EFEX Group Pty Ltd v Bennett

BESANKO J: 1 I delivered judgment in this matter on 24 May 2023 (EFEX Group Pty Ltd v Bennett [2023] FCA 508). I made an order that the applicant's Originating application be dismissed. 2 As I said in my reasons, the applicant's application was made under s 562 of the Fair Work Act 2009 (Cth) (the FW Act) and s 23 of the Federal Court of Australia Act 1976 (Cth). The applicant sought an order prohibiting the Fair Work Commission from continuing to hear and determine an unfair dismissal application brought by the first respondent, Mr Gerrard Bennett. Mr Bennett's unfair dismissal application was brought under s 394 of the FW Act. 3 Section 570 of the FW Act is in the following terms: (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. 4 The first respondent made an application for costs. Each party made written submissions on the question of costs. The first respondent did not dispute that s 570(1) applied to these proceedings in the sense that there could only be an order for costs if one of the designated sections or subsection 570(2) applied. That approach to the matter is correct (Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (No 2) [2015] FCAFC 166; (2015) 235 FCR 366). 5 The first respondent's application was for 40% of his costs of these proceedings up until 22 October 2021 pursuant to s 570(2)(a) and (b) of the FW Act and s 43 of the Federal Court of Australia Act. He advanced that application on the basis that the applicant's estoppel by convention argument was raised without reasonable cause (s 570(2)(a)) and/or the applicant's conduct in raising and then abandoning the estoppel by convention argument three days prior to the hearing constituted an unreasonable act (s 570(2)(b)). I do not consider that raising an argument in a proceeding which is later abandoned is instituting a proceeding without reasonable cause. The proceeding itself raised an arguable point about whether the first respondent was an employee within the FW Act. In my opinion, raising an argument in a proceeding is not instituting the proceeding, particularly as there is scope to consider acts of unreasonably raising arguments under subsection (2)(b). It seems to me then that the question is whether it was an unreasonable act by the applicant to raise the estoppel by convention argument only to abandon it shortly before the hearing. 6 I noted in my main reasons (at [8]) that the applicant in its written submissions advanced an argument that estoppel by convention precluded the first respondent from contending that he was an employee of the applicant and that that argument was abandoned at the hearing. 7 The applicant's Outline of Submissions filed and served before the hearing advanced the argument based on estoppel by convention in five paragraphs over approximately three pages. The first respondent's Outline of Submissions responds to the argument in approximately 30 paragraphs over approximately five pages. The applicant's Submissions in Reply replied to the argument in 11 paragraphs. 8 I would not make an order for costs in these proceedings. No doubt from one perspective, the estoppel by convention argument may be seen as a separate issue. However, the fact of the matter is that the factual basis for the argument is the same as the argument concerning whether the first respondent was an employee or an independent contractor. It would be difficult to assess the "additional" costs caused by the argument and they are not likely to be a substantial part of the first respondent's costs of the proceedings. In those circumstances, the policy behind the section, that is, generally speaking costs are not awarded, should prevail. 9 The first respondent's application for 40% of his costs of these proceedings up until 22 October 2021 is dismissed. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Besanko.