Sunbuild Pty Ltd v Ramsay

REASONS FOR JUDGMENT 1 On 31 March 2014, I refused the applicant leave to appeal from the answers given to two separate questions heard and determined in relation to the construction and application of the Fair Work Act 2009 (Cth) (FW Act) by a Judge of the Court (in which the applicant was the respondent): see Sunbuild Pty Ltd v Ramsay [2014] FCA 308 (the leave to appeal decision) and Ramsay v Sunbuild Pty Ltd [2014] FCA 54 (the primary decision). The question of costs of the application for leave to appeal was reserved. 2 I made orders that the question of costs be heard on the papers. The exchange of the written material has now been completed. This judgment deals with that outstanding costs issue. 3 The respondent to the application seeks costs of the application. For the reasons that follow, I refuse the respondent's application for costs. 4 Section 43 of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) confers power to the Court to award costs. The Court has a wide discretion but is required to exercise its power judicially and in accordance with established principles. 5 In this case, the general principle that costs would follow the event in the absence of special circumstances justifying some other order is modified by s 570 of the FW Act which provides: (1) A party to the 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 to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 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 costs; or (c) the court is satisfied of both the following: (i) the party unreasonably refused to participate in a matter before the FWA; (ii) the matter arose from the same facts as the proceedings. 6 The relevant principles was summarised in Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23 (AWU), where the Full Court observed at [6]-[8]: [6] The basis of the respondents' application is that the Court would be satisfied that the AWU instituted the proceedings "without reasonable cause". The question, then, is what is meant by a want of reasonable cause. [7] In Khiani v Australian Bureau of Statistics [2011] FCAFC 109 ("Khiani") the Full Court endorsed the summary of the authorities provided by Reeves J in Nimmo, in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728 at [27]- [30]. In our view the authorities establish the following principles: (1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents' costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause. (2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Spotless Services Australia Limited v The Hon Senior Deputy President Jeanette Marsh [2004] FCAFC 155 ("Spotless") at [12]-[13] (to the extent that the Full Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 ("Kangan") held otherwise, we would respectfully disagree). (3) The relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed: R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J; Kangan at [60]. In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-5 (approved in Kangan) Wilcox J said If success depends on the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding, as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. [8] We would emphasise, however, that these principles relate to the question of whether the jurisdiction to award costs is enlivened. Even if the Court has jurisdiction to make a costs order, it retains the discretion to refrain from exercising it in an appropriate case.