McLoughlin v Randstad Pty Ltd

THE COURT: 1 Ms McLoughlin brought proceedings in what was then the Federal Circuit Court. She claimed that she was dismissed from her employment by Randstad Pty Ltd in contravention of the provisions of the Fair Work Act 2009 (Cth). Claims were also brought against employees of Randstad said to have been involved in those alleged contraventions. After a three day hearing, her case was dismissed. Ms McLoughlin brought an appeal in this Court. On 26 August 2021, we allowed the appeal and remitted the matter for re-hearing before a different Circuit Court judge. We made orders for the parties to provide written submissions as to costs, with the question of costs to be dealt with on the papers. 2 Ms McLoughlin seeks an order that the respondents to the appeal pay her costs of the appeal on an indemnity basis, alternatively an order for costs on the 'ordinary basis'. She also seeks a costs certificate under s 8 of the Federal Proceedings (Costs) Act 1981 (Cth). The respondents oppose any order for costs against them. The respondents other than Randstad also seek a costs certificate under the Federal Proceedings (Costs) Act. For the following reasons, there should be no order as to costs of the appeal and the certificate sought by Ms McLoughlin should be granted.

Application for a costs order against the respondents 3 In the case of proceedings in a Court in relation to a matter arising under the Fair Work Act (including an appeal), a party may only be ordered to pay costs in the circumstances provided for in the Act. The application by Ms McLoughlin relies upon s 570(2)(b) to support her claim. It provides that a party may be ordered to pay costs only if 'the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs'. It is submitted for Ms McLoughlin that the act of the respondents in defending the appeal was unreasonable. It is said that it was 'patently obvious' that there were no reasonable prospects of the respondents succeeding in defending the claim and that the respondents were 'entirely unable to articulate any convincing argument that the [primary judge] considered, let alone decided, the issues of fact and law he was called to decide by reference to the submissions of the parties at first instance'. 4 The submission was advanced by analogy to those cases where the Court is asked to order costs under s 570(2)(a) which allows costs to be ordered 'if the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause'. The relevant principles to be applied in considering whether to make an order as provided for by s 570(2)(a) were summarised in Australian Workers' Union v Leighton Contractors Pty Limited (No 2) [2013] FCAFC 23; (2013) 232 FCR 428 at [7]. There it was said that given the nature of the protection offered by s 570(2), a person will rarely be ordered to pay the costs of the proceeding. The relevant question was said to be whether the proceeding had reasonable prospects of success at the time it was instituted not whether it ultimately failed. Importantly, the Court went on to emphasise that such circumstances enlivened the jurisdiction and that: '[e]ven if the Court has jurisdiction to make a costs order, it retains the discretion to refrain from exercising it in an appropriate case': at [8]. 5 An appellant must demonstrate error. Even if a respondent is persuaded to concede the merits of an appeal, the Court will not make orders allowing an appeal unless satisfied that there has been error. Therefore, Ms McLoughlin would have been burdened at least with the costs of bringing the present appeal and demonstrating its merit irrespective of the stance taken by the respondents. 6 Further, a party who responds to an appeal is not in the same position as an appellant. The respondent to an appeal has the benefit of a favourable decision. The respondent bears no responsibility for the terms in which the reasons for that decision has been expressed. Even if that decision has been inadequately reasoned, the respondent may seek to support the decision by reference to evidence and contentions not addressed by the primary judge in the reasons. 7 Significantly, the appeal in the present case was not founded solely upon the ground that the reasons given by the primary judge were inadequate. There were some nine grounds raised. If indeed it were inevitable, as is now submitted, that the appeal must succeed on the ground in relation to insufficiency of reasons and the matter remitted then one may question why so many other points were raised to support the appeal. 8 In truth, the outcome for which the appellant pressed was a determination of the merits on appeal notwithstanding the way in which the reasons had been formulated. Much of the written argument was advanced with a view to achieving that outcome. In the result, that main aspect of the case advanced for Ms McLoughlin on appeal was not successful. 9 There is no submission advanced by Ms McLoughlin to the effect that it was proposed by way of formal offer that the appeal be resolved on the basis of a remitter because of the inadequacy of the reasoning by the primary judge. This is not a case where the unreasonableness by the respondents is said to be the rejection of a sensible formal proposal to resolve the appeal. 10 To the extent that reliance is placed upon the case management direction made at the outset of the appeal that required a well-crafted chronology and the observation made by the Court in that context that there was a great deal of difficulty in trying to follow the reasons of the primary judge, those matters do not mean that the respondents should have conceded the appeal. As has been noted, obscure or insufficient reasoning by a primary judge, of itself, does not mean that an appeal will be successful. A respondent may seek to overcome such matters by points of contention. 11 On the assumption that it would be sufficient to enliven the discretion conferred by s 570(2)(b) that the defence of an appeal was unreasonable because it was unlikely to succeed, we are not satisfied that the conduct of the respondents in the present case was unreasonable. There were evident difficulties with the reasons of the primary judge. They were candidly acknowledged by counsel for the respondents at the hearing of the appeal. However, it was reasonable for counsel to seek to support the decision by reference to the findings that had been made together with other evidence and the contentions advanced on appeal. Those submissions sought to deal with the deficiencies in the reasons in a way that has not been shown to be unreasonable. Further, the respondents were justified in taking that approach in circumstances where the case advanced for Ms McLoughlin on appeal sought orders for the appeal to be allowed and relief to be granted on appeal. 12 In those circumstances and for those reasons, we are not satisfied that the relevant costs discretion has been enlivened. We are also not satisfied that a basis has been demonstrated for the making of an order as to indemnity costs.

Certificates 13 Randstad accepts that it is not entitled to a costs certificate by reason that it has a paid up capital of $200,000 or more: see s 14(1)(f) of the Federal Proceedings (Costs) Act. However, certificates are sought on behalf of the second and third respondents, each employees of the first respondent. All respondents were represented by the same solicitors and counsel. They advanced the same arguments on appeal. There is no evidence to suggest that the second and third respondents are severally liable to meet those costs or indeed must meet any of them if they are not paid by the first respondent. In those circumstances, we are not persuaded that any certificate should be granted to the second and third respondents. 14 The appellant sought a certificate under s 8(1) of the Federal Proceedings (Costs) Act. It provides that 'where, in a Federal appeal that succeeds on a question of law, the court that heard the appeal grants a new trial in a cause of a civil nature, the court may, on the application of a party to the cause, grant to the party a costs certificate in respect of the new trial'. 15 We described in our reasons for allowing the appeal, the nature of the reasons provided and why there was no alternative but to remit the matter for re-hearing: McLoughlin v Randstad Pty Ltd [2021] FCAFC 160. The remittal arises due to no fault on the part of Ms McLoughlin or those acting on her behalf. Indeed it has occurred despite the filing of careful written submissions identifying the factual and legal issues for determination. In the circumstances described, we are satisfied that there should be a certificate of the kind described in s 8(3) of the Federal Proceedings (Costs) Act and we will so order. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices White, O'Callaghan and Colvin.