Drummond v Canberra Institute of Technology

REASONS FOR JUDGMENT WIGNEY J: 1 On 5 April 2023, I dismissed Dr Mark Drummond's application for leave to appeal a judgment and orders made by a judge of the Federal Circuit and Family Court of Australia: Drummond v Canberra Institute of Technology [2023] FCA 421. At the conclusion of my ex tempore reasons for judgment, I indicated that as the unsuccessful applicant, Dr Drummond should be ordered to pay the respondent's costs of the application. That was despite the fact that neither party had made any submissions concerning costs. Nor had my attention been drawn to the operation of s 570 of the Fair Work Act 2009 (Cth). 2 Shortly after announcing the orders, which included an order that Dr Drummond pay the respondent's costs of the application, I notified the parties that I was considering exercising my discretion to vary or set aside the costs order pursuant to r 39.05 of the Federal Court Rules 2011 (Cth). I note, in that context, that r 39.05(e) and (h) permit the Court to vary an order if it "does not reflect the intention of the Court" or was the product of an "accidental slip or omission". I invited the parties to provide submissions in relation to that issue, as well as submissions in respect of the operation of s 570 of the Fair Work Act in the circumstances of this case. Both the respondent, the Canberra Institute of Technology (CIT), and Dr Drummond provided submissions in response to that invitation. 3 In its submissions, CIT appeared to concede that, were I to form the view that s 570(1) of the Fair Work Act precluded a costs order being made in its favour, or was otherwise persuaded by the submissions that a costs order was not appropriate, it would be open to me to set aside the costs order made on 5 April 2023 pursuant to r 39.05 of the Rules. That concession was properly made: see Construction, Forestry, Mining and Energy Union v Mammoet Australia Pty Ltd (No 2) (2012) 209 FCR 123; [2012] FCA 1404 at [10]; Ashby v Slipper (No 2) (2014) 314 ALR 84; [2014] FCAFC 67. Dr Drummond, perhaps not surprisingly, agreed that it was open to me to apply r 39.05 of the Rules in the circumstances. He also submitted that r 39.04 of the Rules would apply because the costs order had not yet been entered. There may well be merit in that submission, though it is unnecessary to determine whether that is the case. Either way, it is open to me to reconsider the question of costs. 4 CIT submitted that I should not set aside the costs order for two reasons: first, because s 570(1) of the Fair Work Act does not apply to the circumstances of this case; and second, if s 570(1) does apply, a costs order could nevertheless be made pursuant to s 570(2)(a) or (b) because the Court would be satisfied either that Dr Drummond "instituted the proceedings vexatiously or without reasonable cause", or that Dr Drummond's "unreasonable act or omission" caused it to incur the costs of the application. 5 Dr Drummond submitted that there is no basis for CIT's contention that s 570(2)(a) and (b) apply in the circumstances. Indeed, he went so far as to submit that his conduct of the leave application had been exemplary and he had been a model litigant. 6 For the brief reasons that follow, I am satisfied that s 570(1) of the Fair Work Act applies to this proceeding and am not satisfied that s 570(2)(a) or (b) apply in the circumstances of this case. In short, while I would not go so far as to find that Dr Drummond's conduct has been exemplary, I am not satisfied that Dr Drummond instituted the proceeding (his application for leave to appeal) vexatiously or without reasonable cause, or that any unreasonable act or omission on his part caused CIT to incur costs. 7 Section 570 of the Fair Work Act provides as follows: 570 Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A. Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A. (2) The party may be ordered to pay the costs only if: (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or (c) the court is satisfied of both of the following: (i) the party unreasonably refused to participate in a matter before the FWC; (ii) the matter arose from the same facts as the proceedings. 8 The first question is whether Dr Drummond's application for leave to appeal was a proceeding (including an appeal) in a court "in relation to a matter arising under" the Fair Work Act. 9 CIT submitted that s 570(1) was not engaged in the circumstances of this case because the Court was exercising its appellate jurisdiction. That submission may have had some merit prior to 1 January 2013: see Construction, Forestry, Mining and Energy Union v CSBP Limited (No 2) (2012) 289 ALR 49; [2012] FCAFC 64. With effect from 1 January 2013, however, s 570(1) was amended to overcome the decision in CSBP and make it clear that s 570(1) may apply when the Court is exercising its appellant jurisdiction, so long as the matter under appeal involves a "matter" arising under the Fair Work Act: see BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (2014) 226 FCR 240; [2014] FCAFC 138 at [6]; Ashby at [8] - [9]. 10 This is plainly such a case. In the proceeding in the court below, Dr Drummond sought relief under the Fair Work Act. That proceeding therefore involved a "matter" arising under the Fair Work Act. The application for leave to appeal the judgment of the primary judge in that proceeding is accordingly a proceeding "in relation to a matter arising under" the Fair Work Act. 11 The second question is whether the Court is satisfied that Dr Drummond instituted the proceeding (being the application for leave to appeal) "vexatiously or without reasonable cause", or whether Dr Drummond engaged in any "unreasonable act or omission" which caused CIT to incur "the costs". If the Court is satisfied of either of those matters, the Court's discretion to award costs in favour of CIT would be enlivened. 12 The following principles are generally applicable in determining whether costs may be awarded pursuant to s 570(2) of the Fair Work Act. 13 First, a proceeding may be said to be "vexatious" if it is scandalous, oppressive, embarrassing, discloses no reasonable cause of action, or is otherwise an abuse of process: Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [10]. A proceeding that is commenced vexatiously would accordingly be one which was commenced for an improper purpose, such as to vex, harass or embarrass, or which was commenced in circumstances where the applicant knew, or at least ought to have known, that the proceeding had no real or reasonable prospects of success. 14 Second, a party cannot be said to have commenced a proceeding "without reasonable cause" for the purposes of s 570(2)(a) simply because the party's argument turned out to be unsuccessful: Johnson at [13]. Costs will only be awarded against the party if the unsuccessful argument was "not worthy of consideration" (R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470; [1978] HCA 51 at 473), or where the party's case had "no real prospects of success or was doomed to fail": Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275; [2006] FCAFC 199 at [60]; Ashby at [35]. 15 Third, the threshold of being an "unreasonable act or omission" for the purposes of s 570(2)(b) is generally not crossed "[s]imply because a party does not conduct its litigation in the most efficient way", or because the party "pursues arguments which are ultimately abandoned or rejected by the Court": Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 at [29]. Nor does a "lack of precision" in the way a case was presented necessarily amount to an unreasonable act or omission: Fair Work Ombudsman v Hu (No 2) [2019] FCAFC 175 at [9]. 16 Fourth, s 570 of the Fair Work Act "reflects a policy of protecting a party instituting proceedings from liability for costs"; "costs will rarely be awarded under the section", and "exceptional circumstances are required to justify the making of such an order": Kangan at [6]; Ashby at [35]. 17 CIT argued that I should find that Dr Drummond commenced the proceeding vexatiously or without reasonable cause, or that Dr Drummond's unreasonable acts caused it to incur costs, because: first, Dr Drummond sought leave to appeal before reading the primary judge's judgment and did not subsequently amend his draft notice of appeal; second, the main grounds of appeal that Dr Drummond sought to raise had already been determined by the Full Court; third, Dr Drummond ought to have known that his case had no reasonable prospects of success; and fourth, Dr Drummond raised prolix and convoluted grounds of appeal and included over 1,200 pages of documents in the court book in circumstances where most of those documents were irrelevant to the proceeding. 18 While Dr Drummond's conduct of the proceeding was far from ideal, and I ultimately found that the decision of the primary judge was not attended by sufficient doubt to warrant the grant of leave to appeal, I am not persuaded that Dr Drummond either commenced the proceeding "vexatiously or without reasonable cause" or engaged in any "unreasonable act or omission" which caused CIT to incur any additional costs. That is so for a number of reasons. 19 First, I do not consider that much, if anything, turns on the fact that Dr Drummond had not read the primary judge's reasons for judgment before filing his application for leave to appeal. Dr Drummond was obviously not present when the primary judge delivered his ex tempore judgment and it is not entirely clear when the primary judge's written reasons for judgment were published and provided to Dr Drummond. It is tolerably clear, however, that Dr Drummond was either generally aware of the primary judge's reasons for refusing his adjournment application and dismissing the primary proceeding, or at least surmised what those reasons were or were likely to have been. Given the limited time within which Dr Drummond was required to file his application for leave to appeal, the mere fact that he filed the application before he read the primary judge's reasons does not support a finding that he commenced the proceeding vexatiously or without reasonable cause. Nor does the fact that he did not subsequently amend his application. I am also not satisfied that the filing of the application in those circumstances was an unreasonable act which caused CIT to incur further costs. 20 Second, it may be accepted that some of Dr Drummond's proposed appeal grounds or submissions had already been addressed by the Full Court. The clearest example of that was Dr Drummond's assertion of actual bias on the part of the primary judge. It is abundantly clear, however, that at least some of Dr Drummond's arguments as to why the primary judge erred had not been addressed by the Full Court. Clearly the Full Court had not addressed Dr Drummond's contention that, in refusing his adjournment request and dismissing the primary application, the primary judge did not consider, or give sufficient weight to, his medical evidence, or his argument that the primary judge's decision was legally unreasonable. 21 Third, I am not satisfied that Dr Drummond knew or ought to have known that his case had no reasonable prospects of success, particularly given that he was not legally represented. It should perhaps be noted in this context that Dr Drummond had successfully sought leave to appeal interlocutory decisions of the primary judge on two prior occasions. More importantly, while Dr Drummond's arguments in support of his application for leave to appeal all turned out to be unsuccessful, I am not satisfied that his arguments were not worthy of consideration or were doomed to fail. It was a serious matter for the primary judge to refuse Dr Drummond's adjournment application and dismiss the primary proceeding as a result of his subsequent non-appearance. The primary judge's reasons were also not entirely cohesive or compelling. In those circumstances, I am not satisfied that Dr Drummond's contention that the primary judge's decision was legally unreasonable was entirely hopeless or doomed to fail. Dr Drummond's argument in that regard was at least worthy of consideration in the context of an application for leave to appeal. Nor am I satisfied that Dr Drummond knew, or ought to have known, that his application for leave to appeal was hopeless or doomed to fail. 22 Fourth, it is true that Dr Drummond's appeal grounds and submissions were lengthy, prolix, discursive and difficult to comprehend. Some allowance, however, must be made for the fact that Dr Drummond was not legally represented in this proceeding. In any event, as discussed in my reasons for dismissing the application for leave to appeal, I was ultimately able to distil, from the morass, Dr Drummond's main arguments. Even if some aspects of Dr Drummond's conduct of the proceeding were not ideal, I am not persuaded that he engaged in any particular unreasonable act or omission. Moreover, even if any aspect of Dr Drummond's conduct of the proceeding could be fairly characterised as unreasonable, I am not persuaded that CIT's costs were incurred or increased as a result of any such unreasonable act or omission. I should finally add, in this context, that CIT's conduct of the proceeding was, in my view, also not entirely ideal or above reproach. In particular, the unsatisfactory nature of the court book was not solely a result of Dr Drummond's inclusion of documents. I was also not greatly assisted by CIT's submissions. 23 Fifth, as the authorities referred to earlier make clear, costs will rarely be awarded under s 570(2) of the Fair Work Act and exceptional circumstances are generally required. I am not satisfied that the circumstances of this case are at all exceptional such as to warrant a costs order against Dr Drummond. 24 In all the circumstances, I am satisfied that s 570(1) of the Fair Work Act applies to this proceeding and am not satisfied that the facts of this case engage s 570(2) of the Fair Work Act. It follows that I cannot make a costs order against Dr Drummond. The costs order that I announced at the conclusion of my ex tempore judgment on 5 April 2023 is accordingly set aside. 25 There should be no order as to costs in respect of Dr Drummond's application for leave to appeal. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wigney.