to Mr Rodd, who was employed by Descon as a Project Manager until 30 April 2020, and then was contracted as a consultant until 10 July 2020. 6 On 16 October 2020, Mr Wavish commenced proceedings in the then Federal Circuit Court of Australia seeking damages for breach of contract as well as declarations and orders to the effect that Descon had contravened the FW Act by first, reducing his contract and/or unlawfully varying his contract and second, terminating his employment for serious misconduct. Descon alleged that Mr Wavish failed to attend work and provide supervision to high risk works on 30 May 2020. 7 On 13 January 2021, Descon filed its response to Mr Wavish's claim, admitting that it had reduced Mr Wavish's salary and terminated his employment, but denying any breach of Mr Wavish's contract or the FW Act. In particular, Descon pleaded that Mr Rodd did not have the "requisite authority to excuse" Mr Wavish from work on 30 May 2020, and that following an "investigation" it had become aware that Mr Wavish had "failed to attend for work without lawful justification on 49 days, including 30 May 2020". Descon identified each day that it said Mr Wavish was absent without lawful justification. 8 On 15 February 2021, Mr Rodd filed an affidavit in support of Mr Wavish deposing to first, that he was authorised by Descon to make decisions with respect to Mr Wavish's employment, including the approval of leave; second, Descon applied the CFMMEU RDO calendar; third, Mr Wavish often worked hours in excess of his contract and fourth, he had discussed and approved each absence with Mr Wavish, including his absence on 30 May 2020. 9 On 1 April 2021, Descon filed a cross-claim against Mr Wavish and Mr Rodd. By its amended statement of cross-claim dated 2 July 2021, Descon asserted a breach of contract by Mr Wavish for taking 49 days of leave in breach of the leave conditions of his employment contract and for failing to obtain the necessary authority from, amongst others, Mr Rodd. Descon further alleged that Mr Wavish: failed to complete any leave application, took days without authority, failed to give a reasonable basis for the leave and took the leave in circumstances where he "knew or ought to have known his actions were covert and were concealed to his superiors". Descon also claimed that Mr Wavish engaged in serious misconduct by failing to attend work on 30 May 2020, despite Saturdays being "usual work days according to industry standards and the practices of" Descon and despite high risk work requiring his direct supervision as site manager. Descon claimed loss consequent upon these breaches by Mr Wavish, particularised as a (novel) general claim for unliquidated damages for breach of contract as well as a liquidated claim for compensation for unlawful leave. 10 The cross-claim continued by pleading that if Mr Wavish had obtained verbal permission from Mr Rodd to be absent on the 49 identified days, then Mr Wavish had breached his contract as, amongst other things, Mr Rodd had no power or authority to approve Mr Wavish's leave or, after 30 April 2020, at all. By purporting to provide leave approval to Mr Wavish, Mr Rodd acted in breach of contract and refused or neglected to perform his duties, acted dishonestly by concealing Mr Wavish's absenteeism or by failing to report it. By reason of those matters, Descon claimed damages against Mr Rodd for breach of contract. 11 On 14 June 2021, being a date prior to the filing of the amended statement of cross-claim, Mr Rodd's solicitor sent two relevant letters to Descon's solicitor. One, an open letter and the other, a Calderbank letter. The open letter set out "a comprehensive rebuttal of Descon's claims of unauthorised absence by Mr Wavish": PJ [25]. In the Calderbank letter, Mr Rodd offered to resolve the cross-claim on the basis that Descon discontinue it and Mr Rodd would bear the costs he had incurred to date. The offer was open for acceptance for 14 days. 12 The proceeding and the cross-claim were set down for hearing before the primary judge on 25 July 2022. The week before the trial commenced, Mr Wavish resolved his claims with Descon and the other respondents and separately, Descon filed a notice of discontinuance in respect of its claims against Mr Rodd. 13 On 27 July 2022, the primary judge heard an application by Mr Rodd for his costs of the cross-claim. The application was first notified in an email sent by Mr Rodd's solicitor to Irish Bentley on 25 July 2022 where "[a]s a matter of professional courtesy" notice was given that Mr Rodd would seek his costs on an indemnity basis and that Irish Bentley "be responsible for" those costs. The application was refined in accordance with the written submissions of Mr Rodd dated 26 July 2022. Descon and Irish Bentley jointly filed a submission on 26 July 2022 to the effect that there be no order as to costs. 14 The primary judge accepted Mr Rodd's submission that Descon instituted proceedings against him vexatiously and without reasonable cause pursuant to s 570(2)(a) of the FW Act and found that the institution of the cross-claim and filing of the amended cross-claim constituted unreasonable acts or omissions that caused Mr Rodd to incur costs: s 570(2)(b). Further, the primary judge found that it was abundantly clear to Descon by 14 June 2021, that the proceedings were without merit, as the correspondence from Mr Rodd's solicitor was sufficient to put Descon and its solicitor on notice that it needed to make further enquiries about its evidence and that "Descon knew or ought to have known that its claim in the form of the original cross-claim could not be sustained given the open letter from Mr Rodd's solicitors": PJ [53]. 15 His Honour also accepted Mr Rodd's submission that a costs order should be made against Irish Bentley. In particular, the primary judge found that the lawyers instituted and continued the cross-claim contrary to their obligations at r 21 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (Conduct Rules) and ss 190 and 191 of the FCFCOA Act. The core finding by the primary judge is that Irish Bentley did not have reasonable grounds to justify the making of serious allegations of impropriety and misconduct amounting to fraud committed by Mr Rodd. 16 It is necessary to summarise in a little more detail the findings of the primary judge. The hearing of the costs application, with respect, lacked structure. Ordinarily, where a matter is not heard on the merits, any costs application falls to be resolved in accordance with the principles identified by McHugh J in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 (Qin) at 624: "[t]he court cannot try a hypothetical action between the parties", but may be able to conclude that a party has acted unreasonably so as to justify departure from the usual rule that there be no costs order. 17 However in this case, counsel for Mr Rodd, Descon and Irish Bentley made extensive reference in their written submissions and orally to the affidavits of various witnesses filed in the primary proceeding and the cross-claim. None of those affidavits were taken as read before the primary judge, no admissibility objection was raised and no deponent was required for cross-examination. What is apparent from the transcript before the primary judge is that each counsel assumed that all of the affidavit evidence was before the primary judge in order to make the various findings of fact contended for. Somewhat obviously, this placed the primary judge in a difficult position in that he was required to resolve competing submissions based on contestable facts. That problem was compounded in that the primary judge was invited by Mr Rodd to make quite serious findings of misconduct in the prosecution of the cross-claim separately against Descon and Irish Bentley. 18 Despite these difficulties, the primary judge relevantly found as follows. First, he did not accept, and was critical of, affidavit evidence from a director of Descon, Mr Quinn who had deposed to the conduct of an investigation into Mr Wavish's 49 disputed days of absence: PJ [35]-[36]. Second, he found that another director of Descon, a Mr Lockhart, was an important witness in the proceeding, being the only person capable of disputing the evidence of Mr Rodd that he had authority to authorise the taking of leave by Mr Wavish. The primary judge was critical of the fact that Mr Lockhart did not file an affidavit: PJ [37]. 19 Third, the claim made by Descon that Mr Rodd unlawfully authorised Mr Wavish to take leave, "could not be meaningfully advanced" without Descon obtaining instructions and evidence from Mr Lockhart: PJ [39]. 20 Fourth, the pleading in the amended cross-claim that Mr Rodd "covertly concealed" his leave authorisations in favour of Mr Wavish, was not supported by Mr Quinn's affidavit evidence: PJ [41]. 21 Fifth, no evidence was adduced by Descon in support of the damages claim against Mr Wavish and Mr Rodd: PJ [41]. Sixth, Descon failed to answer Mr Rodd's "comprehensive" reply evidence to the effect that there were no unauthorised absences by Mr Wavish: PJ [41]. Seventh, it could be inferred from the timing of the filing of the cross-claim (approximately 6 weeks after Mr Rodd filed his first affidavit) that Descon's intent was to "harass or vex" Mr Rodd: PJ [42]. That inference was supported by the fact that Descon failed to address Mr Rodd's evidence that whilst an employee he did have authority to authorise each period of leave taken by Mr Wavish. 22 Eighth, despite the fact that Descon was aware from the date that Mr Wavish commenced his proceeding on 13 January 2021, that Mr Wavish reported to Mr Rodd and Mr Rodd reported to Mr Lockhart, and the fact that it had access to Mr Lockhart and to Mr Quinn "to obtain further particulars", it elected not to file the cross-claim from the outset: PJ [43]. 23 Finally, each of these findings led the primary judge to his conclusion at PJ [44]-[45]: In my view, Descons [sic] submissions as to its reason for filing the cross claim when it did should be rejected. The proper conclusion to be drawn from the facts and the chronology is that Descon commenced the cross claim and joined Mr Rodd as a cross respondent on around 1 April 2021 in retaliation for Mr Rodd filing an affidavit in support of Mr Wavish. That conclusion is reinforced, in my view, by Descon's subsequent decision to amend the cross-claim to include claims, without any apparent foundation that Mr Rodd 'covertly concealed his actions' and the claim for general damages. There was never any basis for these claims for the reasons I have referred to earlier. It was commenced to bring pressure to bear on Mr Rodd and to intimidate him in circumstances where he was to give evidence on behalf of Mr Wavish. When all of the above matters are considered, I am satisfied that section 570(2)(a) is engaged in this case. The proceedings were commenced against Mr Rodd vexatiously, and they were commenced without reasonable cause. 24 The primary judge also concluded, on the same grounds, that Descon had caused Mr Rodd to incur costs and the filing and pursuit of the cross-claim constituted unreasonable acts or omissions within the meaning of s 570(2)(b) of the FW Act: PJ [48]. Further, the primary judge was satisfied that an order for costs was justified pursuant to that provision by reference to the Calderbank correspondence of 14 June 2021, when read with the open correspondence that detailed why the cross-claim could not succeed (at PJ [50]-[55]), and in doing so rejected a submission by Descon that offers which it made to Mr Wavish and Mr Rodd on 25 August 2021 and to Mr Rodd on 20 July 2022 were each a reasonable attempt to compromise the claims. In the first, Descon offered to pay $40,000 "to both of them" to resolve the proceeding and in the second, Descon offered to pay Mr Rodd $30,000 in full satisfaction of his claims: PJ [57]-[59]. 25 Finally, each of those findings were founded on the conclusion that the cross-claim was instituted by Descon against Mr Rodd "in order to intimidate and harass him" and without a reasonable basis (PJ [65]), by reference to the well-known decision of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225. 26 Dealing next with the claim against Irish Bentley, the primary judge correctly understood that it was open to make a costs order against the solicitors pursuant to ss 190 and 191 of the FCFCOA Act, which states the overarching purpose of civil practice and procedure and the duty of a party is to conduct the preceding consistently with the overarching purpose and of a lawyer to assist the party to comply with that duty. His Honour also relied on the power to make a costs order against a lawyer because of "undue delay, negligence, improper conduct or other misconduct or default" expressed at r 22.06 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (FCFCOA Rules). 27 At PJ [75], his Honour noted the principles applicable to personal costs orders against a lawyer, as summarised by Wigney J in Mitry Lawyers v Barnden [2014] FCA 918 (Mitry) at [42], noting further that the exercise of the power "should be approached with great caution", by reference to Harvey v Dioceses of Sale Catholic Education Ltd (St Joseph's Primary School Wonthaggi) (No 3) [2021] FCA 1420 (O'Callaghan J): PJ [76]. 28 The primary judge rejected Mr Rodd's submission to the effect that the personal costs order was, in part, justified by a deliberate omission by Irish Bentley to not reference "essential documentary evidence" in the form of the delegation from Descon to various employees, including Mr Rodd, on the basis that the omission was due to inadvertence: PJ [77]-[81]. However, the primary judge then made a number of adverse findings against Irish Bentley. First, that various allegations of dishonesty, concealment and covert action amounting to serious misconduct and fraud were made against Mr Rodd in the amended cross-claim without having a reasonable basis for the allegations: PJ [83]-[84]. The primary judge concluded that this amounted to "a serious dereliction of duty" by Irish Bentley by reference to the decision of Goldberg J in White Industries (Qld) v Flower & Hart (a firm) (1998) 156 ALR 169 at 242: PJ [85]. The basis for that conclusion is set out by the primary judge at PJ [87]-[90]: [Irish Bentley] was required to take care to ensure the decisions it made in relation to allegations made against Mr Rodd were reasonably justified by the available material and not made principally in order to harass him (rule 21.2). [Irish Bentley] was required to comply with rule 21.4 of the ASC Rules insofar as allegations of fraud or serious misconduct were made against Mr Rodd. It was required to assist Descon to comply complied [sic] with the overarching purpose in the FCFCOA Act to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. [Irish Bentley] did not file any material in relation to how it sought to comply with the obligations above. It has not done so in circumstances where I have found as follows. That Cross Claim was initiated and pursued principally to harass and intimidate Mr Rodd. There was no basis for the claim against Mr Rodd to be pursued given the strength (or lack thereof) of the evidence of Mr Quinn and the rebuttal evidence and other facts that subsequently emerged. There was no basis for the claim of fraud or serious misconduct to be levelled against Mr Rodd that he had acted dishonestly, or concealed absenteeism, or covertly concealed his actions. There was no basis for the claim for general damages. The absence of any evidence from [Irish Bentley] about these matters means it is not possible to make findings as to its precise role in what occurred in this case. What is clear is that Descon engaged lawyers to assist it. In doing so, it was entitled to rely on their professional expertise and judgement. What occurred in this case, it seems to me, could have occurred in any one of the following ways. [Irish Bentley] drew the pleading to include the claim and advised their client about it, including to file it and pursue it. Alternatively, Descon sought advice and instructed [Irish Bentley] to pursue the claims and [Irish Bentley] simply carried out Descon's instructions, without properly checking to see whether there was a legal and factual basis for the inclusion of that claim. Another alternative is that the decision to pursue the claims was made jointly by Descon and [Irish Bentley]. Whether it is one of these scenarios or some other, there can be no doubt as to the following. First, [Irish Bentley] was involved in the pursuit of this claim in this court. Second, by its involvement and in the absence of any evidence from it given the other findings I have made, [Irish Bentley] acted contrary to the obligations imposed on it under the ASC Rules, the FCFCOA Act and failed to exercise the skill and judgment of which Mortimer J spoke in Ryan. If the pursuit of the claim was its idea, [Irish Bentley] acted inconsistently with obligations imposed on it that I have identified under the ASC Rules and acted inconsistently with sections 190 and 191 of the FCFCOA Act. If Descon sought the pursuit of the claim, then [Irish Bentley] failed to comply with rule 21.4 of the ASC Rules and did not comply with its obligations under section 190 and 191 of the FCFCOA Act. This is therefore an appropriately exceptional case in which solicitors should be required to pay a portion of the costs. 29 His Honour then determined that the proportional split should be equal, despite there being "no evidence as to the role" that Descon and Irish Bentley each played in pursuit of the cross-claim: PJ [91].

The Descon application 34 It is not suggested by Mr Rodd that leave to appeal should be refused because of delay, prejudice or the general position that a tight rein should be kept on appeals from interlocutory orders. Rather, Mr Rodd's submissions focus on the absence of merit in the proposed appeal grounds. 35 In grouping grounds 6, 8, 9, 10, 11 and 14, Descon contends that the findings made by the primary judge were either contrary to the evidence, or the proper inference to be drawn from the evidence, that evidence relied upon by Descon was erroneously rejected or that the primary judge failed to give any or any adequate weight to aspects of the evidence. It will at once be apparent that Descon faces considerable difficulty in making out errors of that character in an appeal from the exercise of a discretionary decision: House v The King (1936) 55 CLR 499 at 504-505, which in this case is compounded by the fact that the cross-claim did not proceed to a merits hearing and contested questions of fact were not tested by cross-examination before the primary judge. 36 Despite the grouping of the grounds, each requires separate consideration. Ground 6 contends that the primary judge erred at PJ [36(a)], which is introduced with "I observe the following", which applies to each of subparagraphs (a)-(e). This raises difficulty as to whether these are findings of fact made by the primary judge. In any event, that point was not taken on behalf of Descon. Subparagraph (a) provides: Mr Quinn refers to an 'investigation' in respect of 49 days of alleged absences. He does not provide any evidence about the conduct of the investigation, the persons he spoke to, or the entirety of any documents he may have reviewed. 37 In developing the argument in support of this ground, Mr Freeman for Descon in his written submissions contended that the matters deposed to by Mr Quinn were "in fact his evidence" and in any event, Mr Quinn did give evidence that he sought the "input" of an administration officer. That does not identify why it is said that the primary judge made a factual error. Mr Freeman did not dispute the proposition that Mr Quinn's affidavit did not descend into any particularisation as to the scope of his investigation, or the steps that he took in order to satisfy himself that there were 49 unauthorised absences by Mr Wavish. In oral argument, Mr Freeman developed this ground somewhat differently by submitting that the primary judge misunderstood that whilst Mr Rodd was an employee (to 30 April 2020) he did have express authority to grant leave applications in favour of Mr Wavish which authority ceased to operate after that date, that is to say when Mr Rodd was engaged as an independent contractor. Descon's case was that whilst Mr Rodd was an employee, he exceeded his authority to approve of leave applications on 39 separate occasions. That may be so, but it does not demonstrate error in the finding that Descon impugns. The oral argument steps beyond this ground, and no application was made to amend. I also accept the submission of Ms Ahern for Mr Rodd that this finding is consistent with paragraph [13] of Mr Quinn's affidavit. There is no merit in this ground. 38 Ground 8 asserts error at PJ [37], where the primary judge described the internal reporting system of Descon whereby Mr Wavish reported to Mr Rodd and in turn Mr Rodd reported to Mr Lockhart. The formulated error is that the primary judge erred in concluding that the only person who could dispute Mr Rodd's version of the events was Mr Lockhart. The primary judge continued: …Mr Rodd's evidence was that his authority to manage employees and the expectations on him to do so came from Mr Lockhart. This made Mr Lockhart an important person in the proceeding. He was the only person that could dispute Mr Rodd's version of events that he (Mr Rodd) had been authorised by Mr Lockhart. Despite his apparent importance, however, Mr Lockhart never filed any affidavit in the proceeding. There is no evidence from Descon that it ever sought instructions from Mr Lockhart despite his importance. 39 Descon's attack on this reasoning points to evidence before the primary judge to the effect that two interstate directors, Mr Sneeden and Mr Isaac, could not have given direct evidence about absences by Mr Wavish and whilst it is true that Mr Rodd was subordinate to Mr Lockhart, it was Mr Quinn who attended a worksite on 13 May 2020 and noted that Mr Wavish was absent. Descon also relied upon site diaries, which recorded which employees were present on relevant dates. In oral submissions, Mr Freeman submitted that there was no evidence before the primary judge as to whether Descon did or did not seek instructions from Mr Lockhart in order to dispute the evidence of Mr Rodd. It should be observed that Mr Lockhart was the general manager of Descon and reported directly to its board, including Mr Quinn as one of the directors. 40 This ground wrongly attributes error to the primary judge. His Honour did not find at PJ [37] that Mr Lockhart was the only person capable of giving evidence to dispute Mr Rodd's "version of events". Rather, as correctly submitted by Ms Ahern, the primary judge's finding is limited to the question of the authority of Mr Rodd, rather than the entirety of the events in dispute. It is also the case that the site diaries recorded absences and said nothing about the authority of Mr Rodd to approve absences. This ground amounts to no more than a complaint that a different finding of fact was open, which cannot amount to discretionary error. 41 Ground 9 contends error at PJ [39] being an erroneous rejection of the evidence of Descon to the effect that the cross-claim was commenced because of the affidavit evidence of Mr Rodd that he authorised Mr Wavish to take leave on each of the contested days. The finding at PJ [39] is: It is convenient to deal with Descon's point above in relation to Mr Rodd's lack of authority. The concession made or clarification given by Mr Rodd was only that he lacked authority from 1 May 2020. His position was not that he lacked authority prior to that time. The clarification given by Mr Rodd therefore affected only ten of the days on which Mr Wavish was allegedly absent without authorisation. The clarification does not advance Descon's position in relation to the other 39 dates on which Mr Wavish was allegedly absent without authority. Moreover, while Descon says it was motivated to make its claim because Mr Rodd stated he authorised all leave for Mr Wavish it should be noted that such a claim could not be meaningfully advanced and had no basis without Descon getting instructions and ultimately evidence from Mr Lockhart, something it never did. 42 In developing this point, attention is drawn to Mr Rodd's affidavit of 15 February 2021, where he stated at [8] that: Because [Mr Wavish] worked in a role as a Site Manager for Descon, he would often voluntarily work excess hours above his contract of employment, I considered it fair, and reasonable that [Mr Wavish] be allowed time off work in each working week. The time off work would vary from week to week but was never excessive. [Mr Wavish] always worked his minimum 38 hours under his contract of employment, I had always approved any day off and he would always notify me in advance to make sure that he was not required on a particular day for work. 43 Mr Freeman characterised this as "solid evidence", that Mr Rodd had failed to approve leave in accordance with Descon's leave policy and conformably with the terms of Mr Wavish's employment. Thus, so the submission ran, this provided a reasonable basis to support the cross-claim against Mr Rodd. 44 I reject that submission. Whilst Descon had direct evidence from Mr Rodd that he approved leave taken by Mr Wavish, which may have been "solid evidence" of a breach of relevant policies or Mr Rodd's contract of employment, that evidence did not objectively support various pleadings in the cross-claim to the effect that Mr Rodd acted covertly, dishonestly and engaged in fraudulent misconduct. Further, this submission does not address the first part of paragraph [8], that it was fair and reasonable to approve time off to compensate Mr Wavish for additional hours worked, or any of the evidence at paragraphs [9]-[18] of the affidavit were Mr Rodd gives evidence about historic flexible work practices approved of by Descon, the autonomous nature of his employment responsibilities and the fact that he had never been requested by Descon on any previous occasion to seek higher level approval in order to grant leave to employees. 45 More fundamentally, Descon did not give evidence as to what motivated the claims of dishonesty in the cross-claim. It was open to the primary judge to reject Descon's submission to that effect. Once again, the complaint amounts to no more than that the primary judge should have drawn a different inference in conclusion on this question. That does not bespeak of discretionary error. 46 Ground 10 asserts that the primary judge erred at PJ [39], [40], [42] and [46] in "failing to give any or adequate weight that on the learned primary judge's own reasoning, at least 10 of the alleged 49 days of leave could not have been lawfully authorised" by Mr Rodd. The 10/49 day distinction corresponds with the pre and post-employment periods of Mr Rodd, was understood by the primary judge and recorded at PJ [39]-[40]. Just what the error is claimed to be is difficult to understand in that context. 47 A fair reading of the entirety of the reasons of the primary judge reveals that his Honour correctly understood Descon's case that Mr Rodd did not have any authority to approve of any leave for Mr Wavish after 1 May 2020 and as found at PJ [39] that that fact "does not advance Descon's position in relation to the other 39 dates on which Mr Wavish was allegedly absent without authority." Thus, it is clear that the primary judge expressly gave weight to the 10 day component of the cross-claim, contrary to the expression of error in this ground. There is no discretionary error as asserted. What weight was given to this distinction was a matter for the primary judge. Generally, no discretionary error is established by "disagreement only on matters of weight": Gronow v Gronow (1979) 144 CLR 513 at 519 (Stephen J). 48 Ground 11 asserts error by the primary judge in the finding that Descon did not obtain instructions from Mr Lockhart on the ground that it was not open to make that finding on the evidence. It is difficult to distinguish this ground from the complaints made under grounds 6, 8 and 9. Ground 11 was not separately addressed by counsel for Descon. Whilst there was no direct evidence about any advice that Descon sought from Mr Lockhart in relation to the disputed 39 days that Mr Wavish did not report for work during which Mr Rodd was employed by Descon, it is clear from a reading of the entirety of the reasoning at PJ [39], [42], [46] and [68] that the primary judge's finding is an inference drawn from the fact that Mr Lockhart is a person who was able to give evidence as to the authority of Mr Rodd, in support of the cross-claim, but did not do so either in support of the cross-claim or in opposition to the costs application. 49 Moreover, this is a finding of a secondary fact, and counsel for Descon did not develop a submission as to how it caused the primary judge to err in making a primary finding of fact: as to the importance of doing so, see Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2015] FCAFC 157; 234 FCR 549 at [4] (Branson J). It will be recalled that the primary judge found that Descon had no reasonable basis to plead that Mr Rodd engaged in covert misconduct amounting to fraud, which was the primary basis for the exercise of the costs discretion. 50 There is no merit in this ground. 51 The second group of appeal grounds, 1, 4, 5 and 12, are concerned with complaints that Descon was denied procedural fairness, although the expression of ground 1 is not easily understood as a complaint of that character. Ground 1 contends error by the primary judge in "failing to give any or any adequate weight" to the fact that the costs application was determined without any merits hearing and "where there had been a supervening event" being a settlement reached with Mr Wavish that "rendered the proceeding futile or moot". No distinct submission was put by Mr Freeman in support of this ground: rather, it appears as a "catchall" submission that if one or more of the other grounds succeed, it should be concluded that this ground likewise succeeds. I reject that submission. It ignores the fact that the costs application was determined without proceeding to a hearing on the merits (and no objection to that procedure was raised before the primary judge) and the fact that the primary claim of Mr Wavish as resolved did not, and logically could not, affect the costs claim made by Mr Rodd upon the filing of a notice of discontinuance against him. 52 Ground 4 contends error by the primary judge in failing to afford procedural fairness to Descon by denying to it "an opportunity, or a sufficient opportunity, to be heard before making serious findings" against Descon and Irish Bentley. This ground is closely related to ground 5, where the identified error is that the primary judge "conducted a hearing on the merits, without cross-examination and on the assumption that [Descon was] precluded from relying on additional evidence." When the hearing of the application commenced before me, I raised with counsel whether these grounds raised a fundamental issue which ought to be determined first. I expressed concern that I was being asked to make findings on this issue without the benefit of a transcript of the proceeding before the primary judge, the form of the costs application as made by Mr Rodd or the written submissions that were provided to the primary judge. I adjourned the hearing briefly so that this material could be provided. It was. 53 This material plainly disclosed the following. The primary judge made an order, in the presence of counsel for the parties, on 21 July 2022 that Mr Wavish's proceeding be dismissed, the hearing listed for 25 July 2022 be vacated and that the proceeding be listed for "hearing on the question of costs" as between Mr Rodd and Descon on 27 July 2022. It was further ordered that by 26 July 2022, each party was required to file a written outline of submissions in support of or in opposition to the costs application, as appropriate. On 25 July 2022, the solicitor for Mr Rodd emailed Irish Bentley stating the precise terms on which Mr Rodd sought an indemnity costs order against Descon and Irish Bentley. The transcript of the proceeding before the primary judge records that counsel for each party was content to proceed by identification of a number of affidavits, which I have noted were not formally read, and no objection was raised by counsel for Descon to this procedure. There was no contention that the matter should be adjourned to allow Descon further time to provide any additional evidence. 54 It was plainly the case that Descon was aware that Mr Rodd intended to submit that serious findings should be made against it concerning the pleading of the cross-claim without a reasonable basis: see Mr Rodd's written submissions on costs dated 26 July 2022, particularly at [10]-[22], when read with the analysis at [32]-[36]. These submissions were comprehensively responded to by counsel for Descon in its undated written submissions, filed on 26 July 2022. The transcript of the oral argument before the primary judge is redolent with submissions that were put by each counsel for and against the costs application. No suggestion was made by counsel for Descon that it did not have a sufficient opportunity to be "heard" or that it required additional time to put on answering affidavit evidence. 55 There is no merit in grounds 4 and 5. 56 Ground 12 is not easily understood as a complaint about denial of procedural fairness. It provides: The learned primary Judge erred, at paragraphs 42, 44 and 45 of the judgment, in finding that: a. the cross claim was filed: i. to vex or harass the respondent; ii. in retaliation against the respondent; iii. to bring pressure to bear on the respondent; and/or iv. vexatiously and without reasonable cause; and b. that the cross claim was without any apparent or actual or foundation; where such findings were not supported by the evidence or the proper inferences to be drawn from same. 57 In its written case, Descon did not elaborate why it is said that these findings were not supported by the evidence or inferences therefrom. In oral submissions, counsel emphasised that the primary judge erred in accepting Mr Rodd's submission, and finding accordingly, that the timing and circumstances of the cross-claim evidenced that it was brought "with the intention to harass or vex him": PJ [42]. There are more particular findings at PJ [45], that "[t]he proceedings were commenced against Mr Rodd vexatiously, and they were commenced without reasonable cause"; at PJ [46], that "…this was a case in which Descon pursued a claim without reasonable cause for the purpose of vexing and harassing Mr Rodd…" and at PJ [68], that the cross-claim was continued "in wilful disregard of known facts", "was groundless, not based on fact, should never have been made and was instituted and pursued for the ulterior purpose of harassing Mr Rodd. It was advanced in disregard of known facts and established law." 58 Counsel further developed this submission by emphasising that the serious finding required "actual persuasion" according to the Briginshaw standard, which his Honour failed to apply. 59 I reject these submissions. The primary judge comprehensively essayed the affidavit evidence, without counsel requiring that any of it be tested by cross-examination and despite the procedure for determining costs applications where there has not been a hearing on the merits (see Qin, above) at PJ [14]-[29] and [35]-[45] where numerous findings of fact are made and which are not the subject of challenge by the appeal grounds. The critical findings at PJ [42]-[44] bear repeating: It next falls to consider the circumstances in which the cross claim was filed. The cross-claim was initially filed on 1 April 2021, approximately 6 weeks after Mr Rodd filed his affidavit of 15 February 2021 in support of Mr Wavish. Mr Rodd says the timing of the filing of the cross claim shows that the claim was brought against him with the intention to harass or vex him. Descon says, inter alia, it filed the cross-claim at this time because it was only after receipt of Mr Rodd's first affidavit that it had an admission from Mr Rodd as to what he had authorised Mr Wavish to do. This submission by Descon needs to be considered in light of the following. First, Descon knew Mr Rodd was authorised to manage leave. It had authorised him to do so. Second, the admission, clarification or concession by Mr Rodd (however it might be described) that he did not have authority to authorise leave as noted above only affected the ten days after 1 May 2020. It is not an answer to the remaining 39 days that Descon alleged there were unauthorised absences. Third, it was within Descon's power at any time to clarify the situation concerning Mr Rodd's authority by speaking to Mr Lockhart, something it apparently never did. Another way to consider Descon's submission is to consider what Descon knew at the time Mr Wavish commenced the proceeding, and at the time the respondents filed their initial Response on 13 January 2021. At that time, Descon knew Mr Wavish reported to Mr Rodd and that Mr Rodd reported to Mr Lockhart. It was aware that it had given Mr Rodd authority to manage the leave of employees under the Delegation. It was aware that Mr Wavish claimed his absence on 30 May 2020 was authorised by Mr Rodd. It was also aware that Mr Wavish was, in its view, absent from work on approximately 49 other days (see paragraph 13 of Mr Quinn's affidavit). It also had access to Mr Lockhart and Mr Quinn to obtain further particulars. Despite all of this, Descon elected not to file a cross-claim against either Mr Wavish or Mr Rodd at the time it filed its original Response on 13 January 2021. In my view, Descons submissions as to its reason for filing the cross claim when it did should be rejected. The proper conclusion to be drawn from the facts and the chronology is that Descon commenced the cross claim and joined Mr Rodd as a cross respondent on around 1 April 2021 in retaliation for Mr Rodd filing an affidavit in support of Mr Wavish. That conclusion is reinforced, in my view, by Descon's subsequent decision to amend the cross-claim to include claims, without any apparent foundation that Mr Rodd 'covertly concealed his actions' and the claim for general damages. There was never any basis for these claims for the reasons I have referred to earlier. It was commenced to bring pressure to bear on Mr Rodd and to intimidate him in circumstances where he was to give evidence on behalf of Mr Wavish. 60 These findings follow from PJ [36] where the primary judge made five discrete findings in relation to the evidence of Mr Quinn, the only witness relevant to the allegations made in the cross-claim. The primary judge made findings of fact, which were open, that Mr Quinn: failed to provide particular evidence as to the investigation apparently conducted by him and which supported the pleading of the cross-claim of dishonesty, covert conduct amounting to fraud; failed to annex copies of site diaries for each of the days of absence in contention; failed to annex copies of time and wages records for the 49 days of absence; failed to address the evidence upon which it might be inferred that Mr Rodd acted dishonestly or how he "covertly concealed his actions" and failed to file any subsequent affidavit in answer to the comprehensive rebuttal of the allegations as set out in the third affidavit of Mr Rodd dated 18 March 2022. 61 In short, Descon has failed to identify why the findings of the primary judge at PJ [42]-[44] were not open on the material that was before him. No error has been made out in support of the contention that these findings were incapable of founding the inferential findings of vexation, harassment, retaliation, improper pressure or absence of reasonable cause that this ground relies on. 62 The third group of grounds, 13, 15 and 16, focus upon the open letter and the Calderbank correspondence of 14 June 2021. Ground 13 asserts error at PJ [41] where the primary judge found: There is then the Amended Cross Claim on 2 July 2021. This is a document of significance. Descon added to its earlier allegations by pleading that Mr Rodd 'covertly concealed' his actions. Nothing in Mr Quinn's affidavit deals with this issue in any meaningful way, and there is no evidence from Descon as to the instructions given. Moreover, in the Amended Cross Claim, Descon also claimed for the first time general damages of $25,000 from Mr Wavish and Mr Rodd. This amount was not particularised in the Amended Cross Claim. Nor was it referable to any particular breach of contract or act of misconduct. Nothing in Mr Quinn's affidavit touched on this issue either. No evidence was ever filed to support such a claim. The amount was claimed in circumstances where Descon was on notice (from the letter of 14 June 2021) that Mr Rodd had comprehensively answered the allegations concerning alleged unauthorised absences of Mr Wavish. Ultimately the claim for general damages was belatedly abandoned when the respondents filed their outline of argument for trial on 4 July 2022, some three weeks before the trial was to commence. The amount of the general damages claimed ($25,000) was significant when one considers that the other damages claimed totalled $39,140. 63 The error is identified as the finding that the correspondence of 14 June 2021 "comprehensively answered the allegations" about unauthorised absences by Mr Wavish "where such finding was wrong in law and not supported by the evidence or the proper inferences to be drawn from same." Descon's written submissions differ from that claim, focussing on the contention that it was not unreasonable for Descon to reject the terms of the Calderbank offer, read in conjunction with the open letter, as each proceeded upon an incorrect understanding of the factual basis for Mr Wavish's absences. That submission is founded on the premise that Descon's case would have succeeded at trial, a matter expressly acknowledged in the written submissions of Descon where it is said that each contested matter of fact "would have been put to Mr Rodd and Mr Wavish under cross-examination, but that never happened because the proceedings were ultimately compromised or discontinued before trial". That submission was not expanded upon orally. Stated in that way, it is clear that there is no merit in this ground because the procedure that was adopted before the primary judge was not objected to by counsel who then appeared for Descon. The primary judge was invited to make findings of fact based on the evidentiary material referred to by each party, albeit not formally tendered or read. 64 Ground 15 focuses on PJ [52]-[53] where the primary judge reasoned as follows: I have made findings above that the proceeding was instituted vexatiously and without reasonable cause. If, however, there was ever any doubt that the proceedings were without merit, that should have been abundantly clear to Descon by 14 June 2021. On that day, Descon via its solicitors received an open letter that addressed in detail the alleged unauthorised absences of Mr Wavish and Mr Rodd's role in those absences. A significant amount of detail was provided in the letter, including the provision of explanations as to why on certain dates, Mr Wavish could not have been absent in an unauthorised manner. From that point, Descon and its solicitors were squarely and clearly on notice that further enquiries needed to be made about the evidence provided by Mr Quinn in his affidavit, particularly given the nature of that evidence. Descon's submissions that it had no choice but to continue the proceeding warrants close scrutiny. It is pertinent to note that at around the time Descon received the letter of 14 June 2021, it was also in the process of giving consideration, or would shortly give consideration, to amending the cross-claim. As noted earlier, the Amended Cross Claim included the claim for $25,000 in general damages and the further allegation that Mr Rodd covertly concealed his actions. From at least 14 June 2021 Descon knew or ought to have known that its claim in the form of the original cross-claim could not be sustained given the open letter from Mr Rodd's solicitors. I do not accept in the circumstances that it had no choice other than to proceed against Mr Rodd. It had a choice. That choice was to reasonably reconsider the claim it was pursuing in light of the letter of 14 June 2021 and accept the offer of compromise of that date, or negotiate some other settlement. It did not take that course. Instead, Descon chose to continue with the claim, not seek to improve its evidence, and on top of that, chose to pursue a further unsupported claim of $25,000 general damages against Mr Rodd. Faced with a choice to reconsider its position, Descon to use an expression used by card players, 'doubled down'. 65 The assertion is that the primary judge erroneously found that Descon "should have been aware" that the cross-claim was without merit "where such [a] finding was contrary to the evidence or not supported by the evidence or the proper inferences to be drawn from same." Descon's written submissions in support of this ground commence with the proposition that the primary judge's finding that the cross-claim was without reasonable cause was erroneous. To this there is added two contentions that Descon was "correct" to reject the offer of 14 June 2021 "because it contained errors and, though it raised issues about the absences of Wavish, it did not explain them by reference to the evidence and, at that, not all of them" [sic] and there was evidence that Mr Rodd failed to complete and submit required leave documentation for each absence. 66 These submissions were not expanded upon orally. They amount to no more than disagreement with the findings of the primary judge. Descon has failed to demonstrate why the findings were not open and for that straightforward reason, there is no merit in this ground. 67 Ground 16 asserts error at PJ [60] where the primary judge found: Given what I have set out above, section 570(2)(b) is engaged in this matter. By 14 June 2021, Descon was in receipt of a detailed response from Mr Rodd in relation to Mr Wavish's alleged unauthorised absences, and an offer made pursuant to Calderbank principles. That response and offer did not cause a reappraisal of the situation as it should have done. Descon's refusal to accept the offer of 14 June 2021 and its persistence with the litigation after that date was an unreasonable act or omission. 68 Once again, error is asserted, without supporting explanation. The complaint is that the primary judge erred in finding that the non-acceptance of the offer was objectively unreasonable in the particular circumstances. There is no reference to this ground in the written submissions of Descon, and it was not touched upon orally. Despite that, the ground was not abandoned. Descon should understand that if an appeal ground is pressed before this Court, there is at least an obligation to explain where and why the primary judge erred. It is not the function of this Court to conduct some form of roving inquiry in order to determine whether there is a basis for a contended appeal ground. This ground is of no merit. 69 The final group concerns grounds 2 and 3. These have the appearance of "safety net" contentions, which turn on asserted errors that the primary judge erred in concluding that the discretion to order costs at s 570(2) of the FW Act was engaged (ground 2) and that the consequential exercise of that discretion miscarried because the primary judge gave "undue weight to irrelevant matters" and failed "to give proper weight to relevant matters" in ordering that costs be awarded on an indemnity basis (ground 3). 70 Descon's written submissions in support of ground 2 generically contends that "in the premises" of each of the arguments advanced in support of other (unidentified) grounds, the primary judge erred in his conclusion that the cross-claim was commenced and proceeded vexatiously or without reasonable cause or amounted to an unreasonable act or omission on the part of Descon. This ground was not separately addressed in oral submissions, save that counsel accepted that the primary judge correctly understood the principles applicable to the exercise of the discretion at PJ [5]-[10]. This ground is of no merit because no ground that it is parasitically related to is of merit, Descon has failed to identify where the primary judge erred and has failed to demonstrate why each of the bases for the costs order, commencement and maintenance of the cross-claim without reasonable cause and unreasonable failure to accept the Calderbank settlement offer, were not conclusions open to the primary judge. 71 Finally, as to ground 3, Descon's written submissions depart significantly from the point that was sought to be made in this ground. It is said that "undue weight" was given to the role of Mr Lockhart, the offer of compromise as set out in the Calderbank correspondence and the timing of the cross-claim, which followed the first affidavit of Mr Rodd. Next it is said that "insufficient weight" was given to matters that concern the complaint that Descon was denied procedural fairness at the costs hearing. As I have explained, contentions about insufficient weight do not ordinarily establish error in the exercise of a costs discretion, Descon has failed to identify why the weight submission falls into an exceptional category which evidences error and I have concluded in relation to other grounds that there is no merit in the various complaints about a failure to afford procedural fairness. For these reasons, ground 3 is of no merit. 72 As explained at the outset, I heard the leave applications together with full argument on the proposed appeal grounds by adopting the "prudential approach": Tu'uta Katoa v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] HCA 28; 96 ALJR 819 at [64] (Gordon, Edelman and Steward JJ). It follows that having concluded that there is no merit in any of the proposed appeal grounds, no purpose would be served in granting the application for leave to appeal. The order will be that the amended application filed 21 July 2023 is dismissed.

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