Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union

THE COURT: 1 The Director alleged that the picketing by the respondents of a construction site on 17, 18 and 19 February 2011 was unlawful in two respects: because it was "unlawful industrial action" in contravention of s 38 of the Act formerly known as the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act); and because it was a form of coercive conduct proscribed by s 43 of the BCII Act. The primary Judge found neither allegation to be established and, accordingly, dismissed the Director's application for the imposition of penalties on the respondents in respect of each alleged contravention. 2 On 4 December 2015, this Court (by majority) allowed the Director's appeal against the dismissal of the alleged contraventions of s 38, and (unanimously) dismissed the appeal with respect to the alleged contraventions of s 43: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 170. The Court ordered that the proceedings be remitted to the primary Judge for consideration of the orders to be made in respect of the contravention of s 38 and of the costs of the trial. 3 The Director submits that, having had substantial success on the appeal and, in particular, having succeeded in setting aside the order of the primary Judge dismissing his application altogether, he should have his costs of the appeal. He invoked the principle that costs should follow the event: Oshlack v Richmond River Council [1998] HCA 11, (1998) 193 CLR 72 at [67]-[69] (McHugh J); Ruddock v Vadarlis [2001] FCA 1865, (2001) 115 FCR 229 at [9]-[16] (Black CJ and French J). The Director submitted that his lack of success on the appeal concerning s 43 should not alter that position. 4 The Director advanced three submissions in support of these contentions: first, that the dismissal of the alleged contravention of 43 is not likely to have a significant impact on the relief to which he will be entitled at first instance; secondly, that the conduct and circumstances relevant to the fixing of penalties for the alleged contraventions of s 43 (if established) would overlap substantially with those relevant to the fixing of penalties for the s 38 contraventions; and, thirdly, that it is inappropriate to determine the liability for costs by an analysis of the parties' success or failure on individual issues arising in an appeal. 5 The respondents submitted that the appropriate costs order is that each party should pay its own costs of the appeal or, alternatively, that the Court order the respondents to pay one-third of the appellant's costs of the appeal and the appellant to pay two-thirds of the respondents' costs of the appeal. 6 In our opinion, an order that each party pay its or their own costs of the appeal is appropriate. This was not an appeal in which there was a single "event" which the costs can follow. In the proceedings at first instance and on appeal, the Director alleged separate contraventions of the BCII Act. Each alleged contravention involved consideration of different matters and neither contravention depended in any way on the establishment of the other. It was open to the Director to have appealed only against the dismissal of the alleged s 38 contraventions. Instead, the Director brought an appeal against the dismissal of each of the contraventions he alleged. One of the four substantive grounds in the Notice of Appeal concerned s 38 of the BCII Act, and three concerned s 43. 7 The circumstance that there may have been substantial overlap at first instance between the matters bearing on the fixing on an appropriate penalty, if the Director had succeeded in establishing contraventions of both s 38 and s 43 is, to our mind, not persuasive. The Director chose to allege unlawful conduct of different kinds. The respondents were entitled to defend the allegations that they had behaved unlawfully, and they have been vindicated in relation to s 43. 8 It is true that the Director succeeded in having set aside the primary Judge's dismissal altogether of the Originating Application. However, reliance on this consideration would be to prefer form over substance. This Court set aside the primary Judge's order only so as a precursor to giving effect to the conclusion of the majority that the Director's case had succeeded on one claim and had failed on the other. 9 In Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53 at [6], French CJ, Kiefel, Nettle and Gordon JJ said that there are "good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taking to argue them and the like". 10 The circumstances of this appeal are different in kind from those considered in Firebird. In that case, the appeal involved a single substantive issue (should the registration of a judgment under the Foreign Judgments Act 1991 (Cth) have been set aside) in respect of which there were a number of sub-issues. It was in that context that the High Court deprecated the determination of costs on an issue-by-issue basis. In contrast, this appeal involved the question of whether the respondents had contravened the law in two separate and distinct ways and the Director failed altogether on one of his allegations. 11 The time in the appeal was divided approximately equally between s 38 and s 43. It is inappropriate to engage in any more detailed analysis. 12 In our opinion, an appropriate outcome is for the Director to have the costs of the appeal on the allegation on which he succeeded and for the respondents to have their costs of the appeal on the allegation on which the Director failed. Effect can be given to this in a practical way by an order that each party bear its or their own costs. 13 The respondents sought a certificate pursuant to s 6 of the Federal Proceedings (Costs) Act 1981 (Cth). Section 6 provides (relevantly): 6 Costs certificates for respondents - Federal appeals (1) Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal. … (3) The certificate that may be granted under subsection (1) or (2) by a court to a respondent to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney-General to authorize a payment under this Act to the respondent in respect of: (a) the costs incurred by the respondent in relation to the appeal; and (b) any costs incurred by an appellant in relation to the appeal that have been, or are required to be, paid by the respondent to the appellant in pursuance of an order of the court, not being costs to which a costs certificate granted under section 7 relates. 14 The matters bearing on the exercise of the discretion under s 6 are well established: Minister for Immigration and Citizenship v SZNVW (No 3) [2010] FCAFC 102 at [3]; Australian Super Pty Ltd v Woodward (No 2) [2009] FCAFC 180 at [2]; Anti-Doping Rule Violation Panel v XZTT (No 2) [2013] FCAFC 135 at [33]-[34]. 15 The respondents submitted that the Director's appeal with respect to s 38 had succeeded on a question of law, that there was no relevant fault on their part, and that the public interest had been served by the resolution of the proper construction of s 38 of the BCII Act. 16 We accept that submission. As noted in the principal judgment at [69], the considerations which led this Court to overturn the primary Judge's decision concerning the alleged contraventions were not given the same prominence at the trial as they had been on appeal. We will order the grant to the respondents of a costs certificate for their costs in relation to the appeal to this Court. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tracey, Bromberg and White.

SCHEDULE OF PARTIES VID 799 of 2014 Respondents Second Respondent: BILL OLIVER Third Respondent: ELIAS SPERNOVASILIS Fourth Respondent: SHAUN REARDON Fifth Respondent: DEREK CHRISTOPHER Sixth Respondent: BILLY BEATTIE Seventh Respondent: THEO THEODOROU