Grounds for costs claim
14 The FWO contends that the MUA's relevant acts and omissions in the part of the proceeding that concerned the MUA's liability for the contraventions were unreasonable and unreasonably caused the FWO to incur the costs of that part of the proceeding.
15 The FWO, in its written submissions, relied upon two particular acts or omissions of the MUA:
(a) the making of a "no case submission" by the MUA which was not reasonably arguable, and which amounted to an unreasonable act; and/or
(b) the MUA's failure to call its officer, Mr Chris Cain, as a witness, or otherwise to make admissions with respect to his conduct towards the Loves and in relation to the "OMS employment practice" and the "MUA membership practice", as those phrases are defined in the MUA Liability Judgment at [4] and [5].
16 Furthermore, in its written submissions, the FWO conceded that in advancing its costs claim it did not submit that the MUA was not entitled to defend the proceeding brought against it by the applicant, and to raise in its defence all reasonably arguable matters (including by way of a reasonably arguable no case submission). Such an approach it acknowledged, correctly in my opinion, could never be held to amount to an unreasonable act or omission, and it does not contend otherwise.
17 Nonetheless, the FWO, on the hearing of its application, submitted that it was seeking costs because the MUA defended the proceeding when it had no actual defence.
18 Counsel for the FWO in argument characterised the initial grounds relied upon as being demonstrative of his new wider submission that the MUA never had any defence.
19 The background facts are not controversial and are drawn from the parties' respective written submissions.
20 The FWO commenced the proceedings by application and statement of claim on 28 June 2011.
21 The Court delivered judgment against OMS on 17 May 2012: Fair Work Ombudsman v Offshore Marine Services Pty Ltd [2012] FCA 498 (OMS Liability Judgment).
22 The FWO then filed five further affidavits on 10 and 13 August 2012, including the initial affidavits of Mr and Mrs Love as well as a brief initial outline of Ms Tamianne McSherry's evidence.
23 On 8 November 2012, the matter was set down for hearing the first available date after 1 February 2013. The hearing was ultimately set for three days from 3 April 2013. The affidavit of Ms McSherry was served on the MUA on or about 28 March 2013.
24 The day before the hearing the FWO filed further affidavits, including the detailed affidavit of Ms McSherry and a further affidavit of Mr Love.
25 It was also only in the week before the hearing that the FWO served the draft Amended Application and Amended Statement of Claim. Leave to file those documents was given on 3 April 2013.
26 The following emerges from this background.
27 The affidavit of Ms McSherry, served on the MUA on or about 28 March 2013 and filed the day before the hearing, contained evidence regarding her intention to employ the Loves had they obtained membership of the MUA. It also contained evidence regarding conversations between her and MUA representatives during which, Ms McSherry said, in effect, they encouraged or incited her not to employ non-MUA members: see, for example, at [14], [16]. This evidence was obviously important to the FWO's case that the MUA's conduct had prejudiced the Loves in their prospective employment. The MUA was not obliged to accept this evidence without testing it.
28 As to the MUA's knowledge of the case generally prior to the filing of the FWO's evidence, the MUA at the request of its solicitors was provided with copies of the documents referred to in the Statement of Claim on or about 21 October 2011. This included the pre-employment forms referred to at [17] of Ms McSherry's affidavit and the emails referred to at [24]-[29] of her affidavit. The documents provided also included additional emails between Ms McSherry and the Loves and documents and emails between the MUA and employees of OMS. Furthermore, the MUA was provided with the Statement of Agreed Facts between the FWO and OMS on 13 January 2012 and the material filed by the FWO in relation to the hearing on 17 April 2012.
29 The affidavits of the Loves disclosed inconsistencies between the evidence they had given to the FWO investigators and their evidence they had given for the purpose of the proceedings, as was pointed out at [75] and [87] of the MUA Liability Judgment. It is not to the point that those inconsistencies did not relate to Mr Cain's involvement in the matter.
30 Almost two years after the FWO had commenced the proceedings, and in the week before the hearing, the FWO wrought a fundamental change to its case by means of the Amended Application. It was only then that the FWO claimed that the MUA was directly liable for contraventions. The direct liability claims ended up comprising two-thirds of the contraventions in which the MUA was found to have engaged.
31 Even so, the claim that the MUA was directly liable, and not only liable as an accessory, was based on essentially the same facts and circumstances, of which the MUA had been aware since at least 2011 and certainly by August 2012 when the majority of the applicant's affidavit material was filed.
32 More significantly the FWO case depended on the Court accepting the evidence of the Loves. There were inconsistencies between the Loves' affidavit evidence and the evidence they gave to the FWO investigators. Cross-examination exposed further inconsistencies, as was noted at [87] of the MUA Liability Judgment. I concluded that those inconsistencies were immaterial (at [87]-[88]). However, in my view, the MUA was entitled to defend the proceedings by cross-examining the Loves in order to test the cogency and reliability of their evidence. These were not merely peripheral issues. The ultimate findings of the Court on these issues was, self-evidently, not known prior to or during the trial.
33 Contrary to the FWO's submission, there was no requirement that the MUA "put" a positive defence to witnesses called by the FWO.
34 The two grounds initially relied upon in the costs application do not demonstrate that the MUA had no defence.
35 The FWO appears to invite the Court to find that it was unreasonable for the MUA not to admit facts which the "Court had already found to exist (based on a statement of agreed facts)" in the OMS Liability Judgment. That invitation should not be accepted. The MUA was not a party to the statement of agreed facts and was not bound by the findings in the OMS Liability Judgment.
36 I do not accept the FWO's submission that the MUA's approach to the liability part of the proceeding went beyond a legitimately assertive and properly based defensive position but rather was extremely unreasonable as it included taking unarguable or groundless points, or points that were not reasonably arguable. I do not accept, although I ruled against the no case submission, that it was unarguable. I made no finding to that effect.
37 In any event it could never be the case that in not calling Mr Cain, and in making a no case submission, the MUA should be ordered to pay the FWO's costs of the proceeding in relation to MUA's liability. It was not submitted that there should be some more limited costs order.
38 The FWO submits that the MUA could have and should have made more admissions than it did. I reject this submission. It had no such obligation nor was it unreasonable to put the FWO to proof of its case.
39 I accept the MUA's submission that this is not an "exceptional" case in which costs should be awarded under s 570 of the FW Act. As I have observed, the FWO's case was, in part, dependent on the Court accepting the credibility and reliability of the FWO's witnesses. The FWO's evidence contained inconsistencies appropriate for the MUA to test in cross-examination. I accept the MUA's submission that the fact that the Court ultimately did not accept the MUA's case does not mean that it was unreasonable for the MUA to prosecute it. That the FWO, or even the Court, might consider the MUA's case to have been weak again does not mean that it was unreasonable for the MUA to defend these civil penalty proceedings: Clark v Dixie Cummings Enterprises Pty Ltd at [14].
40 I refuse the application for costs.