Federal Court of Australia

Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia Pty Ltd (No 2) [2025] FCAFC 50

ORDERS

THE COURT ORDERS THAT:

1.    The appellants pay the respondent’s costs of and incidental to the appeal, to be agreed or taxed.

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

ORDERS

THE COURT ORDERS THAT:

1.    There be no order as to costs.

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

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    On 11 December 2024, the Full Court made orders in SAD 49 of 2024, dismissing the appeal brought by Tredders Investments Pty Ltd as trustee for the Warren Tredrea Trust and Warren Tredrea (Tredrea parties) against the orders of a judge of the Court: Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia Pty Ltd [2024] FCAFC 164 (Tredders (FC)) at [5]-[33]. The Full Court also made orders in SAD 66 of 2024, dismissing an application for leave to appeal brought by Channel 9 South Australia Pty Ltd (Channel 9) in relation to costs: Tredders (FC) at [34]-[50].

2    The parties have subsequently provided written submissions in relation to the costs of the two appeals on the basis that the Court would determine the issue of costs on the papers. The submissions proceed on the basis that the Tredrea parties’ appeal and Channel 9’s application for leave to appeal are proceedings to which s 17 of the Independent Contractors Act 2006 (Cth) (IC Act) applies.

3    The parties submit that, in relation to Channel 9’s application for leave to appeal, SAD 66 of 2024, there should be no order as to costs. We accept the parties’ joint position that the application for leave to appeal was advanced on arguable grounds and that, given that s 17 of the IC Act applies, the appropriate order is that there be no order as to costs in SAD 66 of 2024.

4    In relation to the Tredrea parties’ appeal, SAD 49 of 2024, Channel 9 submits that the Tredrea parties should be ordered to pay Channel 9’s costs of the appeal. The Tredrea parties submit that there should be no order as to costs. For the reasons that follow, we accept Channel 9’s submission and we will order that the Tredrea parties pay Channel 9’s costs of SAD 49 of 2024, on a party-party basis.

Relevant legal principles

5    The Tredrea parties’ appeal is a proceeding to which s 17 of the IC Act applies. Section 17 of the IC Act relevantly provides:

17 Costs only where proceeding instituted vexatiously

(1)     A party (the first party) to a proceeding (including an appeal) in a matter arising under this Part must not be ordered to pay costs incurred by any other party to the proceeding unless the first party instituted the proceeding vexatiously or without reasonable cause.

(2)     Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Part is satisfied that a party (the first party) to the proceeding has, by unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first party to pay some or all of those costs.

(3)     In this section:

costs includes all legal and professional costs and disbursements, and expenses of witnesses.

6    The principles concerning the application of s 17 of the IC Act were summarised by the primary judge in his Honour’s costs judgment, which was the subject of Channel 9’s application for leave to appeal in SAD 66 of 2024: Tredders Investments Pty Ltd as trustee for Warren Tredrea Trust v Channel 9 South Australia (No 4) [2024] FCA 453 (Tredders (No 4)) at [6]-[13], [18]-[19]. As was noted by the primary judge in Tredders (No 4) at [13], s 17(1) creates a default position that there should be no order as to the costs of the proceeding. However, as is also clear from the terms of s 17(1), this default may be displaced where a court is satisfied that a party has instituted the proceeding vexatiously or without reasonable cause. It is not submitted in this case that the Tredrea parties’ appeal was instituted vexatiously.

7    Section 17 of the IC Act is, for relevant purposes, to the same effect as s 570 of the Fair Work Act 2009 (Cth). In Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 (Baker) at [9]-[10], the Full Court (Dowsett, Tracey and Katzmann JJ) made observations concerning the phrase “without reasonable cause” in the context of an appeal under s 570 of the Fair Work Act. The Full Court observed (at [10]), citing Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257 (Wilcox J), that:

Th[e] test requires some minor modification when applied to the institution of an appeal or judicial review proceedings. In 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 ...

8    The fact that an appeal is dismissed, or that leave to appeal or to rely on particular grounds is refused, will not itself demonstrate that the appeal was instituted “without reasonable cause”: Australian Workers’ Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428; [2013] FCAFC 23 at 430 [7(3)] (Dowsett, McKerracher and Katzmann JJ). Ultimately, it is the words of the section that must be applied, and what constitutes “reasonable cause” must be assessed by reference to the nature of the particular proceedings instituted: Whitby v ZG Operations Australia Pty Ltd (No 2) [2019] FCA 201 at [9]-[10] (Thawley J).

The submissions of the parties

9    In relation to the application of s 17(1), Channel 9 submits that, having regard to the facts apparent to the Tredrea parties at the time of instituting the appeal, their appeal had no reasonable prospects of success. The arguments relied upon by Channel 9 in support of that submission are reflected in these reasons at [12]-[20] below.

10    The Tredrea parties submit that their appeal cannot be characterised as being unarguable or having minimal prospects of success. The fact that the Court determined that the appeal required leave and that such leave was refused, they submit, did not mean that the appeal was “unarguable”. They maintain that, even if their appeal were regarded as weak, it does not meet the threshold of having been instituted without reasonable cause within the meaning of s 17(1) of the IC Act. In this regard they refer to the Court’s reasons in the appeal judgment (at [18]-[33]) and submit that nothing in those reasons suggests that there was no reasonable cause for making what became, in effect, an application for leave to rely on their amended grounds of appeal.

11    In seeking its costs of the Tredrea parties’ appeal, Channel 9 submits, in the alternative to its submissions regarding s 17(1), that the failure of the Tredrea parties to accept an offer made to them on 19 June 2024 was an unreasonable act or omission enlivening the power to order costs under s 17(2) of the IC Act. Channel 9’s position is that, as at the date of its offer to the Tredrea parties, the untenability of the appeal was objectively apparent, and the offer was compelling, such that their failure to accept the offer was an unreasonable act which caused Channel 9 to incur costs in connection with the appeal for the purpose of s 17(2) of the IC Act. The Tredrea parties’ position is that the offer made to them by Channel 9 on 19 June 2024 did not represent a sufficient level of compromise, and that even if it did, Channel 9 would not have been entitled to its costs in any event given that s 17 of the IC Act applied to the appeal. They maintain that their failure to accept Channel 9’s offer was not therefore unreasonable.

The Tredrea parties instituted their appeal without reasonable cause

12    On 10 April 2024, the Tredrea parties instituted their appeal by filing a notice of appeal containing some 16 grounds of appeal. On 6 May 2024, they filed an application for an extension of time within which to file a supplementary notice of appeal, supported by an affidavit from their solicitor, stating that she had recently been instructed and was “in the process of preparing the relevant documentation and seeking advice from senior counsel regarding the appeal”. That application had not been determined when, on 5 June 2024, the Tredrea parties filed a supplementary notice of appeal. Orders were made on 14 June 2024 granting the Tredrea parties the necessary extension of time to amend the notice of appeal.

13    In the supplementary notice of appeal, most of the original 16 grounds of appeal were abandoned. Of the original grounds, only four grounds – grounds 1, 2 and 15, and an amended version of ground 5 – were maintained. The supplementary notice contained a further nine new grounds of appeal.

14    On 28 October 2024, the Tredrea parties filed written submissions in support of their appeal. Those submissions indicated that three of the four remaining original grounds of appeal (grounds 1, 2 and the substance of ground 15) were no longer pressed. The only original ground that was pressed was ground 5, which had been amended. It follows that, by the time of the filing of the Tredrea parties’ written submissions, none of the original 16 grounds was pursued in its original form and only one of those grounds was pressed at all.

15    If an appeal is initially commenced on grounds that do not enjoy reasonable prospects of success or are later abandoned, it will not necessarily follow that the appeal should be characterised as having been instituted without reasonable cause. In some cases, a party might later amend their grounds of appeal to include grounds that have merit, and it may become evident that the appeal could not be said, objectively, to have been instituted without reasonable cause, even though that may not have been apparent from the notice of appeal that was initially filed. In a case like that, it would not normally be appropriate to conclude that the appeal was instituted without reasonable cause. While the institution of an appeal on grounds that are destined to fail is one relevant consideration, it is also necessary to give consideration to the prospects of the appeal succeeding in light of the course of proceedings and the grounds ultimately relied upon.

16    In relation to the grounds included in the supplementary notice of appeal, four of the new grounds that had been introduced (grounds 5A, 5B.1, 5C.1 and 14A.3) were not pressed. Five of the grounds concerned with liability (grounds 1A, 1B, 5, 5B.2 and 5C.2) raised issues which had not been relied on by the Tredrea parties at trial. The remaining grounds would only arise if the Tredrea parties were successful on one or more of those grounds relating to liability.

17    At the hearing of the appeal, the Tredrea parties properly conceded that the issues raised by grounds 1A, 1B, 5, 5B.2 and 5C.2 had not been relied upon by them at trial. Leave to rely on the grounds was sought only in the course of oral argument. The Tredrea parties also correctly accepted that, in order to succeed on their appeal at all, they would need to succeed on at least one of the grounds that related to “new” issues, as well as at least one aspect of ground 14A.

18    Once it was accepted that leave was required in order to advance the critical grounds on which the Tredrea parties relied, it was, in our view, highly improbable, on any objective assessment, that leave would be granted to rely on the grounds raising new issues, or that the Tredrea parties’ appeal would be allowed. The reasons for that conclusion were explained in Tredders (FC), and included that:

(a)    the Tredrea parties’ case had been “entirely recast on the appeal with the benefit of the primary judge’s reasons” (Tredders (FC) at [21]);

(b)    the Tredrea parties advanced no evidence on the appeal as to why they had not taken issue at trial with Channel 9’s pleading in relation to the basis on which the primary judge found for Channel 9, and accepted that the Full Court should proceed on the basis that this had been a “forensic decision” (Tredders (FC) at [22], [24]);

(c)    the grounds sought to challenge reasons expressed by the primary judge for agreeing with aspects of Channel 9’s case which the Tredrea parties had not put in issue, and which were consequently not addressed by the submissions of the parties at trial, and Channel 9 would suffer prejudice if leave were granted to rely upon the grounds because it had not had the opportunity to make submissions at first instance in relation to those issues (Tredders (FC) at [23]);

(d)    the Tredrea parties had adduced no evidence and provided no explanation as to why they did not raise the issues at trial, in circumstances where they had had “ample, indeed generous, opportunity” to raise them yet failed to do so (Tredders (FC) at [27]);

(e)    the grounds relied upon were not strong or straightforward (Tredders (FC) at [28]);

(f)    some of the grounds of appeal would require the making of factual findings afresh (Tredders (FC) at [29]);

(g)    the grounds served no general public importance (Tredders (FC) at [30]); and

(h)    if leave to rely on the grounds were granted, Channel 9 would be denied a practical right of appeal (Tredders (FC) at [31]).

19    Having regard to the powerful reasons against permitting the Tredrea parties to rely on the grounds that raised new issues, if it is necessary to do so, we would characterise the Tredrea parties’ appeal as one which, objectively assessed, enjoyed “no substantial”, or “minimal”, prospects of success: cf Reeve v Ramsay Health Care Australia Pty Ltd (No 2) [2012] FCA 1322 at [10] (Barker J); Tredders (No 4) at [19].

20    There is necessarily an evaluative judgement to be made as to whether the threshold identified in s 17(1) of the IC Act – relevantly, “instituted … without reasonable cause” – is met. We have concluded that the Tredrea parties’ appeal was instituted without reasonable cause, having regard to the circumstances that:

(a)    only one of the 16 grounds on which the appeal was commenced was pressed;

(b)    it was obvious that grounds 1A, 1B, 5, 5B.2 and 5C.2 related to points that had not been advanced below;

(c)    the Tredrea parties had to succeed on at least one of those grounds in order for the appeal to succeed;

(d)    leave to raise those grounds was not sought until the hearing of the appeal;

(e)    no evidence and no explanation were advanced in support of the grant of leave to raise the new grounds, and consequently they were highly unlikely to succeed; and

(f)    there were powerful reasons not to allow the Tredrea parties to rely on the grounds relating to issues not run at trial, such that it was objectively highly improbable that the necessary leave would be granted, and the appeal did not enjoy reasonable prospects of success.

21    We are therefore satisfied that the power to award costs under s 17(1) of the IC Act is enlivened in this case. It is unnecessary to consider further Channel 9’s alternative submission that the Tredrea parties acted unreasonably in failing to accept Channel 9’s offer.

22    In considering the exercise of the costs discretion, we bear in mind (as a factor weighing against ordering the Tredrea parties to pay costs) the evident purpose of s 17 of the IC Act, namely “to establish a no-costs jurisdiction so that claims in an identified class … are not curtailed or discouraged by the threat of adverse costs orders”: Tredders (No 4) at [19]. However, having regard to the circumstances already identified above, as well as the fact that Channel 9 would be entitled to its costs if costs were to follow the event, and the fact that Channel 9 made a reasonable “walk away” offer to settle the appeal after the grounds in the supplementary notice of appeal were settled, we would exercise the discretion to order that the Tredrea parties pay Channel 9’s costs of the appeal on a party-party basis.

Conclusion

23    We will order that the Tredrea parties pay Channel 9’s costs of the Tredrea parties’ appeal, SAD 49 of 2024. In relation to Channel 9’s application for leave to appeal, SAD 66 of 2024, there will be no order as to costs.

Associate:

Dated:    11 April 2025