For the reasons outlined above, Golden Cockerel is entitled to its costs for the entire proceeding. From the time Ms Edwards rejected Golden Cockerel's offer of 16 April 2024, Golden Cockerel should be entitled to those costs on an indemnity basis.
[2]
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Collier.
Parties
Applicant/Plaintiff:
Edwards
Respondent/Defendant:
Golden Cockerel Pty Ltd
Legislation Cited (3)
Work Act 2009
Court of Australia Act 1976
Court Rules 2011
Cases Cited (13)
In my earlier judgment in this matter, Edwards v Golden Cockerel Pty Ltd[2025] FCA 152, I found that the respondent, Golden Cockerel Pty Ltd (Golden Cockerel) had no case to answer in respect of the claims of the applicant, Ms Edwards, in respect of ss 340 and 351 of the Fair Work Act 2009 (Cth) (FWA), or found alternatively that the Amended Statement of Claim filed by Ms Edwards on 14 October 2022 be struck out pursuant to rule 16.21(1)(b),(c),(d),(e) and (f) of the Federal Court Rules 2011 (Cth).
As a general proposition a party to proceedings under the FWA may be ordered by the Court to pay costs incurred by another party to the proceedings only in accordance with the provisions of s 570(2), or ss 569 or 569A of the FWA. In this matter, however, the parties have asked to be heard further in respect of their costs, and have filed relevant submissions and material.
In summary Ms Edwards submitted:
A costs order in the circumstances would be contrary to the protective intent of the FWA.
There is a high threshold prescribed by 570(2)(a) of the FWA before costs are awarded. The words "or vexatiously" elevates the circumstances to that of an exceptional nature.
At the time of commencement there had been no judicial consideration of many of the issues raised in these proceedings. To the extent that Golden Cockerel contended that the proceedings were without merit, this contention was made with the benefit of hindsight, and ignores the position of the law and Ms Edwards at the time of the commencement of the proceedings.
Ms Edwards was a litigant in receipt of the legal advice of a legal practitioner in the face of uncertain law and one of eight aggrieved employees, whose litigation goal was to be reinstated. It cannot be stated that a reasonable person in her position would have made another decision.
The issue of unreasonableness within the meaning of s 570(2) does not turn exclusively on success at trial.
Although Golden Cockerel contended that Ms Edwards' refusal to accept each offer for settlement were unreasonable acts, Golden Cockerel does not particularise any other acts or omissions as unreasonable.
Golden Cockerel bears the onus of establishing that the offers made were reasonable in their nature, namely on reasonable terms and in a reasonable way (Melbourne Stadiums Ltd v Sautner[2015] FCAFC 20; (2015) 229 FCR 221, [166]). However, each of the offers made by Golden Cockerel were made in circumstances which were unreasonable because:
On each occasion Ms Edwards was provided insufficient time to respond (i.e., one day or two days depending on the offer);
Each offer required or may have required legal advice;
The content of the offers was unreasonable because they failed to address reinstatement, which is what Ms Edwards wanted; and
In circumstances where Ms Edwards commenced proceedings as one of multiple applicants, the Court may be minded to order that she pay a proportion of the indemnity costs for which she is otherwise liable.
Principles relevant to the application of s 570 were recently summarised by Owens J in Burt v University of Sydney (No 2)[2025] FCA 596. I respectfully adopt the following summary of his Honour in that case:
By limiting the circumstances in which a costs order may be made, s 570 of the Fair Work Act operates to promote access to justice by ensuring that the spectre of an adverse costs order does not discourage litigants with genuine grievances, and an arguable evidentiary and legal basis for them, from advancing their claims in a complete and robust way: Trustee for The MTGI Trust v Johnston (No 2)[2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ); Ryan v Primesafe[2015] FCA 8 at [64] (Mortimer J). It follows that the "Court ought be very careful indeed to exercise the discretion provided by s 570(2) and should not do so other than in a clear case": Saxena v PPF Asset Management Ltd[2011] FCA 395 at [6] (Bromberg J).
Even if the preconditions specified by s 570(2) exist, the Court retains a discretion as to whether it will award costs: Dahdah v Platinum Distributors Australia Pty Ltd (Costs)[2023] FCAFC 102 at [31] (Rangiah, Goodman and McElwaine JJ); ; at (Dowsett, McKerracher and Katzmann JJ); at (Rares, Flick and Jagot JJ).
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] IRCA 654; (1996) 70 IR 254 at 257 per Wilcox CJ.
In relation to s 570(2)(b), the principles governing the operation of that sub-section were helpfully collected by Halley J in BDR21 v Australian Broadcasting Corporation (No 2)[2021] FCA 1347 at [26]. Critically:
...
(b) the touchstone for the exercise of the power is unreasonableness, not negligence or inefficiency: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3)[2017] FCA 810 at [26] (Katzmann J); Tucker v State of Victoria [No 2][2021] VSCA 182 at [32(h)] (Kyrou, McLeish and Sifris JJA);
(c) the fact that a party has conducted litigation inefficiently, made belated concessions, or adopted a misguided approach may be relevant to, but will not be conclusive of, the question of unreasonableness: Mutch v ISG Management Pty Ltd (No 2) at [8] (Bromberg J) citing Construction Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 at [29] (Tamberlin, Gyles and Gilmour JJ) and Hutchinson v Comcare (No 2)[2017] FCA 370 at [8] (Bromberg J); Tucker at [32(h)];
(d) the term "unreasonableness" is not conducive to precise definition, rather it is to be understood as controlling the extent of the limitation on the making of a costs order pursuant to s 570 of the Fair Work Act and it takes much of its meaning from the underlying reason for that limitation: Mutch at [7];
(e) unreasonableness is to be determined objectively, it is a question of impression and degree and is to be assessed by reference to the particular circumstances of a given case: at [32(g)] citing at (Rangiah, Charlesworth and Snaden JJ)]
Applying these principles to the present case, I am satisfied that Ms Edwards vexatiously commenced these proceedings, and later vexatiously refused to discontinue or otherwise compromise her claim, notwithstanding that it was plain that her claim was hopeless and doomed to fail. I have formed this view for the following reasons.
First, Ms Edwards abandoned most of her original claims by the date of the hearing, which indicates acceptance by her that those original abandoned claims lacked merit. In respect of the claims ultimately pressed by Ms Edwards, I found in the primary judgment that there was no case to answer. It appears clear that, at least by the time of hearing of 16 April 2024, her claim had no real prospects of success or was doomed to fail.
Second, the reasonableness of an offer to settle proceedings must be assessed by regard to all relevant circumstances, including the issues in the case, the prospects of success at the relevant time, the manner of conduct of the proceedings and any counteroffers (see for example Hanson-Young v Leyonhjelm (No 5)[2020] FCA 34 at [42]). Materially, Golden Cockerel's settlement offers were monetary amounts (with the exception of the settlement offer of 16 April 2024 where no monetary amount was offered), and the costs of the proceedings being borne by each party. Ms Edwards submitted that those settlement offers were not reasonable because they did not address her wish to be reinstated. However, there was no evidence, for example, of any prospective loss of entitlements to Ms Edwards referable to her period of service if she were not reinstated (cf Roy Morgan Research Ltd v Baker[2014] FWCFB 1175 at [12]). Ms Edwards gave evidence of her wish to work in the meat processing industry. In circumstances where the strength of Ms Edwards' case was plainly seriously in doubt, and, properly advised, she may have concluded that her attempt to secure reinstatement was attended by difficulties (cf comments of Jessup J in Sperandio v Lynch (No 3)[2007] FCA 1243 at [11]), I consider that Ms Edwards acted unreasonably in failing to accept the settlement offers of Golden Cockerel. I further find that the settlement offers of Golden Cockerel were reasonable. I am not prepared to find that Golden Cockerel was unreasonable in failing to include in any of its settlement offers to Ms Edwards the prospect of her being reinstated into her employment, and I do not consider giving Ms Edwards relatively limited periods of time in which to consider the multiple settlement offers made was unreasonable.
(1996) 70 IR 254
(2008) 170 FCR 574
(1993) 46 FCR 225
(1990) 170 CLR 534
(2015) 229 FCR 221
(2013) 232 FCR 428
(2006) 156 FCR 275
Australian Workers Union v Leighton Contractors Pty Ltd (No 2)
For the purposes of s 570(2)(a), costs will only be capable of being awarded against a party where their 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] (Black CJ, North and Mansfield JJ); Ashby v Slipper (No 2)[2014] FCAFC 67 at [35] (Mansfield, Siopis and Gilmour JJ). The focus of that question necessarily changes with the nature of the proceedings in relation to which the costs order is sought. Here, it is an application for leave to appeal and a related extension of time. This case is closer, therefore, to the context of an appeal, in relation to which the Full Court observed in Baker v Patrick Projects Pty Ltd (No 2)[2014] FCAFC 166 at [10] (Dowsett, Tracey and Katzmann JJ):
Of particular relevance for present purposes, it is also well-established that the failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2)(b):Melbourne Stadium Ltd v Sautner[2015] FCAFC 20 at [166] (Tracey, Gilmour, Jagot and Beach JJ).
Third, the continued pressing by Ms Edwards of her claims following the hearing of 16 April 2024, in circumstances where she closed her case within 10 minutes of opening without calling any witnesses, and in the face of an offer by the respondent to settle the proceedings with each party bearing their own costs, suggests more than a misguided approach to litigation on Ms Edwards' part. It suggests an unreasonable approach by Ms Edwards to the prospects of success in her case. I do not consider that any alleged uncertainty in respect of the state of the law could be considered a justification for Ms Edwards continuing to press her claim in such circumstances.
I am satisfied that both s 570(2)(a) and s 570(2)(b) of the FWA are enlivened, and that Ms Edwards should be liable for the costs of Golden Cockerel in respect of these proceedings.
The next question to be addressed is on what basis should costs be awarded.
Section 43 of the Federal Court of Australia Act 1976 (Cth) confers on the Court a discretionary jurisdiction in relation to costs. As a general proposition, where a party is entitled to its costs, the ordinary practice of the Court is to award costs on a party-party basis: Colgate-Palmolive Co v Cussons Pty Ltd[1993] FCA 536; (1993) 46 FCR 225 at 233; Wills v Chief Executive Officer of the Australian Skills Quality Authority (Costs)[2022] FCAFC 43 at [20]. However, Golden Cockerel has submitted that indemnity costs should be ordered.
As the Full Court recently reiterated in SunshineLoans Pty Ltd v Australian Securities and Investments Commission (No 2)[2025] FCAFC 60:
Relevant principles concerning the circumstances in which costs may be awarded on an indemnity basis were summarised in Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2)[2017] FCAFC 116 at [3]- [5] (Jagot, Yates and Murphy JJ). Broadly, there must be 'some special or unusual feature' that means that costs were imposed unreasonably on the party who seeks the indemnity costs order. As with all costs orders, the purpose remains compensatory not punitive: King v Yurisich (No 2)[2007] FCAFC 51 at [19] (Sundberg, Weinberg and Rares JJ) citing Latoudis v Casey[1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason CJ), 563 (Toohey J), 567 (McHugh J). Generally speaking, indemnity costs orders are only imposed where it is clear that there has been unreasonable conduct that has added to the cost burden of the proceedings: Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5)[2021] FCA 246 at [11] (Wigney J).
I am satisfied that the costs of Golden Cockerel of and incidental to the proceedings until 16 April 2024 should be assessed on a party-party basis. However, I am also persuaded that from that date the case was characterised by "some special or unusual feature" warranting an order of indemnity costs against Ms Edwards. In particular, I note that:
Although Golden Cockerel submitted that indemnity costs could be awarded against Ms Edwards from the commencement of the proceedings, it accepted in the alternative that costs should be awarded on a party-party basis.
Ms Edwards' conduct of her proceedings on 16 April 2024 was minimal. A hearing listed for two days, namely 16 and 17 April 2024, commenced at 10.17am, with Court adjourning at 11.08am.
Ms Edwards could have discontinued her case after the hearing of 16 April 2024 when it was clear that Ms Edwards had little of merit to press. However, Ms Edwards continued to press her claim, notwithstanding the submission by Counsel for Golden Cockerel at that hearing that Golden Cockerel intended to move a submission of no case to answer and strike out.
As is plain from the evidence before me, Golden Cockerel made a final offer of settlement of the proceedings to Ms Edwards after the hearing of 16 April 2024. That this is so is plain from: