FEDERAL COURT OF AUSTRALIA

Reeve v Ramsay Health Care Australia Pty Ltd (No 2) [2012] FCA 1322

The Court orders that:

1.    The applicant pay the costs of and incidental to this proceeding including the costs of the summary judgment application, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

question of costs

1    On 21 November 2012 I made orders granting the summary judgment application of the first respondent and dismissing the originating application of the applicant in this proceeding: Reeve v Ramsay Health Care Australia Pty Ltd [2012] FCA 1294.

2    I then reserved the question of costs of the proceeding, having received oral submissions from the parties.

3    While the first respondent has been successful on its application for summary judgment, it accepts that the ordinary rules as to costs that apply in court proceedings, do not apply in this proceeding and that costs may only be awarded if the requirements of s 570 of the Fair Work Act 2009 (Cth) (the Act) are satisfied.

4    In this regard, the first respondent, as I understood it, accepted that the reasoning in Australasian Meat Industry Employees’ Union v Fair Work Australia (No 2) [2012] FCAFC 103; (2012) 203 FCR 430 applied in this case in respect of the originating application of the applicant for writs of certiorari and mandamus against Fair Work Australia (FWA) in that the remedies applied for were designed to vindicate her claimed right to a hearing of the extension of time application under the Act.

5    Section 570(1) of the Act provides, in effect, that in such a proceeding costs may be ordered by the Court only in accordance with subs (2) or s 569 or s 569A. The latter two provisions are not relevant but the first is.

6    Section 570(2) provides as follows:

(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 FWA;

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

7    The first respondent submits that on the material before the Court, the Court should order costs in this case because the matters about which the Court should be satisfied in subs (2)(a) and/or (b) have been made out.

8    Section 570(2)(a) empowers the Court to order costs if it is satisfied that the party instituted the proceedings “vexatiously or without reasonable cause”. Here, the first respondent does not press a claim that the proceedings were instituted vexatiously, but does submit they were instituted “without reasonable cause”.

9    The expression “without reasonable cause” is not defined in the Act. While I have found in the course of dealing with the summary judgment application that the applicant had no reasonable prospect of succeeding on the action, as that compendious phrase utilised in s 31A(2) of the Federal Court of Australia Act 1976 (Cth) is to be understood, the expression “without reasonable cause” as it is used in s 570(2)(a) is not identical with it. Nonetheless, there is commonality between the issues that would go to satisfying each expression.

10    It is now well accepted that one way of testing whether a proceeding is instituted “without reasonable cause”, for the purpose of a provision such as s 570, is to ask whether upon the facts apparent to the applicant at the time of instituting the proceeding, there were no substantial prospects of success. If success depends upon resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to say that the proceeding was instituted “without reasonable cause”. But where on the applicant’s own version of the facts it is clear the proceeding must fail, it may be said that it lacks a reasonable cause: see Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 (Kanan) at 264-265 (Wilcox J). In Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [51], the Court (Gray, Cowdroy & Reeves JJ) endorsed the dicta of Wilcox J in Kanan. Accordingly, a proceeding will not be considered to have been instituted “without reasonable cause” simply because an argument in the end proves unsuccessful: The Queen v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473; Cavar v Nursing Australia [2012] FCA 338 at [22] (Flick J).

11    In this case, as the judgment granting the summary judgment application explained, the applicant considered the FWA Commissioner who considered her unlawful termination application, and in particular the question whether the time for making it should be extended, failed to accord her a hearing and thereby erred in deciding the extension of time question on the papers.

12    In my view, as much as the applicant feels highly aggrieved by the course of events that have seen her unlawful termination application in the FWA dismissed, including on appeal to the Full Bench, on the facts apparent or which should have been apparent to the applicant, and had she taken legal advice at the time of instituting the proceeding in this Court, she should have appreciated there was no substantial or realistic prospect of success on the grounds or basis advanced by her in this proceeding. The fact she was, at material times, self-represented can make no difference to this question of law on the facts before the Court.

13    The applicant primarily complained about denial of natural justice. It was clearly open to the Commissioner of the FWA not to conduct a hearing but to provide the parties with the opportunity to make representations on the extension of time question in the way that he did. When one consults the terms of the Act itself, as noted in the judgment granting the summary judgment application, the ability of the Commissioner to proceed in the way that he did is provided for. There was nothing unfair in the process he adopted.

14    In these circumstances I am satisfied that the applicant instituted the proceedings in this Court without reasonable cause, as that expression is to be construed as a matter of law in s 570(2).

15    While s 570(1) and (2) thus empower the Court to award costs, by providing that the party may be ordered to pay the costs if the Court is satisfied about any of the subsequent matters, the Court retains a discretion to award costs under s 570(1) or (2). I would conclude that the discretion under s 570, when it arises, like the ordinary discretion of the Court to award costs should be exercised judicially, and that where a party, such as the first respondent here, has been successful in the proceeding and the Court is satisfied, as it is in this case, that the proceeding was instituted without reasonable cause then, unless there is some other relevant reason that should cause the Court to exercise its discretion differently, the party who has been successful in the proceeding should have their costs. There is no other reason suggested by the circumstances not to make a costs order. The fact the applicant is self-represented is an insufficient ground, at least in the circumstances of this case. The first respondent has been put to considerable trouble and expense in responding to a proceeding that is without merit and is entitled to its costs.

16    In these circumstances there is no need to consider the further submission of the first respondent that, if the Court is not satisfied about the matters set out subs (2)(a) of s 570, then it should be satisfied about the matter in subs (2)(b) of s 570.

17    In that regard, the first respondent’s contention is that immediately after the proceedings in this Court were instituted by the applicant, the solicitors for the first respondent wrote to the applicant, pointing out why the proceeding had no prospects of success and in effect inviting her to discontinue the proceeding. That same proposition was put to her on other occasions subsequently as well. The first respondent submits that each of the acts of the applicant in maintaining the proceedings in the light of each of these well-based challenges made on behalf of the first respondent, should be viewed as an “act” for the purposes of s 570(2)(b), and should in each case be considered “unreasonable” in the circumstances.

18    While it is unnecessary to finally determine whether that contention should be accepted – having regard to the Court’s satisfaction, as set out above, in respect of the matters set out in subs (2)(a) – the “act” or “acts” complained of could only be considered “unreasonable” if at that point on the materials in front of the applicant there was no substantial prospect of success in the proceeding. Thus, the question would be the same as that I have already determined for the purposes of subs (2)(a) of s 570.

order

19    The Court further orders additionally to orders 1 and 2 made on 21 November 2012:

1.    The applicant pay the costs of and incidental to this proceeding including the costs of the summary judgment application, to be taxed if not agreed.

Associate:

Dated:    23 November 2012