Woods v T & F.S. Woods Pty Ltd

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

1. The proceeding in this matter commenced upon the filing by the applicant of an Originating Application and a Statement of Claim on 2 December 2020. The final orders sought by the applicant in its application were as follows:

1. Declarations that the Respondent has contravened:

(a) sections 44, 45 and 90 of the Fair Work Act 2009 (Cth) (FW Act) by failing to pay the Applicant upon termination of his employment amounts owing for annual leave accrued and not taken and leave loading in accordance with clause 23 of the Road Transport (Long Distance Operations) Award 2010 (Award) and clause 29 of the Road Transport and Distribution Award 2010 (Local Award);

(b) s 45 of the FW Act by failing to pay the Applicant wages in accordance with clause 13 of Award and clause 15 of the Local Award;

(c) s 45 of the FW Act by failing to pay the Applicant allowances in accordance with clause 14 of the Award and clause 16 of the Local Award;

(d) s 45 of the FW Act by failing to pay the Applicant overtime in accordance with clause 27 of the Local Award;

(e) s 45 of the FW Act by failing to pay superannuation in accordance with clause 19.2 of the Award and clause 21.2 of the Local Award.

1. An order under s 545 of the FW Act for compensation for loss suffered by the Applicant because of the contraventions;

2. An order that the Respondent pay the Applicant's outstanding long service leave under s 4 of the Long Service Leave Act 1955 (NSW);

3. A declaration that the Applicant is entitled to possession of the property particularised herein (property);

4. An order that the Respondent deliver up the said property to the applicant at such time and place as the Court may direct;

6. Alternatively, damages for conversion in the amount of $12,000.00 ex GST;

7. Payment of damages in the sum of $16,140.27 ex GST for breach of Deed;

8. Interest;

9. Such further orders as the Court considers appropriate.

1. The respondent company carried on a trucking business in Moree in the State of New South Wales.
2. On 29 July 2024, the applicant filed a Notice of Discontinuance in respect of the entirety of his claim against the respondent.
3. Rule 13.02 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 relevantly provided as follows:

(1) If a party discontinues an application, or part of an application, another party to the proceeding may apply for costs.

(2) Unless the Court or a Registrar directs otherwise, an application for costs must be made by a party within 28 days after service on the party of the notice of discontinuance.

(3) ...

1. On 23 August 2024, the respondent's lawyers filed an interlocutory application for costs, within time, seeking the following orders:
   1. Pursuant to clause 4 of the Deed of Settlement and Release dated 27 November 2019, the Applicant pay the Respondent's costs of and incidental to the substantive application (commenced 2 December 2020) on an indemnity basis.
   2. Further, and in the alternative, pursuant to section 570(2)(a) of the Fair Work Act 2009 (Cth), the Applicant pay the Respondent's costs of and incidental to the substantive application (commenced 2 December 2020) on an indemnity basis, or in the alternative, on any basis the Court considers appropriate.
   3. Further, and in the alternative, pursuant to section 570(2)(b) of the Fair Work Act 2009 (Cth), the Applicant pay the Respondent's costs incurred by the unreasonable act(s) or omission(s) of the Applicant on an indemnity basis, or in the alternative, on any basis the Court considers appropriate.
   4. Further, pursuant to section 570(2)(b) of the Fair Work Act 2009 (Cth), the Applicant pay the Respondent's costs of and incidental to this Application in a Proceeding (commenced 23 August 2024) on an indemnity basis, or in the alternative, on any basis the Court considers appropriate.
2. It is not without significance that between the time of the filing of the Originating Application and the time of the filing of the Notice of Discontinuance:

a) The applicant had filed 41 documents; and > > b) The respondent had filed 39 documents; and > > c) The proceeding had been on foot for a period of 3 years and 7 months before the filing of the Notice of Discontinuance.

Claim Pursuant to Clause 4 of the Deed of Settlement and Release (the Deed) dated 27 November 2014

1. On 19 July 2019, the applicant commenced proceedings in the Federal Court of Australia (the FCA proceedings) in the name of T & F.S. Woods Pty Ltd (TFS) alleging breach of director's duties on behalf of his brother in respect of the business operation of TFS.
2. On 27 November 2019, the FCA proceedings were settled, and the Deed was executed on that date.
3. The parties as recorded in the Deed, and the Deed's preamble under the heading "Background", were as follows:

PARTIES

• DAVID WOODS of c/- Macpherson Kelley, Level 16, 324 Queen Street, Brisbane, Queensland (First Plaintiff or David)
• T & F.S. WOODS PTY LTD ACN 055 880 496 of c/- Macpherson Kelley, Level 16, 324 Queen Street, Brisbane, Queensland (Second Plaintiff or TFS)
• WOODS TRANSPORT PTY LTD ACN 128 567 171 of c/- Macpherson Kelley, Level 16, 324 Queen Street, Brisbane, Queensland (Woods Transport)
• ALLAN JOSEPH WOODS of c/- Rhodes Kildea, 33 Heber Street, Moree, New South Wales (First Defendant or Allan)
• JULIEANNE WOODS of of c/- Swan & Associates, Suite 1, 161 Balo Street, Moree, New South Wales, (Second Defendant or Julie)

BACKGROUND

A. David and Allan are currently directors of TFS.

1. Julie is a former director of TFS and a current employee. Allan and Julie are husband and wife.

2. David and Allan are shareholders of TFS, holding 10 ordinary shares each (14%).

3. The Estate holds the balance of the shares in TFS comprising of 10 ordinary shares and 40 class A shares on trust pursuant to the will of Terence Woods, Allan and David's deceased father. Allan and David dispute the will which is subject to proceedings filed in the Supreme Court of NSW under proceeding number 2019/00305500.

E. TFS conducts the business of a transport and logistics company in Moree.

1. The Parties are in dispute. The various documents filed in the Federal Court of Australia under proceeding number QUD441119 set out the nature of the dispute (the Proceedings).
2. The Parties wish to settle all disputes between them arising out of the issues of the Proceedings and all disputes that have or may have arisen as a consequence of the entire dealings between Allan and David as directors and shareholders of TFS, and Julie as director and employee of TFS, howsoever arising (the Disputes).
3. The Parties have reached an agreement in the terms set out in the operative part of this Deed.

1. The applicant and his brother, Allan Woods, were directors of Woods Transport Pty Ltd. They and the other parties were each in dispute concerning:

a) The respective distributions to which David, Allan and Julieanne Woods were entitled to the assets in the estate of the late Terence Woods who was the father of David and Allan. > > b) The control and management of the company TFS and Woods Transport Pty Ltd as documented in Federal Court proceedings no. QUD441/19.

2. The Deed was expressed, inter alia, to set out the terms of settlement of all disputes between Allan and David as directors and shareholders of TFS, and Julieanne as a director and employee of TFS, " ... howsoever arising".
3. On 2 December 2020, some 3 days after the making of the final settlement payment to the applicant under the terms of the Deed, the applicant commenced the subject proceeding. The applicant's claims related to his alleged underpayment by TFS under the Fair Work Act 2009 (the FWA) legislative provisions, the wrongful retention of certain property, and the ineffectual transfer to the applicant of certain assets referred to in the Deed.
4. The applicant's filed claims in this proceeding were clearly made by the applicant on the basis that the terms of the Deed did not constitute a bar to the bringing of the proceeding.
5. The respondent made a relatively early offer to settle the subject proceedings on 5 July 2021 by payment to the applicant of the sum of $50,000.00, though such offer was extended to operate in respect of persons/entities other than the parties to the proceeding, a factor which the Court holds as rendering inoperable such offer for cost consideration purposes. [1] That offer was not accepted.
6. On 20 September 2021, the respondent filed an application seeking summary dismissal of the proceeding on the basis that the terms of the Deed barred the commencement of the proceeding.
7. On 13 December 2021, a hearing of that interlocutory application took place before His Honour Judge Vasta who, one week later, granted the respondent's application for dismissal.
8. The applicant appealed Judge Vasta's decision, and on 18 September 2023, Justice Thomas allowed the applicant's appeal. In the judgment of Thomas J at [55] - [87] it was held as follows: [2]

Matters relevant to assessment of prospects of success

1. It is a well-accepted rule of construction that general words in a release are confined to the matters raised in the recitals: Grant v John Grant & Sons Proprietary Limited [1954] HCA 23; (1954) 91 CLR 112 (Grant) at 123 (per Dixon CJ, Fullagar, Kitto and Taylor JJ)). Clause 1.2 of the Deed is also to this general effect.

2. The core principle that governs the interpretation of any agreement is that the meaning of the terms are to be determined by what a reasonable person would have understood them to mean: Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] (per French CJ, Hayne, Crennan and Kiefel JJ); Toll (FCGT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165; [2004] HCA 52 at [40] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); and Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451; [2004] HCA 35 at [22] (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).

58. This process involves a consideration of the whole of the agreement.

1. The scope of the release in cl 3.1 of the Deed is confined to "Claims", as defined. Whilst the definition of "Claims" is described in broad terms, for example, claim, charge, complaint and so on, it is limited by the words "arising from the Proceedings".
2. It follows that DW is only barred from commencing claims which arise from the FCA proceeding. The coverage of the Deed therefore turned on whether the claims were ones "arising from" the FCA proceeding.
3. DW submitted that, on the proper construction of the Deed, the expression "arising from the Proceedings" requires that the claims made by DW result, or proceed or originate from, or out of, and thus "arise from", the FCA proceeding. In this way, it was submitted that a causal relationship is required.
4. Applying this construction, DW asserted that the primary judge ought to have concluded that the claims in the FCC proceeding are not "Claims" as defined in the Deed, because there is an insufficient nexus between them and the FCA proceeding.
5. This is a reasonable argument which supports the conclusion that DW's claims were not clearly barred by the Deed.
6. The expression "arising from" or "arising out of", in an ordinary context, is usually given a wide meaning: Walker v University of Sydney [2013] NSWSC 104 at [33] (per Harrison J), citing Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd [1996] NSWSC 104; (1996) 39 NSWLR 160 at 165; and Shepherds Producers Co-operative Ltd v John Scott Lamont & Ors [2009] NSWSC 294 at [13]- [19].
7. It has been said that the words "arising from" or "arising out of" require some form of causal or consequential relationship, although the relationship is less than that required by words such as "caused by" or "as a result of": Butler v St John of God Health Care Inc [2008] WASCA 174 at [39] (per Newnes AJA, with whom McLure JA and Buss JA agreed).
8. The definition of "arise" offered by the (8th ed, Macquarie Dictionary Publishers, 2020) Vol 1, 75 includes: "to result or proceed from." Definitions offered by the (2nd ed, Oxford University Press, 1989) Vol 1, 629 include "to spring up ... into existence".

Context will almost always tell one more about the objectively intended reach of such phrases than textual comparison of words of a general relational character. None of the phrases is linguistically stable or fixed.

1. As mentioned above, the primary judge found that the FCA proceeding was one involving an unconstrained inquiry into the day-to-day operations of the business of TFS: Woods at [33]. The primary judge considered that:

(a) given "the way that the Deed has been executed", it would be an "absurdity" if any litigation that AW may wish to instigate against Woods Transport Pty Ltd would not be barred by the Deed because it would not arise from an allegation of misappropriation by AW of money owned by TFS: Woods at [34]; and

(b) the parties intended to never "darken each other's doorstep again": Woods at [32].

1. Whilst no evidence was referred to, these appear to be findings of fact. The reference to the "way" seems to be referring to the circumstances in which the Deed was executed. No reasons are provided in support of these conclusions.

70. DW submitted that this was a mischaracterisation of the FCA proceeding.

1. The relief sought in the FCA proceeding dealt largely with an allegation that AW and JW knowingly misappropriated funds owned by TFS. Orders were sought that a firm be appointed to investigate the financial affairs of TFS; that AW and JW be ordered to pay damages; or, alternatively, that an order be made that TFS be wound up and liquidators appointed.
2. There is a reasonable argument that the FCA proceeding was confined to the alleged misappropriation of company funds, alleged breaches of fiduciary and director's duties, and whether TFS should be wound up, as set out on the face of the proceedings.
3. The claims in the FCC proceeding are personal claims by DW against TFS in respect of three distinct matters:

(a) breaches of the FWA by TFS;

(b) wrongful detention of property; and

(c) damages for breach of the Deed.

74. It was argued that none of these matters was raised in the FCA proceeding.

1. The claims made under the FWA and as to property, and damages for breach of the Deed, have some connection with the parties to the Deed, but it is arguably not clear that they arise from the FCA proceeding and thus fall within the release.

2. The primary judge pointed to the fact that, in the documents filed in the FCA proceeding, DW requested documents relating to "all payments made by [TFS] ... to any person with the surname Woods" and wage records. It is not known why this request was made. Evidence would need to be called about this issue. It could have been for the purpose of proving the alleged misappropriation and breaches of duty. In any event, there is a reasonable argument that the making of such a request does not, of itself, necessarily expand the scope of the proceeding. It is arguable that it would not make TFS' compliance with the FWA an issue in the FCA proceeding.

3. No relief was sought against TFS in relation to the FWA in the FCA proceeding. Such relief was not necessarily associated with the matters in issue in the FCA proceeding. Characterising the FCA proceeding as one which included claims relating to employee entitlements under the FWA arguably overlooks the parties to the proceeding: DW (in his capacity as director and shareholder) and TFS being the plaintiffs, and AW and JW being the defendants.

4. Based on such considerations, there was at least an arguable claim that the Deed did not bar the FCC proceeding.

5. It was submitted before the primary judge that the parties could have, but did not, utilise wider language when drafting the release. It is generally accepted that words such as "relating to" or "in any way connected with" have a broader compass than "arising from". The subject of the release could also have been expressed in other ways. For example, the release could have released claims in any way connected with the business, or the relationship between the parties, and not made referable to the FCA proceeding.

6. It was also submitted below that, if the parties had intended to surrender any rights or causes of action concerning DW and TFS' dealings as employee and employer, clear words would have been used. That is particularly the case where the parties have engaged solicitors to prepare the deed of release.

7. It is arguable that the interpretation advanced by DW is supported by the following language used in the recitals:

(a) in paragraphs A and C, DW and AW are described in their capacities of directors and shareholders of TFS;

(b) in contrast, in paragraph B, JW is described as an employee of TFS;

(c) in paragraph G, it is stated that the parties wish to settle all disputes between them arising out of the issues of the Proceedings and all disputes that have or may have arisen as a consequence of the entire dealings between AW and DW as directors and shareholders of TFS, and JW as director and employee of TFS.

1. It is arguable that the language used in the recitals tends to confine the ambit of the release to the parties in their capacities as directors and shareholders of TFS.

2. Recital G, in particular, describes the intention of the parties to settle all disputes between them:

(a) arising out of the issues of the Proceedings; and

(b) that have or may have arisen as a consequence of the entire dealings between AW and DW as directors and shareholders of TFS, and JW as director and employee of TFS.

1. It is arguable that this recital limits the release, insofar as DW is concerned, to the relationship "as directors and shareholders" in contrast to JW, where the intention is to encompass her role as employee.
2. As stated above, general words in a release will always be confined to the subject matter of the disputes stated in the recitals: Grant at 123.
3. In light of the above, it was, at the least, arguable that DW's claims in the FCC proceeding were not barred by the Deed. The primary judge erred in granting summary judgment and the appeal should be allowed.
4. Due to this conclusion, there is no need to consider DW's remaining grounds of appeal.

1. By order of Thomas J, the matter was remitted to this Court for hearing before a different Judge.
2. It was submitted on behalf of the respondent that the Deed covered any controversy which held its genesis from the running of the business of the respondent, regardless of the legal classification of any such dispute. [3] It was further submitted that the words in the Deed "or otherwise" included the allegations made by the applicant in the subject proceeding.
3. It was submitted on behalf of the applicant that the Deed expressed the terms of an agreement between the parties to the Deed in respect of the entire dealings between the applicant and his brother as directors and shareholders of TFS, and Julieanne as a director and employee of TFS howsoever arising. It was further submitted that the Deed related to those matters as raised in the FCA proceedings, such that matters not specifically addressed by the Deed were not barred. [4]
4. First, whether the applicant's claims in the Amended Statement of Claim filed on 8 February 2024 were valid or not cannot be tested because of the filing of the Notice of Discontinuance.
5. Second, as found by Thomas J, the applicant's claims were at least arguable. He allowed the appeal from the decision of His Honour Judge Vasta on that basis.
6. The Court is not satisfied that the terms of the Deed prevented the applicant from commencing the subject proceeding. The Court does not find that Clause 4 of the Deed was specific enough to bar the applicant from making the claims which he has in this proceeding. Had that been the intention of the parties at the time of the drafting of the Deed, one would have expected that that would have been made clear. That was not the case.
7. Further, the Court is not satisfied that the terms of the release in Clause 3.1 of the Deed were sufficiently certain to constitute a bar to the applicant making the claims he has in the subject proceeding. The claims made by the parties in the FCA proceedings were known to each party. The claims were pleaded. Why then would Clause 3.1 be so worded that the release was in respect of such claims " ... they might have had against each other in the Proceedings"? Were those words meant to refer to some claims other than those actually made in the FCA proceedings? In such circumstances, what utility are the words "or otherwise" when such words could conceivably be construed as being a reference to those claims which were actually made? At the least, the terms of Clause 3.1 are uncertain, and unenforceable.
8. As found by Allsop CJ, Besanko and O'Callaghan JJ in Hancock Prospecting Pty Ltd v Rinehart (2017) 257 FCR 442; [2017] FCAFC 170 at [193], the use of the words "or otherwise" must be looked at in context.
9. The Court finds that the terms of the Deed did not preclude the applicant from making the claims which he did.

The Claim Pursuant to s. 570(2)(a) of the FWA

1. Section 570 of the FWA relevantly provided as follows:

FAIR WORK ACT 2009 - SECT 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 [2009](https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa569A.

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.

1. For the reasons as advanced by Thomas J in his judgment on appeal, it could not be said that the claims made by the applicant were either vexatious or made without reasonable cause.
2. Because of the filing of the Notice of Discontinuance, those issues could never finally be tested. Hypothetical testing of the merits of the respective cases of the parties is inappropriate for the purpose of a Court making a considered judgment on the question of costs. [5] The fact that a determination as to the validity of the applicant's claims cannot now be made does not mean that the claims were either fanciful or whimsical. There was no evidence that the applicant believed that any of his claims were bound to fail.
3. The Court finds that the respondent has not made out its claim that the provisions of s. 570(2)(a) of the FWA had been met.

The Claim Pursuant to s. 570(2)(b) of the FWA

1. By order made on 6 February 2024, the matter was listed for final hearing on 25 October 2024, 28 October 2024 and 18 November 2024 to 21 November 2024 commencing at 9:45am on each listed hearing date in the Federal Circuit Court of Australia sitting at Brisbane.
2. The fixing of such trial dates was necessarily part of the Court's internal administration regime. The setting aside of such trial dates was done to ensure that the parties could appropriately instruct their lawyers and engage Counsel for what was listed to be a protracted period of time in Court.
3. The conduct of the parties to litigation is always relevant when considering the question of costs. In that regard, it is to be noted that notwithstanding that the applicant had by his lawyers on 20 October 2023 represented to the respondent's lawyers that the proceeding was ready for trial, [6] by order of the Court made on 6 February 2024, the applicant was granted leave to file an Amended Statement of Claim. The Amended Statement of Claim was filed on 8 February 2024. On 19 February 2024, the respondent filed its Amended Defence to the Amended Statement of Claim, as it was required to do.
4. Section 139 of the Federal Circuit and Family Court of Australia Act 2021 (the Act) was enacted for the purpose of making it clear that, where possible, all matters in controversy between the parties ought to be completely and finally determined, and that multiplicity of proceedings should be avoided. That section relevantly provided as follows:

"Section 139: Determination of matter completely and finally

In every matter before the Federal Circuit and Family Court of Australia (Division 2), the Court must grant, either:

(a) absolutely; or

(b) on such terms and conditions as the Court thinks just;

all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by a party in the matter, so that, as far as possible:

(c) all matters in controversy between the parties may be completely and finally determined; and

(d) all multiplicity of proceedings concerning any of those matter may be avoided. "

1. Section 139 of the Act, however, must be read in conjunction with ss. 190 and 191 of the Act which relevantly provided as follows:

Section 190: Overarching purpose of civil practice and procedure provisions

(1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:

(a) according to law; and

(b) as quickly, inexpensively and efficiently as possible.

Note 1: See also paragraphs 5(a) and (b).

Note 2: The Federal Circuit and Family Court of Australia (Division 2) must give effect to principles in the Family Law Act 1975 when exercising jurisdiction in relation to proceedings under that Act.

(2) Without limiting subsection (1), the overarching purpose includes the following objectives:

(a) the just determination of all proceedings before the Federal Circuit and Family Court of Australia (Division 2);

(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;

(c) the efficient disposal of the Court's overall caseload;

(d) the disposal of all proceedings in a timely manner;

(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.

(3) The civil practice and procedure provisions must be interpreted and applied, and any power conferred or duty imposed by them (including the power to make Rules of Court) must be exercised or carried out, in the way that best promotes the overarching purpose.

(4) The civil practice and procedure provisions are the following, so far as they apply in relation to civil proceedings:

(a) the Rules of Court;

(b) any other provision made by or under this Act or any other Act with respect to the practice and procedure of the Federal Circuit and Family Court of Australia (Division 2).

Section 191: Parties to act consistently with the overarching purpose

(1) The parties to a civil proceeding before the Federal Circuit and Family Court of Australia (Division 2) must conduct the proceeding (including negotiations for settlement of the dispute to which the proceeding relates) in a way that is consistent with the overarching purpose.

(2) A party's lawyer must, in the conduct of such a proceeding before the Federal Circuit and Family Court of Australia (Division 2) (including negotiations for settlement) on the party's behalf:

(a) take account of the duty imposed on the party by subsection (1); and

(b) assist the party to comply with the duty.

(3) The Federal Circuit and Family Court of Australia (Division 2) or a Judge may, for the purpose of enabling a party to comply with the duty imposed by subsection (1), require the party's lawyer to give the party an estimate of:

(a) the likely duration of the proceeding or part of the proceeding; and

(b) the likely amount of costs that the party will have to pay in connection with the proceeding or part of the proceeding, including:

(i) the costs that the lawyer will charge to the party; and

(ii) any other costs that the party will have to pay in the event that the party is unsuccessful in the proceeding or part of the proceeding. Note: Paragraph (b) - in relation to a family law or child support proceeding, the Federal Circuit and Family Court of Australia (Division 2) may make an order as to costs under section 149 of the Family Law Act 1975 if the Court is of the opinion that there are circumstances that justify it in doing so.

(4) In exercising the discretion to award costs in a civil proceeding, the Federal Circuit and Family Court of Australia (Division 2) or a Judge must take account of any failure to comply with the duty imposed by subsection (1) or (2).

(5) Without limiting the exercise of that discretion, the Federal Circuit and Family Court of Australia (Division 2) or a Judge may order a party's lawyer to bear costs personally.

(6) If the Federal Circuit and Family Court of Australia (Division 2) or a Judge orders a lawyer to bear costs personally because of a failure to comply with the duty imposed by subsection (2), the lawyer must not recover the costs from the lawyer's client."

1. The principles governing the conduct of proceedings in this Court, as set out in ss. 139, 190 and 191 of the Act, are relevant considerations when a Court considers whether or not to make a costs order under s. 570(2)(b) of the FWA. Were that not the case, a respondent to a costs application could illegitimately evade the overarching principles of the Act so as to achieve an unjust result in a costs context. The legislature could not have intended that that would be allowed to occur at the time of the enactment of s. 570(2)(b) of the FWA.
2. When a party commences a proceeding in this Court under provisions of the FWA, it is inferred that they do so with a resolution to bring their claim to a conclusion by and through the taking of steps as set out in the Rules of Court. The legislative scheme under the Act is that a party does so in accordance with the overarching principles of the Act. The filing by the applicant of a Notice of Discontinuance was an act devoid of a resolution on his part to have the issues in dispute in the proceeding finally determined by the Court.
3. Further, it is of significant note that after the filing of the Notice of Discontinuance, the applicant failed to personally swear to those issues raised against him by the respondent after the filing by the respondent of its costs application on 23 August 2024. The applicant's response was via his solicitor, namely by the filing of the affidavits of John-Anthony Hodgens. In his affidavit filed on 31 October 2024, at [56] - [58] inclusive, Mr Hodgens deposed as follows, on an information and belief basis, as to why the applicant had brought his proceeding to an end:
   1. I have been informed by Mr Dreyer and the Applicant and I believe, including from review of the file maintained by Macpherson Kelley, that the Applicant's decision to discontinue the proceedings was informed by the following matters.
   2. As at 29 July 2024, being the date which the notice of discontinuance was filed by the Applicant, the Applicant had incurred significant billed legal costs, including those associated with the Appeal. In circumstances where the relief claimed by the Applicant totalled $982,773.76, the Applicant formed the view that, even if he was wholly successful, there would not be a beneficial commercial outcome, because it would be likely that:
      1. he would incur further legal costs of at least $200,000 to progress the proceeding to trial;
      2. there was concern that the Respondent would appeal a decision in favour of the Applicant, which would incur additional legal costs; and

c. he would incur further costs of pursuing enforcement.

1. I am further informed by Mr Woods and verily believe it to be true that in or around May 2024, Mr Woods dissolved his relationship with Mary Hawker. Ms Hawker swore an affidavit on 16 April 2021, which was filed in this proceeding on 19 April 2021. The dissolution of that relationship significantly undermined his desire and resolve to pursue the proceeding, in addition to the anticipated additional cost and time to resolve the dispute.

1. Mr Hodgens did not depose as to why the applicant did not personally depose to the matters set out in [56] - [58] of Mr Hodgens' affidavit. Mr Hodgens did not depose that the applicant was either medically unfit to swear an affidavit, or that there was some other reason why the applicant had not personally deposed an affidavit going to the matters in issue. In such circumstances, the Court gives no weight to the evidence of Mr Hodgens at [56] - [58] of his affidavit. In such circumstances, the Court is left in the position of having no evidence of weight before it as to why the applicant discontinued his proceeding. The Court accordingly infers that the applicant had no good reason as to why he discontinued his proceeding. It may have been that the applicant did not depose an affidavit because he did not wish, at the hearing of the costs application, to be cross-examined on the matters put forward on his behalf by Mr Hodgens as justifying the filing on his behalf of a Notice of Discontinuance. It may have been that he was not prepared to swear on oath the reason why he decided to discontinue his proceeding. Either way, the actions and omissions of the applicant in that regard were contrary to the overarching principles and purpose of the Act contrary to the provisions of s. 190(1)(b), (2)(a) - (e), and s. 191(1) of the Act. Those acts and omissions constituted a failure on the part of the applicant to in any way justify his commencement, and early discontinuance, of the proceeding, and were unreasonable.
2. Having regard to the provisions of s. 191(4) of the Act, and s. 570(2)(b) of the FWA, the Court finds that it is satisfied that the applicant's failure to adduce any evidence on the question as to why a s. 570(2)(b) costs order ought not to be made against him justified a finding that for the whole of the proceeding the applicant unreasonably caused the respondent to incur costs in resisting the applicant's claims.
3. In the exercise of its discretion, the Court finds that the applicant ought to pay the respondent's costs of and incidental to the proceeding on a party/party basis, such costs to be as agreed, or failing agreement to be assessed.
4. And it is so ordered.

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Egan.

[1] See paragraph 5 of the letter from DWF Lawyers to Christian Dreyer of Macpherson Kelley Lawyers

dated 5 July 2021 being Annexure MTG-7 to the affidavit of Matthew Giles filed on 23 August 2024.

[2] Woods v T&F.S. Woods Pty Ltd [2023] FCA 1108.

[3] [49] of Amended Outline of Costs submissions filed on 13 December 2024.

[4] [52] - [53] of Applicant's written submissions filed on 24 January 2025.

[5] Fairfield Services Pty Ltd (in Liq) v Leggett [2020] QSC183 at [74] per Bond J.

[6] MTG-22 to the Giles affidavit filed on 23 August 2024.