Sivwright v St Ives Group Pty Ltd

Introduction 1 On 8 September 2023, upon the originating application of Loretta Sivwright, the Court made orders granting her leave to make an application alleging unlawful discrimination by St Ives Group Pty Ltd and Michael Heath, dismissing the application as against Michelle De Ronchi, Bruce Ross-Adams and Tracy Rowling and reserving costs: Sivwright v St Ives Group Pty Ltd (No 2) [2023] FCA 1063. These reasons concern the costs reserved. 2 Ms Sivwright contends that orders should be made to the following effect: (1) St Ives pay Ms Sivwright's costs of the proceeding from 8 January 2021, other than those costs the subject of the order of Jackson J of 22 February 2022. (2) Ms Sivwright pay Ms Rowling's costs of the proceeding. (3) There be no orders as to costs of the proceeding as against Mr Heath, Ms De Ronchi and Mr Ross-Adams. 3 St Ives contends that there should be no order as to the costs against it. Ms Rowling agrees that Ms Sivwright should pay her costs of the proceeding. Mr Heath, Ms De Ronchi and Mr Ross-Adams all accept that there should be no order as to the costs of the proceeding against them. 4 Although the proceeding concerns an application for leave pursuant to s 46PO(3A) of the Australian Human Rights Commission Act 1986 (Cth), as Ms Sivwright filed a draft statement of claim that includes allegations of breaches of the Fair Work Act 2009 (Cth), it is common ground that the discretion to award costs in the proceeding is governed by s 570 of the Fair Work Act. Put another way, the parties accept that Ms Sivwright's claims for breaches of the Sex Discrimination Act 1984 (Cth) and Disability Discrimination Act 1992 (Cth) and her claims for breaches of the Fair Work Act form part of the same matter and, as such, s 570 applies: Sivwright v St Ives Group Pty Ltd [2022] FCA 136 at [5]. 5 Section 570 of the Fair Work Act provides, relevantly: 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 … 6 Ms Sivwright accepts, in effect, that the proceeding commenced against Ms Rowling was instituted without reasonable cause. I am satisfied that is an appropriate concession and that with respect to the proceeding as against Ms Rowling costs should follow the event. I also accept that s 570(2)(a) does not apply with respect to the proceeding as instituted against Ms De Ronchi and Mr Ross-Adams and that s 570(2)(b) does not apply with respect to any act or omission on the part of Mr Heath. Therefore, the only real issue concerning costs is whether any act or omission on the part of St Ives was unreasonable and caused Ms Sivwright to incur costs. 7 Ms Sivwright contends that St Ives acted unreasonably by contending that her claim that Mr Heath's sexual advances were 'unwelcome' was not reasonably arguable because the facts deposed in her affidavits were inconsistent with her prior statements in contemporaneous documents. Ms Sivwright also contends that St Ives acted unreasonably in requiring Dr Lawrence Blumberg, a deponent of affidavits upon which Ms Sivwright relied, to attend for cross-examination and 'unnecessarily' cross-examining him. For the reasons that follow, the impugned acts of St Ives were not unreasonable in the relevant sense and the preconditions to a costs order under s 570(2)(b) are not satisfied.

Applicable principles 8 There was no significant point of difference between the parties on the operation of s 570(2)(b) of the Fair Work Act and, in substance, they accept that Jackson J correctly captured the applicable principles in Sivwright (No 1) (at [9]-[10]) as follows: 9 … Whether a party has conducted itself in such a way as to cross the threshold of unreasonableness will depend on the particular circumstances of the case: Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574 (CFMEU v Clarke) at [28] (a decision under a similar provision in predecessor legislation of the FWA). In Mutch v ISG Management Pty Ltd (No 2) [2020] FCA 954 at [7]-[8] Bromberg J said (citations omitted): The term 'unreasonable' in s 570(2)(b) is unsurprisingly not defined. It is a term not conducive to precise definition. The word 'unreasonable' is used in s 570(2)(b) to control the extent of the limitation on the making of a costs order sought to be imposed by s 570. The term takes much of its meaning from the underlying reason for that limitation. It is well settled that the limitation imposed by s 570 seeks to provide access to justice by ensuring that the fear of an adverse costs order does not discourage litigants from pursuing good claims. As Lee J stated in Bywater v Appco Group Australia Pty Ltd [2019] FCA 799 at [7] that the Fair Work jurisdiction should be primarily a 'no costs' jurisdiction reflects 'a long standing, underlying legislative intention to ensure access to justice in relation to Fair Work-type matters'. With this in mind, the occasions upon which costs will be awarded under s 570 are likely to be exceptional. The fact that a party has conducted litigation inefficiently, made late concessions, or adopted a misguided approach will be relevant to, but not conclusive of, the party having acted unreasonably in a sense relevant to s 570(2)(b). 10 Even if the conduct of a party is sufficiently unreasonable to enliven the discretion, the discretion should then be exercised bearing in mind the policy of the provision as Bromberg J outlined. In CFMEU v Clarke the Full Court said (at [29]) that: while courts should use the discretion … to ensure that parties to litigation … do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise the discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation … in the manner which they deem best. 9 In BDR21 v Australian Broadcasting Corporation (No 2) [2021] FCA 1347 (at [26]) Halley J gave the following further apposite explanation of 'unreasonable' within the meaning of s 570(2)(b): (a) the occasions on which costs will be awarded under s 570 of the FW Act are likely to be exceptional: Mutch v ISG Management Pty Ltd (No 2) [2020] FCA 954 (Mutch) at [8] (Bromberg J); (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 (Grouped Property Services) at [26] (Katzmann J); Tucker v State of Victoria [No 2] [2021] VSCA 182 (Tucker) 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 at [8] (Bromberg J) citing Construction Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 (Clarke) at [29] (Tamberlin, Gyles and Gilmour JJ) and Hutchinson v Comcare (No 2) [2017] FCA 370 (Comcare (No 2)) 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 FW 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: Tucker at [32(g)] citing PIA Mortgage Services Pty Ltd v King [No 2] [2020] FCAFC 53 at [15] (Rangiah, Charlesworth and Snaden JJ); (f) it is well settled that the limitation imposed by s 570 of the FW Act seeks to provide access to justice by ensuring that the fear of an adverse costs order does not discourage litigants from pursuing good claims: Mutch at [7] citing 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); Comcare (No 2) at [8] (Bromberg J); (g) if the power to make an order pursuant to s 570 of the FW Act is enlivened then in determining whether to exercise its discretion to make an order, the Court is bound by s 37M(3) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) to exercise that discretion in the way that best promotes the overarching purpose of any statutory provision on a matter of practice and procedure referred to in s 37M of the FCA Act: Grouped Property Services at [26] (Katzmann J).

Summary of the parties' submissions 10 As mentioned in Sivwright (No 2) (at [8]-[11]), at a relatively early stage in the proceeding, McKerracher J had ordered the parties to confer about whether the originating application could be heard on the papers. But, in the end, the application was heard at a final hearing over two days at which 11 affidavits running to more than 1,300 pages were read and St Ives cross-examined Dr Blumberg for a lengthy period. Further, with the benefit of hindsight, the manner in which the proceeding and hearing were conducted was difficult to square with the requirements of s 37M and s 37N of the Federal Court Act and judicial statements to the effect that s 46PO(3A) of the AHRC Act is intended to filter out and preclude complaints the merits of which are disproportionate to the time and resources likely to be consumed by dealing with them in substantive proceedings and it would be to misunderstand the leave requirement to embark on a detailed consideration and examination of the merits of the underlying arguments about unlawful discrimination. In substance, Ms Sivwright submits that St Ives is solely or mostly responsible for the elements of the manner in which the proceeding and hearing were conducted of which the Court was critical in Sivwright (No 2). Further, that conduct was unreasonable and caused Ms Sivwright to incur costs. 11 Ms Sivwright submits, in substance, that having regard to the function of s 46PO(3A) as a filter, it was unreasonable for St Ives to contend that Ms Sivwright's claim to the effect that Mr Heath's sexual advances were 'unwelcome' was not reasonably arguable because St Ives' contention required the Court to undertake a detailed examination of the merits of Ms Sivwright's claim including attempting to resolve asserted inconsistencies between the facts deposed in Ms Sivwright's affidavits and prior statements of Ms Sivwright in text messages and other contemporaneous documents drawn from voluminous materials contained in affidavits St Ives read at the hearing. That submission is accurate insofar as a significant proportion of the 1,300 pages to which reference has been made consisted of text messages and other documents upon which St Ives relied to contradict the facts deposed in Ms Sivwright's affidavits and part of the reason the hearing required two days was the time taken addressing those materials. 12 Likewise, Ms Sivwright submits, in substance, that having regard to the function of s 46PO(3A), the cross-examination of Dr Blumberg was unnecessary and the attempt to undermine his opinion evidence served no purpose other than to increase the length and costs of the hearing. Again, that submission is accurate insofar as a significant proportion of the two-day hearing was taken up by the cross-examination of Dr Blumberg. 13 St Ives submits that it was not unreasonable to contend that Ms Sivwright's assertion of 'unwelcome' sexual advances was not reasonably arguable and to adduce documentary evidence, albeit a large volume, to make good that contention. St Ives submits, in effect, that Ms Sivwright's notes and the contents and tenor of the large number of text messages between Mr Heath and Ms Sivwright were highly probative to the question of whether Ms Sivwright's claim had sufficient merit to warrant the grant of leave. St Ives supports its submission with aspects of the reasons in Sivwright (No 2) where, amongst other things, the Court observed that the leave question was 'finely balanced' and Ms Sivwright's case 'will face significant headwinds' and was 'not strong'. 14 St Ives submits it was also not unreasonable to test the veracity of Ms Sivwright's statements to the effect that she was not capable of making an unlawful discrimination claim to the Commission before January 2020. Given that Dr Blumberg's evidence was the central basis on which the applicant contended she was incapacitated and unable to bring proceedings without delay, in substance, St Ives submits it was reasonable to conduct that cross-examination to test the foundation for and reliability of his opinions. 15 St Ives also submits that its conduct must be placed into the context of the proceeding as as whole and taken into account with Ms Sivwright's conduct. Here, St Ives draws attention to two interlocutory skirmishes concerning documents to which Dr Blumberg made direct or indirect reference in one of his affidavits. St Ives requested production of the documents which Ms Sivwright refused. St Ives made applications to compel Ms Sivwright to produce her documents which she resisted up to the hearing of the applications before abandoning her resistance and producing the documents at the last minute. Ms Sivwright's conduct resulted in Jackson J making an adverse costs order against her on the ground that her act in resisting production of the documents the subject of the second interlocutory application was unreasonable within the meaning of s 570(2)(b) of the Fair Work Act: Sivwright (No 1) at [39]-[41], [45].

Was St Ives' reliance on documentary evidence unreasonable? 16 In Sivwright (No 2) at [100]-[101] the Court made the following observations about the appropriate approach to be taken to the merits of an application for leave under s 46PO(3A): 100 I approach consideration of the merits of the application for leave from the stand-point that s 46PO(3A) is a filter. It is intended to remove from consideration by the Court applications where use of the Court's resources (and the parties' resources) is disproportionate to the merits of the alleged unlawful discrimination. However, in the exercise of the Court's discretion to grant leave, it is not generally appropriate to undertake a detailed examination of the merits of the proposed application. Nonetheless, there may be circumstances in which it is appropriate to undertake a close examination of the legal or factual issues the applicant proposes to advance to determine if the allegations are 'reasonably arguable'. 101 I also approach consideration of the merits of the factual issues the applicant proposes to advance from the perspective that, in general, it is not appropriate for the Court to attempt to resolve conflicts of affidavit evidence on an interlocutory application: Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729 at 734; Beecham Group Limited v Bristol Laboratories Pty Limited [1968] HCA 1; (1968) 118 CLR 618 at 622. Typically, on an interlocutory application, the question of whether it discloses 'a serious question to be tried' or a claim or defence has 'reasonable prospects of success', is answered on the basis that the statements of fact contained in the affidavit(s) on the application are accepted as true: e.g., Bristol-Myers Squibb Australia Pty Ltd v Astra Pharmaceuticals Pty Ltd [1999] FCA 256; (1999) 45 IPR 144 at [91]-[94], [99], [101]-[102]; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352; (2006) 236 ALR 720 at [43]-[45]. However, 'this does not mean that [the Court] is bound to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement on affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporaneous documents or other statements by the same deponent, or inherently improbable in itself it may be': e.g., Eng Mee Yong v Letchumanan s/o Velayutham [1980] AC 331 at 341. 17 After considering the contemporaneous documents including Ms Sivwright's notes and numerous text messages and other documents, the Court was not satisfied that they presented a consistent, 'undisputed' and contemporaneous record of prior statements that are unequivocally inconsistent with the facts to which Ms Sivwright deposed in her affidavits and, while the documents provided reason to doubt the veracity of Ms Sivwright's statements of fact and explanations, the statements were not inherently improbable or implausible: Sivwright (No 2) at [102]-[131]. While the Court ultimately concluded that there was a serious question to be tried, having regard to the contents and tenor of the documents upon which St Ives relied, it was not unreasonable for St Ives to adduce that evidence and make the submission, in effect, that the Court should not accept the facts to which Ms Sivwright deposed in her affidavits uncritically and that, having regard to the contemporaneous documents or other statements of Ms Sivwright, her statements and explanations were inherently improbable. Notwithstanding the observations the Court made about the nature of an application for leave under s 46PO(3A) of the AHRC Act, in the circumstances it was not 'unreasonable' in the relevant sense to attempt undertaking a close examination of the factual issues Ms Sivwright proposed to advance to determine if her allegations were 'reasonably arguable'.

Was St Ives' cross-examination of Dr Blumberg unreasonable? 18 The Evidence Act 1995 (Cth) applies to all proceedings in this Court including interlocutory proceedings or proceedings of a similar nature and proceedings that are heard in chambers: s 4. A party may question any witness, except as provided by the Evidence Act: s 27. A party may question a witness in any way the party thinks fit, except as provided by Ch 2 or as directed by the Court: s 29(1). Further , r 29.09 of the Federal Court Rules 2011 (Cth) provides that a party may give notice requiring a person making an affidavit to attend for cross-examination and, if that person fails to attend, that person's affidavit may not be used. These provisions of the Evidence Act and the Rules, however, are subject to the Court's power to control the conduct of a proceeding, to make directions on such terms as the Court thinks fit and to the relevance of any evidence elicited during cross-examination: ss 11, 192 and 56 of the Evidence Act. The Court may also dispense with compliance with r 29.09 and permit an affidavit to be used: r 1.34 of the Rules. Accordingly, there are many kinds of hearings where cross-examination of the deponent of an affidavit will not be relevant or in the interests of justice and the Court may make a direction the effect of which is to prevent a party from cross-examining the deponent: see, e.g., Wu v Avin Operations Pty Ltd (No 3) [2006] FCA 1321 at [18] (Kenny J); Selvaratnam v St George - A Division of Westpac Banking Corporation (No 2) [2021] FCA 486 at [43]-[46] (Stewart J); Sayed v Salvation Army Housing [2023] FCA 526 at [93]-[96] (O'Callaghan J); Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156 at [27]-[28] (Lee J). 19 Dr Blumberg made two affidavits that were read on the application. The first was affirmed on 7 January 2021 and the second on 4 August 2021. The affidavits exhibited reports of Dr Blumberg dated 7 January 2021 and 14 July 2021. There were other reports of Dr Blumberg exhibited to the affidavits of other deponents. Dr Blumberg's reports contained a diagnosis of Ms Sivwright's mental illness and he expressed opinions about what she was and was not capable of doing as a consequence of her illness. Ms Sivwright primarily relied on the affidavits and reports of Dr Blumberg to provide opinion evidence to the effect that, as a result of the applicant's mental illness, she was unable to properly instruct her solicitors to make a complaint to the Commission until January 2020. The cross-examination of Dr Blumberg was largely directed towards undermining that opinion. 20 As the Court observed in Sivwright (No 2) (at [172]) delay and any explanation for delay in making a complaint to the Commission is manifestly a relevant consideration in the exercise of the discretion to grant leave under s 46PO(3A). But delay, even unexplained delay, is not in and of itself a determinative factor. Nonetheless, delay and any explanation coupled with doubtful merit of a claim and (or) other factors may be sufficient to result in the refusal of leave. 21 Although the cross-examination of Dr Blumberg was lengthy and, in the end, not particularly effective at undermining his opinion, the subject matter of his cross-examination was relevant to an important consideration on the application and, in effect, the default position of the Evidence Act and Rules was that St Ives was entitled to cross-examine Dr Blumberg on that topic. Further, failing his attendance, unless the Court dispensed with the requirements of r 29.09 of the Rules, Ms Sivwright would not have been able to use Dr Blumberg's affidavits and probably his reports on the application. If Dr Blumberg's opinion had been undermined to any significant degree, it could have resulted in a different outcome on the application. 22 At the case management hearing for listing the application for final hearing Ms Sivwright made no submission to the effect that cross-examination of Dr Blumberg was not necessary, relevant, appropriate or in the interests of justice. There was no objection to his cross-examination and no application for the Court to make any directions preventing or limiting any cross-examination. At a subsequent case management hearing when the Court raised the necessity for a two-day hearing, again Ms Sivwright made no objection to cross-examination or application for directions to prevent or limit it. In these circumstances, requiring Dr Blumberg to attend for and cross-examining him on his affidavit evidence was not unreasonable in the relevant sense.

Is the context of the proceedings as a whole a relevant consideration? 23 While I do not accept that Ms Sivwright's conduct that resulted in an adverse costs order being made against her provides any relevant context for the question of whether the impugned acts of St Ives were 'unreasonable', the parties' conduct of the proceedings as a whole was a factor that contributed to the length and complexity of the final hearing. Accordingly, it would be unfair to attribute responsibility for the length and complexity of the final hearing solely or predominantly to St Ives. 24 All other respondents were, in effect, content to ride on St Ives' coattails in defence of Ms Sivwright's application. All other respondents submitted that Ms Sivwright's claims were not reasonably arguable and, in substance, adopted or endorsed St Ives' submissions with respect to Ms Sivwright's claim that Mr Heath's sexual advances were 'unwelcome'. At the case management hearing for listing the application for final hearing all other respondents indicated that they intended cross-examining Dr Blumberg, but, depending on the nature of St Ives' cross-examination, they may not need to do so and agreed that a two-day hearing was necessary. At a subsequent case management hearing, the necessity for a two-day hearing was confirmed by all respondents. Again, all other respondents joined in St Ives' submissions regarding delay and Ms Sivwright's explanation for it and relied, in part, on St Ives' cross-examination of Dr Blumberg. Thus, the other respondents' submissions strongly suggest that, if St Ives had not undertaken its defence of the application in the way in which it did, the other respondents would have done so. Accordingly, while all other respondents except Mr Heath were successful in having the application dismissed against them on different grounds, all other respondents must bear the same or almost the same responsibility for the manner in which the merits of Ms Sivwright's claims were put in issue and for the cross-examination of Dr Blumberg on the issue of delay. 25 It follows that Ms Sivwright has adopted an inconsistent approach to costs in that she asserts that St Ives acted unreasonably and yet evidently accepts that Mr Heath acted reasonably for essentially adopting and relying upon the same acts. Further, regarding the cross-examination of Dr Blumberg, as has already been mentioned, Ms Sivwright made no opposition to that cross-examination and made no application by which she sought to prevent or limit it. To suggest after the fact that the cross-examination was unnecessary (because it was largely ineffective) does not bespeak unreasonableness in the relevant sense. Moreover, Ms Sivwright also contributed to the length of the hearing by failing to take any steps to attempt preventing, limiting or curtailing the cross-examination. 26 The collective alignment of the other respondents with St Ives' conduct of its defence, Ms Sivwright's inconsistent position with respect to St Ives and Mr Heath and Ms Sivwright's failure to take timely action to avoid the asserted 'unnecessary' cross-examination, serve to fortify me in the view that the impugned acts of St Ives were not unreasonable in the relevant sense. Further, having regard to these matters, to the purpose of s 570 and the mixed success of Ms Sivwright in the proceeding, even if I had been satisfied that the s 570(2)(b) threshold had been crossed, I would have exercised the discretion so as to make no order as to the costs of the proceeding as against St Ives. Therefore, to that extent, the parties' conduct of the proceedings as a whole is a relevant consideration as it provides context within which to assess the reasonableness of the impugned acts and, otherwise, would have informed the exercise of the discretion to order costs if the preconditions in s 570(2)(b) had been met.

Disposition 27 The impugned acts of St Ives were not unreasonable within the meaning of s 570(2)(b) of the Fair Work Act. Accordingly, there will be no order as to Ms Sivwright's costs of the proceeding as against St Ives. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Feutrill.

SCHEDULE OF PARTIES WAD 244 of 2020 Respondents Fourth Respondent: BRUCE ROSS-ADAMS Fifth Respondent: TRACY ROWLING