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[2022] FWC 2192
General information, not legal advice.
Fair Work Commission
2022-08-18
Original judgment source is linked above.
The applicant was self-represented in the present case. However, that is not a circumstance which relieves an unsuccessful, self-represented litigant from an obligation to pay costs if they are otherwise justified. In , Kenny J adopted the following statement by Hodgson CJ in Eq. in at (which I also adopt as a statement of the relevant principle):
... I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they otherwise would be, by not focusing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event."
Printed by authority of the Commonwealth Government Printer
Dimitrios Perdikaris
KLF Holdings Pty Ltd [2022] FWC 2192
(a) in the ordinary course of litigation costs follow the event. The purpose of a costs order is not to punish the unsuccessful party but to compensate the successful party against the expense to which he or she has been put by reason of the legal proceedings (per Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543, [1990] HCA 59 at [13];
(b) in the ordinary course of litigation under the FW Act, costs do not follow the event and each party bears their own costs. The purpose or policy of the cost provisions in the FW Act are to free parties from the risk of having to pay their opponents' costs in matters arising under the Act, while at the same time protecting parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause (per Australian Workers Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428, [2013] FCAFC 23 at [7] citing Khiani v Australian Bureau of Statistics [2011] FCAFC 109);
(c) to the extent that the cost provisions of the FW Act provide a protection against costs orders, that protection can be lost by certain conduct (per Kangan Batman Institute of Technology and Further Education v AIRC (2006) 160 IR 405 at 419, [2006] FCAFC 199 at [60]);
(d) the costs provisions provide a deterrent against unreasonable conduct during proceedings, discourage frivolous and speculative claims and assist in the efficient resolution of claims by encouraging all parties to approach proceedings in a reasonable manner (per the Explanatory Memorandum to the , p 7); and
(a) there are two pre-conditions for the making of a costs order:
- that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and
- that the act or omission caused the other party to the matter to incur costs (per Gugiatti at [43]);
(b) whether an act is "unreasonable" is informed by its context and requires an evaluative assessment of all the circumstances (per Celand v Skycity Adelaide Pty Ltd (2017) 274 IR 420, [2017] FCAFC 222 at 171);
(c) the continuation of a matter after arbitration has commenced might be an unreasonable act if, on the facts apparent to the applicant at the relevant time, there was no substantial prospect of success (per Tracey at [24]);
(d) a failure to inform another party of an inability to attend proceedings would be, if intentional, unreasonable and if accidental, an unreasonable omission (per Roy Morgan Research v Baker [2014] FWCFB 1175 at [10] (Roy Morgan) citing Goffet v Recruitment National Pty Ltd [2009] AIRCFB 626 at [35], see also Emma Sidney v Employsure Pty Ltd [2016] FWC 2659 at [28]); and
(e) a failure to advise the other party of the first party's intentions, such as the intention to maintain a jurisdictional objection, if deliberate or reckless would be unreasonable and if an omission could be equally unreasonable (per Roy Morgan at [10]).
"7 The discretion to award costs on a basis other than as between party and party, including on an indemnity basis, is "unfettered, save that it must be exercised judicially and not arbitrarily or capriciously": Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 at [96]. The discretion must also be exercised in light of the requirement that the Court consider any failure by a party to comply with the overarching purpose of the civil practice and procedure provisions to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: see ss 37N(4), 37M(1) of the FCA Act; LFDB v SM (No 2) [2017] FCAFC 207 at [7].
8 The discretion to depart from an order for party and party costs will not be exercised unless there is some special or unusual feature or the justice of the case so requires: Cirillo v Consolidated Press Property Ltd (formerly known as Citicorp Australia Ltd) (No 2) [2007] FCA 179 at [3]; Seven Network Ltd v News Ltd (2009) 182 FCR 160; [2009] FCAFC 166 at [1102]; Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [5].
9 The purpose of a costs order is to compensate the successful party, not to punish the unsuccessful one: King v Yurisich (No 2) [2007] FCAFC 51 at [19], citing Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; Seven Network at [1099]. An award of indemnity costs is to "serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs": Hamod v New South Wales (2002) 188 ALR 659; [2002] FCAFC 97 at [20]; see also Kazal v Independent Commission Against Corruption and Ors (No 2) [2020] NSWSC 17 at [60]- [62]; Cirillo at [4]-[5]; Melbourne City Investments at [5].
10 The circumstances in which it may be found to be unreasonable for the successful party to be subjected to the expenditure of any costs are not fixed or closed, but have been found to include, relevantly: where "the applicant, properly advised, should have known that he had no chance of success" (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 at 401; De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [7]); where the moving party "persists in what should on proper consideration be seen to be a hopeless case" (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) [1993] FCA 70; (1993) 46 IR 301 at 303); where the applicant's case was "always clearly foredoomed to fail" and "they ought to have known this to be so" (Smolle v Australian and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967 at [25]); where an application is "wholly untenable and misconceived" (Henke v Carter [ 2002] FCA 492 at [22]); and where an applicant persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case (Y_ates Property Corporation Pty Ltd v Boland (No 2)_ [1997] FCA 760; (1997) 147 ALR 685 at 693): see generally Melbourne City Investments at [5]; Seven Network at [1102]; ; at 233.
12. In assessing whether a case can be said to "have no chance of success", or to be "hopeless" or "foredoomed to fail", and that the losing party should have known that to be the case, it is also necessary to be wary of reasoning with the benefit of hindsight. As Goldberg J said in Re Kingsheath Club of the Clubs Ltd (in liq) [2003] FCA 1589 at [5], it is "easy with hindsight to make an observation that an action has no chance of success, after the matter has been fully argued and has enjoyed considered attention of experienced solicitors and senior and junior counsel"
(1990) 170 CLR 534
(2013) 232 FCR 428
(2006) 160 IR 405
(2017) 274 IR 420
(2009) 187 IR 262
(2009) 182 FCR 160
(2002) 188 ALR 659
(1988) 81 ALR 397
(1993) 46 IR 301
(1997) 147 ALR 685
(1993) 46 FCR 225
(e) there is a need to scrutinise the manner in which proceedings under the FW Act are conducted to ensure that costs are not unreasonably incurred and that the public interest in the orderly and cost-effective administration of justice is not too readily placed to one side (per Tomvald v Toll Transport Pty Ltd [2017] FCA 1208 at [315]).