Federal Court of Australia

Toma v Workforce Recruitment and Labour Services Pty Ltd (No 2) [2020] FCA 1278

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

WIGNEY J:

1    On 3 August 2020, I dismissed an application by Mr Loi Toma for relief pursuant to s 39B of the Judiciary Act 1903 (Cth) in respect of adverse decisions that had been made against him by the Fair Work Commission in an unfair dismissal proceeding: Toma v Workforce Recruitment and Labour Services Pty Ltd [2020] FCA 1102 (principal judgment). The first respondent, Workforce Recruitment and Labour Services Pty Ltd, sought an order that Mr Toma pay its costs. For the reasons that follow, there should be no order for costs.

2    Were it not for s 570 of the Fair Work Act 2009 (Cth), there could be little doubt that it would have been appropriate for Mr Toma to be ordered to pay Workforce’s costs of this proceeding. The Court’s general discretion to award costs under s 43 of the Federal Court of Australia Act 1976 (Cth) is broad, though ordinarily costs will follow the event unless some good reason is shown for why such an order is not appropriate. It was common ground, however, that the Court’s otherwise broad discretion in relation to costs was constrained in this case by s 570 of the Fair Work Act, which provides as follows:

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 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.

3    While Mr Toma’s claim in this Court was for relief under the Judiciary Act, his underlying claim in the Fair Work Commission undoubtedly arose under the Fair Work Act.

4    It is unnecessary to rehearse the principles that apply to s 570 of the Fair Work Act in any great detail. It is important to emphasise, however, that the discretion to award costs under s 570(2) must be exercised cautiously. The reasons why that is so were explained by Mortimer J in Ryan v Primesafe [2015] FCA 8; 323 ALR 107 (at [64]):

… The discretion conferred by the confined terms of s 570(2) should be exercised cautiously, and the case for its exercise should be clear: see Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] per Bromberg J. The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the Fair Work Act, or the defence of such claims. The policy behind s 570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. …

5    Workforce contended that s 570(2)(a) and (b) of the Fair Work Act were engaged in the circumstances of this case. As for paragraph (2)(a), Workforce submitted that Mr Toma’s case in this Court had no real prospects of success and was doomed to fail. That was, in its submission, demonstrated by the fact that the Court ultimately found that his two review grounds had no merit and that Mr Toma had not demonstrated any jurisdictional error on the part of the Fair Work Commission. Workforce also appeared to suggest that the hopelessness of his case should have been readily apparent to Mr Toma.

6    It is clear that a party will not be found to have instituted a proceeding without reasonable cause, for the purposes of s 570(2)(a) of the Fair Work Act, simply because the party was ultimately unsuccessful. In Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351, Pagone J said in that regard (at [8]):

… To exercise the discretion conferred by that provision 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.

7    It may be accepted that Mr Toma’s case, strictly speaking, was doomed to fail. Even on his own version of the facts, he had no substantial prospects of success. That is mainly because his unfair dismissal action in the Fair Work Commission ultimately failed because it was found that he resigned and had not been dismissed: principal judgment at [79] and [89]. Neither of Mr Toma’s review grounds challenged that finding.

8    I am nevertheless not persuaded to exercise the discretion to order costs against Mr Toma on this basis. That is because Mr Toma was able to demonstrate that there was some merit in his underlying complaints about how the Fair Work Commission had handled his case. Most significantly, he was ultimately able to demonstrate, in effect, that he was denied procedural fairness at a directions hearing in the Fair Work Commission because the hearing was not accurately or adequately interpreted to him in his language, which was Samoan: principal judgment at [31] and [71]-[73]. There was also merit in Mr Toma’s complaint that the manner in which the name of the respondent in the proceedings in the Fair Work Commission was changed was irregular and somewhat unsatisfactory: principal judgment at [83]. The problem for Mr Toma, and the main reason that his application in this Court was ultimately dismissed, was that neither of those deficiencies or irregularities in the way in which the Fair Work Commission handled his case were demonstrated to be material to the decisions reached by the Fair Work Commission.

9    While Mr Toma’s case in this Court failed, and was perhaps doomed to fail, because he was unable to demonstrate the materiality of the deficiencies and irregularities in the Fair Work Commission’s handling of his matter, the fact that his complaints about those matters were not entirely baseless weighs against the exercise of the discretion to award costs against him. That is particularly the case given that he was not legally represented and most likely did not appreciate the need to prove the materiality of his complaints about the Fair Work Commission’s conduct.

10    As for Workforce’s contention that an unreasonable act or omission by Mr Toma caused it to incur the costs and thus s 570(2)(b) of the Fair Work Act was engaged, Workforce relied essentially on two acts or omissions. First, Mr Toma disputed all of the facts and documents which were set out in a detailed Notice to Admit that Workforce served on him. Second, Mr Toma failed to accept what was said to be “an offer of compromise” made by Workforce. That was said to be a “walk away offer”; that is, an offer by Workforce that it would not seek costs against Mr Toma if he consented to his application being dismissed.

11    I am not persuaded that Mr Toma’s actions in refusing to admit any of the facts or documents contained in Workforce’s Notice to Admit or in refusing to accept Workforce’s “walk away offer” were unreasonable acts or omissions for the purposes of s 570(2)(b) of the Fair Work Act. Even if those acts or omissions could relevantly be characterised as being unreasonable, I am not persuaded that they would justify an order for costs being made against Mr Toma in all the circumstances.

12    As has already been noted, Mr Toma was not legally represented. English was not his first language and, without meaning any disrespect for Mr Toma, it clearly could not be said that he was a particularly astute or sophisticated litigant. It is perhaps not surprising, in those circumstances, that he did not fully engage with Workforce’s Notice to Admit. That notice contained 49 separate facts that Mr Toma was asked to admit, many of which had little to do with the issues that Mr Toma had raised about his treatment by the Fair Work Commission. Some of the facts that Mr Toma was asked to admit may also have been difficult for Mr Toma to comprehend, in particular the lengthy series of questions directed at the transcript of the relevant directions hearing. The same can be said about Mr Toma’s failure to engage with the offer of compromise, which was accompanied by a lengthy, legalistic and somewhat presumptuous letter which purported to explain why it would be unreasonable for him not to accept the offer.

13    I also take into account, in this context, that Workforce’s conduct of the proceedings in this Court were far from being above reproach. Despite the apparent narrowness of Mr Toma’s review grounds, Workforce filed an extremely lengthy affidavit which annexed an extremely large bundle of documents. Not only were many of those documents essentially irrelevant or immaterial to the issues raised by Mr Toma, they were also organised in an extremely confused and confusing way. Ultimately, that affidavit was not read or relied on at the hearing and only a limited number of the documents annexed to it were tendered. Workforce also filed written submissions which, with respect, did not really engage with or respond to Mr Toma’s complaints.

14    Perhaps most significantly, however, it is clear from the Notice to Admit that was filed by Workforce that Workforce had utilised the services of a Samoan interpreter, or at least someone who was able to interpret or translate in the Samoan language, and was or must have been aware of the deficiencies and inaccuracies in the interpretation that occurred at the relevant directions hearing. Yet Workforce made no concession or admissions in that regard and did not adduce any evidence about the interpretation at the directions hearing. As a result, as explained in the principal judgment, at the hearing it ultimately proved necessary to utilise the services of the Court appointed interpreter to assist in determining whether Mr Toma’s complaints had any merit: see principal judgment at [22]. That was irregular and most unsatisfactory.

15    While I am not suggesting that Workforce’s conduct of the proceeding in this Court was relevantly unreasonable, it certainly did not really facilitate or assist in the quick, inexpensive and efficient resolution of the dispute.

16    In all the circumstances, I am not persuaded that Workforce has established a clear or compelling case for the exercise of the discretion in s 570(2) of the Fair Work Act to award costs against Mr Toma. It is, in all the circumstances, appropriate that there be no order as to costs in respect of the proceeding in this Court.

Associate:

Dated:    4 September 2020