FEDERAL COURT OF AUSTRALIA

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (No 2) [2015] FCAFC 166

THE COURT ORDERS THAT:

1.    The first respondent’s application for costs be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

the court

1    On 28 August 2015 we dismissed an application for judicial review which had been made by the applicant (“the Union”): see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 (“the principal judgment”). The Union had sought a writ of certiorari quashing a decision of a Full Bench of the Fair Work Commission (“the Commission”) in an appeal brought by the first respondent (“ALS”) and a writ of mandamus directing the Commission to hear and determine the appeal in accordance with law.

2    We also ordered that, if any party sought an order for costs, any such application should be made within 14 days, supported by written submissions.

3    ALS has applied to the Court for an order that the Union pay its costs of the application. The Union has opposed the application and submitted that it should be dismissed.

4    Section 43 of the Federal Court of Australia Act 1976 (Cth) (“the Act”) confers on the Court a broad discretion to award costs in proceedings brought before it. That power is, however, constrained by s 570 of the Fair Work Act 2009 (Cth) (“the FW Act”). Section 570 relevantly provides that:

“(1)    A party to proceedings (including an appeal) in a court … 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) …

(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 [Commission];

(ii)    the matter arose from the same facts as the proceedings.”

5    ALS contended that s 570(1) of the FW Act did not apply to the application which was considered by the Court. Alternatively, it submitted that it should have its costs of one of the grounds on which the Union had relied without success. ALS did not seek to suggest that any of the exceptions, provided for in s 570(2), operated to displace the limitation imposed by s 570(1).

6    ALS’s principal submission was that the proceedings before the Commission, both at first instance and on appeal to the Full Bench, “were by way of private arbitration and were not an exercise of [the Commission’s] public law functions under the FW Act.” As a result, it submitted, the award made by the Commission, which was the subject of the appeal to the Full Bench, “did not involve the exercise of government powers and was not subject to judicial review.”

7    The alternative argument sought to distinguish between two grounds which had been relied on by the Union in its application. The first of those grounds, (referred to in our principal judgment as “the context ground”) was that the Full Bench had failed to consider the context in which the relevant enterprise agreement had been made when construing it. The second ground (referred to by us as “the obligation ground”) was that the Full Bench had breached the obligation, imposed on it by s 577(d) of the FW Act, to promote harmonious and cooperative workplace relations. ALS submitted that, even if s 570 applied in relation to the obligation ground it did not apply to the context ground. This was because the Full Bench was exercising powers of arbitration and because the considerations which it had allegedly failed to take into account were not considerations to which the FW Act required it to have regard. As a result, ALS claimed to be entitled to its costs of resisting the context ground.

8    Both submissions must be rejected.

9    The Court had power to entertain the Union’s application pursuant to both s 39B of the Judiciary Act 1903 (Cth) and s 562 of the FW Act. The jurisdiction arose under s 39B because the proceeding was one in which a writ of mandamus was sought against an officer of the Commonwealth. It had jurisdiction under s 562 because the proceeding related to a matter arising under the FW Act.

10    In the context of s 570(1) of the FW Act it has been held that the word “matter” refers to claims or causes of action or the underlying controversies which are raised in a proceeding: see Melbourne Stadiums Limited v Sautner (2015) 229 FCR 221 at 253-4. The word is used, in our view, in a similar sense in s 562 of the FW Act.

11    The question then is whether the proceeding, commenced in the original jurisdiction of this Court by the Union, was one that can be said to be “in relation to” such a matter. The phrase is one of broad connection that requires a “relevant relationship, having regard to the scope of the Act” in which it appears: see O’Grady v Northern Queensland Company Limited (1990) 169 CLR 356 at 367 (Dawson J). “Ordinarily”, as White J held in Stanley v Service to Youth Council Inc (No 3) (2014) 225 FCR 357 at 363, “the requisite degree of connection in the context of s 570 will be satisfied when an applicant seeks to enforce an entitlement for which the FW Act provides.”

12    Section 570(1), in its present form, commenced operation on 1 January 2013. The words “in relation to a matter arising under this Act” replaced the words “exercising jurisdiction under this Act”. The explanatory memorandum for the amending bill said that the “amendment confirms that the FW Act is generally a ‘no costs’ jurisdiction (including in appeal proceedings).” This change broadened the limitation on the Court’s power to award costs in proceedings under the FW Act. The result was, as White J held in Stanley at 363:

“Courts’ powers with respect to costs are limited not just in proceedings ‘in a matter’ arising under the FW Act, but in proceedings ‘in relation to a matter’ arising under that Act.”

13    In the principal judgment at [58] we held that the first instance decision of the Commission was a consent arbitration relating to the construction of the enterprise agreement which regulated the employment by ALS of some of its workers. We concluded that the agreement provided for an appeal to a Full Bench under s 604 of the FW Act. Such an appeal was, itself, in the nature of an arbitration. ALS’s appeal to the Full Bench was pursued under the agreement and in accordance with s 604. ALS’s appeal to the Full Bench expressly invoked s 604. The Union’s application to this Court sought a writ of mandamus to direct the Commission to “hear and determine, in accordance with the law, [ALS’s] appeal under [s] 604 …”. At [70]-[71] we identified a series of powers and functions conferred on the Commission by various sections of the FW Act which we considered were, or might be, available to it when conducting private arbitrations.

14    One of the grounds relied on by the Union, in seeking to impugn the Full Bench’s decision, was that the Full Bench had failed to comply with what was said to be its obligation to promote harmonious and cooperative workplace relations. The source of that obligation was identified as s 577(d) of the FW Act.

15    In our view there exists a relevant and sufficient connection between the judicial review proceeding and matters arising under the FW Act to engage s 570(1).

16    Even if an applicant makes claims in a proceeding which are founded on common law or other statutory causes of action, the proceeding remains one in relation to a matter arising under the FW Act provided that at least one of its claims arises under that Act: see Sautner at 252-4. For this reason ALS’s alternative argument must also fail even if it be accepted, for the purposes of argument, that the context ground did not so arise. The obligation ground plainly arose under the FW Act.

17    ALS’s application for costs should be dismissed.

Associate:

Dated:    20 November 2015