Zhao v TTS & Associates Pty Ltd

Unreasonable act or omission 5 By its written submission concerning costs, the respondent asserts that it offered to resolve the underlying dispute about the termination of the applicant's employment by paying her $18,750.00. That offer was made on 31 August 2018 during a conciliation conference in the Fair Work Commission and was later reiterated in writing by correspondence dated 7 September 2018. The respondent says that the applicant countered that offer by demanding $450,000.00. Later, after the Federal Circuit Court dismissed the applicant's application in that court (and a subsequent application to set aside that dismissal), the applicant reduced her offer to $70,000.00. The respondent contends that the applicant acted unreasonably, and in a manner that caused it to incur costs herein, by "…fail[ing] to accept the offer of compromise [that it] put forward…or, at the very least, [by failing to] construct a counteroffer that was proximate to an outcome she could reasonably achieve should she be successful…" 6 Respectfully, those submissions are misconceived. The only offers that the respondent appears to have made were made well before the application for leave to appeal was filed in this court. The respondent cannot be understood to have made any offer to resolve that proceeding, the rejection of which might be impugned as unreasonable. The applicant's rejection of an offer that was last made in August and September of 2018 cannot amount to an unreasonable act or omission that has occasioned the incurring of costs in a proceeding commenced more than 18 months later. The position might have been different had the respondent offered to settle the application for leave to appeal on the same basis that it offered to settle the broader dispute in September of 2018: see, for example: PIA Mortgage Services Pty Ltd v King (No 2) [2020] FCAFC 53, [20] (Rangiah, Charlesworth and Snaden JJ); Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221, 255 [166] (Tracey, Gilmour, Jagot and Beach JJ, with whom White J agreed on that issue). There is no evidence that that occurred here. 7 More to the point, the applicant's most recent offer of compromise - $70,000.00 - is not obviously excessive having regard to the nature of the claim that she sought to ventilate. Even assuming that a failure on her part to put a counter offer "…that was proximate to an outcome she could reasonably achieve" might amount to an unreasonable act or omission - a proposition that, respectfully, is by no means clear - I do not accept that the applicant should fairly be thought to have failed in that regard. For equivalent reasons, it was not unreasonable - even though, with the benefit of hindsight, it was inadvisable - for the applicant to reject the offer that was made in August and September of 2018. The respondent's offer was not so plainly attractive that the only course reasonably open to the applicant was to accept it. 8 There was no unreasonable act or omission on the applicant's part that led the respondent to incur costs that it should herein be permitted to recover under s 570(2) of the FW Act.

Existence of reasonable cause 9 The respondent submits that the applicant's application for leave to appeal was instituted without reasonable cause. Respectfully, I do not accept that submission. A matter will not be devoid of reasonable cause merely because it fails. In Baker v Patrick Projects Pty Ltd (No 2) (2014) 145 ALD 548 (Dowsett, Tracey and Katzmann JJ), a Full Court of this Court endorsed (at [9]) what was said about the application of s 570(2)(a) of the FW Act in Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 (Pagone J). There, Pagone J said (at [8]) that: …[t]o exercise the discretion conferred by [s 570(2)(a) of the FW Act] the Court must be satisfied that the claims were, relevantly, instituted without reasonable cause. That is not established merely because a party fails in the claims: R v Moore; ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470, 473. The relevant provisions reflect 'a policy of protecting a party instituting proceedings from liability for costs' and costs will rarely be awarded unless justified by exceptional circumstances: see Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]. In Kangan Batman Institute it was said by the Full Court at [60] that 'a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure'. In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Wilcox J indicated at 264 that one way of testing whether a proceeding was instituted 'without reasonable cause' was to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no 'substantial prospect of success'. His Honour went on to say that a proceeding lacks a reasonable cause where it is clear that it must fail on the applicant's own version of the facts. 10 The Full Court in Baker identified some "minor modification[s]" of the test when applied to appeals and judicial review proceedings. At [10], the Court observed that: …[i]n such proceedings the focus changes to whether, having regard to the facts apparent to the appellant at the time of instituting the appeal or the application for judicial review, there were no reasonable prospects of success. In evaluating these prospects regard may be had to the reasons for judgment or decision under appeal or review, as the case may be, and the grounds relied on to challenge the judgment or decision: see Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257 (Wilcox CJ). 11 The judgment from which the applicant sought leave to appeal involved the exercise of a judicial discretion (namely, to refuse to set aside an earlier order dismissing an application in default of appearance). In order that she might have a prospect of overturning it on appeal, the applicant needed to demonstrate that the court's discretion miscarried in any one or more of the ways famously outlined by the High Court in House v R (1936) 55 CLR 499, 504-505 (Dixon, Evatt and McTiernan JJ). That is precisely what she sought to do. 12 Although there was a degree of ambition to at least some of her submissions concerning the existence of House v R-type error, I do not accept that all of them were so hopeless that the respondent might clear the very high hurdle established by s 570(2)(a) of the FW Act. For example, insofar as concerned the applicant's contentions about the prejudice that the reinstatement of her application in the Federal Circuit Court would visit upon the respondent, I considered that the applicant had "little, if any, prospect" of establishing error in a House v R sense. I came to a similar conclusion in respect of the contentions that she advanced about her culpability for having not attended the hearing that took place before the Federal Circuit Court on 25 February 2019 (in consequence of which her proceeding before that court was initially dismissed). To succeed presently, the respondent would need to show that the applicant had no such prospects (or no such reasonable prospects), such that her application for leave to appeal had, by necessity, to fail. That is not what I found, nor a submission that I would accept. 13 Likewise, I would not accept the submission - if it is made - that the application for leave to appeal was commenced vexatiously. By its written submissions, the respondent observed that "…it could be argued that the leave to appeal [application], if anything, was instituted vexatiously by an applicant simply not happy with the decision made by the FCCA". If that should be understood as a submission that the application for leave to appeal was instituted vexatiously, I do not accept it. The applicant was plainly unhappy with the Federal Circuit Court's refusal to set aside its earlier decision to dismiss her proceeding, as of course she would be. That is not nearly sufficient to establish that her application for leave to appeal from that judgment should be impugned as vexatious: that is, as a mechanism for vexing the respondent, or for achieving some improper purpose not sufficiently connected to the vindication of what the applicant considered were her legal rights. 14 The application for leave to appeal was not instituted vexatiously or without reasonable cause.

Conclusion 15 The respondent has not established that the present circumstances enliven any of the exceptions to the prohibition against the awarding of costs for which s 570(1) of the FW Act provides. There shall be no order as to costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Snaden.