Federal Court of Australia
Tamu v World Vision Australia (No 2)  FCA 565
QUD 35 of 2021
DATE OF ORDER:
THE COURT ORDERS THAT:
1. The applicant pay the respondent’s costs of the applications in proceeding number QUD 372 of 2020 and proceeding number QUD 35 of 2021 on a party-and-party basis.
1 In Tamu v World Vision Australia  FCA 333, I dismissed the applicant’s applications for leave to appeal. It is now necessary to decide the question of costs.
2 The applicant had sought leave to appeal against two sets of orders of the Federal Circuit Court of Australia made on 17 November 2020 and 8 February 2021 respectively. I dismissed both applications for leave on the basis that the applicant had failed to demonstrate:
that substantial injustice would result if leave to appeal were refused;
any arguable case of denial of procedural fairness; or
any arguable case that the primary judge’s orders were otherwise affected by error.
3 I also ordered that two interlocutory applications brought by the applicant be dismissed.
4 The parties have had the opportunity to exchange written submissions as to costs.
5 By email to the Court dated 15 April 2021, the respondent stated it would rely on earlier submissions filed in the main proceedings on 19 February 2021. The respondent submits that the applicant should pay the respondent’s costs on an indemnity basis.
6 The applicant has not filed any written submissions as to costs which are formally identified as such. By email to the Court dated 19 April 2021, the applicant provided an affidavit which was filed by the Registry on the applicant’s behalf on the same date. The applicant’s affidavit enclosed a number of documents, including:
a copy of my orders dated 9 April 2021 in proceeding number QUD 35 of 2021;
a notice of appeal form in reference to proceeding numbers QUD 372 of 2020 and QUD 35 of 2021 (in this Court) and BRG 317 of 2020 (in the Federal Circuit Court of Australia); and
a copy of a private settlement agreement between the parties dated 16 March 2021 and signed by both parties.
The notice of appeal form enclosed with the applicant’s affidavit appears to contain submissions which are, at least in part, directed to the issue of costs. The applicant seeks a number of orders, including, relevantly, a declaration that, “costs are not applicable in this case”.
7 The applicant has sent a large volume of email correspondence to the Court in the period since I delivered judgment in the proceedings on 9 April 2021. A number of the applicant’s emails have included argument on the issue of costs.
8 By email to the Court dated 26 April 2021 attaching a number of emails sent to the Court by the applicant, the respondent stated that, to the extent the content of the applicant’s email correspondence to the Court constitutes any written submissions as to costs, the respondent would not file any submissions as to costs in reply.
9 The applicant’s email correspondence with the Court has continued. By email to the Court dated 5 May 2021, the applicant provided an affidavit which was filed on the applicant’s behalf on the same date. The applicant’s affidavit enclosed a number of documents, including:
an application for leave to appeal form which does not refer to any proceeding number but refers to the “judgment of given on 9th April 2021 at Brisbane, Queensland (sic)”;
copies of various correspondence between the applicant, the respondent and the Victorian Civil and Administrative Tribunal;
an unsigned copy of a private settlement agreement between the parties dated 16 March 2021;
an unsigned notice of discontinuance form in reference to proceeding number BRG 317 of 2020 in the Federal Circuit Court of Australia;
a signed notice of discontinuance form in reference to proceeding number BRG 317 of 2020 in the Federal Circuit Court of Australia;
a notice of discontinuance form in reference to proceeding numbers QUD 372 of 2020 and QUD 35 of 2021 in this Court, bearing the signature of the respondent only;
a sealed notice of discontinuance in reference to proceeding number BRG 317 of 2020 in the Federal Circuit Court of Australia, filed in that proceeding on 15 April 2021;
a copy of a Victorian Civil and Administrative Tribunal application form with the applicant’s handwritten responses; and
a copy of my orders dated 9 April 2021 in proceeding number QUD 35 of 2021.
10 The applicant was ordered to file any submissions as to costs by 23 April 2021. The applicant has not formally sought leave to file his second affidavit after this date. Accordingly, I will not have regard to the substance of the applicant’s second affidavit and the material enclosed with it, save to note that on 15 April 2021 the applicant discontinued proceeding number BRG 317 of 2020 in the Federal Circuit Court of Australia, which is the subject of the applicant’s applications for leave to appeal in this Court.
11 It is apparent from the body of email correspondence with the Court that there are two key issues in dispute between the parties. The issues concern, firstly, a contractual dispute regarding the enforcement of the private settlement agreement allegedly entered into between the parties prior to judgment in the proceedings, and, secondly, the costs consequences of the applicant having sought leave to discontinue the proceedings after judgment was entered.
12 The first issue concerns an agreement which the applicant alleges compromised the proceedings. The respondent denies that any concluded agreement was reached. In the context of deciding the appropriate order as to the costs of the proceedings, it is unnecessary to determine whether there has been any such agreement. The issue may fall to be decided in any proceedings for enforcement of any contract, or for the enforcement of any costs order.
13 Section 43(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) confers general jurisdiction on this Court to award costs, “in all proceedings before the Court”. The usual position is that the award of costs is, “in the discretion of the Court or Judge”: s 43(2) FCA Act.
14 However, the Court’s jurisdiction to award costs is subject to s 570 of the Fair Work Act 2009 (Cth) (FW Act), which provides that an award of costs may be made only if certain criteria are met. The applicant’s applications for leave to appeal were matters arising under the FW Act. Section 570(2) of the FW Act provides, relevantly:
570 Costs only if proceedings instituted vexatiously etc.
(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
15 It has been held that the power conferred by the confined terms of s 570(2) should be exercised cautiously, and only in clear cases: see Ryan v Primesafe (2015) 323 ALR 107 at ; Saxena v PPF Asset Management Ltd  FCA 395 at . This is due to the “exceptional” nature of the power in an otherwise no-costs jurisdiction: Trustee for The MTGI Trust v Johnston (No 2)  FCAFC 190 at . A party’s conduct must rise significantly above unsatisfactory prior to a Court being inclined to exercise its jurisdiction to award costs, as mere weakness in a position on arguable points of law is insufficient to justify an order: see, for example, Fair Work Ombudsman v Valuair Ltd (No 3)  FCA 1182 at -.
16 The respondent submits that the criteria in s 570(2)(a) and (b) are satisfied in the present case. The respondent relies on four circumstances to justify seeking an award of indemnity costs. The respondent submits that:
The applicant’s specific contentions are “baseless and doomed to fail”.
The applications for leave to appeal are objectively a “waste of time”.
It should be inferred that the applicant brought the applications for leave to appeal with vexatious intent, on the basis of the material filed with the Court and the course of the applicant’s correspondence with the respondent’s solicitors.
The applicant unreasonably persisted with the applications despite warnings from the Court and the respondent’s solicitors.
17 The applicant’s submissions included in his affidavit filed on 19 April 2021, insofar as they are relevant to the issue of costs, focus on the following points, among others:
The bar is “very high” to justify costs being awarded in a matter arising under the FW Act, and it is “rare” for such an award to be made.
The respondent “has always at all material and times acted most unreasonable (sic).”
The public interest policy behind “whistleblower” legislation favours there being no order as to costs, as the making of a costs order against the applicant would potentially deter other employees from pursuing claims against their employers.
18 In Trustee for The MTGI Trust v Johnston (No 2)  FCAFC 190, a Full Court of this Court held at paragraph 10:
 Section 570(2)(a) distinguishes between proceedings which are instituted vexatiously and those which are instituted without reasonable cause. The concept of “vexatious” was recently explained by Pagone J in Garrett v Commissioner of Taxation  FCA 117 at  as referring to proceedings which are scandalous, which disclose no reasonable cause of action, which are oppressive, which are embarrassing, or which are an abuse of the process of the Court. Although the question whether proceedings were instituted without reasonable cause is determined by reference to the facts of the particular case (Spotless Services Australia Ltd v The Honourable Senior Deputy President Jeanette Marsh  FCAFC 155 at ) the phrase was explained by the Full Court in Australian Workers Union v Leighton Contractors Pty Limited (No 2)  FCAFC 23 at  in the following terms:
(1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents’ costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause.
(2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Spotless Services Australia Ltd v The Hon Senior Deputy President Jeanette Marsh  FCAFC 155 at – (to the extent that the Full Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 (“Kangan”) held otherwise, we would respectfully disagree).
(3) The relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed: R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J; Kangan at . In Kanan v Australian Postal and Telecommunications Union  FCA 539; (1992) 43 IR 257 at 264–5 (approved in Kangan) Wilcox J said:
If success depends on the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding, as being “without reasonable cause”. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.
19 In Baker v Patrick Projects Pty Ltd (No 2) (2014) 145 ALD 548, the Full Court of this Court considered that the test requires some “minor modification” when applied to the institution of an appeal. Their Honours held at paragraph 10:
 …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: see Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 257 per Wilcox CJ.
20 In this case, the applicant’s applications for leave to appeal had no reasonable prospects of success. The applicant failed to demonstrate any arguable error in the orders of the primary judge, and there was no arguable assertion of substantial injustice as the applicant had been granted leave to re-plead his case in the Federal Circuit Court of Australia. In factually similar circumstances, the Full Court of this Court has exercised the power to award costs where an application for leave to appeal was made against interlocutory orders on a matter of practice and procedure and the applicant had been granted leave to re-plead his case: see Sabapathy v Jetstar Airways (No 2)  FCAFC 68 at -.
22 To justify the making of a costs order under s 570(2)(b), the Court must be objectively satisfied, first, that the applicant, by his action(s) or omission(s), behaved unreasonably: see Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3)  FCA 810 at . In that case, Justice Katzmann continued at paragraph 26:
 Importantly, the touchstone for the exercise of the power is unreasonableness, not negligence or inefficiency. That said, once the power is enlivened and the Court is considering whether or not to exercise its discretion to make an order, the Court is bound to exercise that discretion in the way that best promotes the overarching purpose of any statutory provision on a matter of practice and procedure referred to in s 37M of the FCA Act: s 37M(3). At this point questions of inefficiency are very relevant, for the overarching purpose of the civil practice and procedure provisions includes the efficient resolution of disputes.
23 Section 37M of the FCA Act provides:
37M The overarching purpose of civil practice and procedure provisions
(1) The overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes:
(a) according to law; and
(b) as quickly, inexpensively and efficiently as possible.
(2) Without limiting the generality of subsection (1), the overarching purpose includes the following objectives:
(a) the just determination of all proceedings before the Court;
(b) the efficient use of the judicial and administrative resources available for the purposes of the Court;
(c) the efficient disposal of the Court’s overall caseload;
(d) the disposal of all proceedings in a timely manner;
(e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute.
24 In the course of the first case management hearing on 11 February 2021, the applicant was put on notice of the need to consider whether to pursue his applications for leave to appeal in circumstances where he had been given the opportunity to re-plead his case in the Federal Circuit Court. In view of the applicant’s duty under s 37N(1) of the FCA Act to conduct the proceeding in a way that is consistent with the overarching purpose, the applicant’s conduct in continuing to pursue his applications was objectively unreasonable. I am required to take account of this factor in exercising my discretion to award costs under s 570(2)(b) of the FW Act: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3)  FCA 810 at .
25 In Shea v EnergyAustralia Services Pty Ltd (No 2)  FCAFC 14, the Full Court of this Court considered the position in relation to indemnity costs under s 570 of the FW Act at paragraphs 10 and 11:
 The power to order a party to pay costs conferred by s 570 is enlivened once one of the jurisdictional criteria in s 570(2) has been satisfied. After that has occurred, the Court is then authorised to exercise its discretion to award costs under s 43(1) of the Federal Court of Australia Act 1976 (Cth), having regard to all of the circumstances. In the circumstances of this application it is not necessary to analyse precisely how the respective discretions in s 570(2) of the Fair Work Act and s 43(1) of the Federal Court of Australia Act interact. If the criterion in s 570(2)(a) were satisfied in a matter, it may well be that the Court could make an order for costs to be paid on an indemnity basis, as it could, and often would, in litigation where the general law of principles as to the award of such costs applied.
 However, the power to order costs, once a criterion in s 570(2) has been satisfied, is discretionary and should be exercised, not so as to impose a penalty or punishment on the losing party but to provide an appropriate means of compensating the successful party having regard to all of the circumstances: see Foots v Southern Cross Mine Management Pty Ltd  HCA 56; (2007) 234 CLR 52 at 62-65 - per Gleeson CJ, Gummow, Hayne and Crennan JJ; Kazar v Kargarian  FCAFC 136; (2011) 197 FCR 113 at 115-117 - per Greenwood and Rares JJ.
26 The starting point is that there should be no order as to costs, so that any award of costs represents a departure from the usual position. An award of indemnity costs represents a greater departure from the starting point. I consider that this is a relevant factor to take into account. While the applicant’s applications for leave to appeal had no reasonable prospects of success, it is also appropriate to take into account that he was unrepresented and, clearly, failed to appreciate the weakness of his case. I do not accept the respondent’s submission that the applicant brought the applications with intent to vex. His applications seemed to be based on a genuine, although misguided, belief in the merit of his case. I do not consider that the applicant’s conduct in bringing and maintaining the applications justifies an award of indemnity costs. I consider that the respondent should have its costs on a party-and-party basis.
27 For the reasons that follow, the fact of the applicant having sought leave to discontinue the proceedings after judgment was entered does not displace this conclusion.
28 The applicant alleges that both proceedings in this Court were discontinued by consent prior to judgment being entered on 9 April 2021, which the respondent disputes. To contextualise the issue, it is necessary to outline a brief history of the applicant’s relevant correspondence with the Court.
29 A notice of discontinuance must be in the form prescribed under r 26.12(1) of the Federal Court Rules 2011 (Cth). Prior to judgment being entered, the applicant had provided a notice of discontinuance in the prescribed form by email to the Court dated 24 March 2021. This notice referred to both applications for leave to appeal, but only bore the signature of the respondent, with the date of 18 March 2021. The applicant’s blank signature line on the form was also dated 18 March 2021. The applicant stated in email correspondence to the Court on 24 and 25 March 2021 that he did not propose to sign the notice. No version of any notice signed by both parties was provided to the Court prior to judgment. As such, the proceedings had not been discontinued and were alive when judgment was entered on 9 April 2021.
30 In the period since I delivered judgment, the applicant has indicated his intention to withdraw both proceedings in this Court through email correspondence to the Court. Pursuant to r 26.12(2)(c) of the Federal Court Rules, the leave of the Court is required for the applicant to file a notice of discontinuance.
31 By email to the Court dated 10 April 2021, the applicant unilaterally provided a notice of discontinuance in the prescribed form, in reference to both proceedings in this Court. This notice contained a statement of consent and bore the signatures of both the applicant and the respondent, each dated 18 March 2021. The respondent alleges that the applicant did not in fact sign this notice on 18 March 2021. The respondent claims that it first received a copy of a notice bearing the applicant’s signature on 13 April 2021, by way of an email from the Court forwarding the applicant’s email of 10 April 2021. The respondent subsequently advised the Court that it did not consent to the proceedings being discontinued. In any event, consent is not a source of power to discontinue proceedings after judgment has been entered: see r 26.12(2)(c) of the Federal Court Rules.
32 By email to the Court dated 17 April 2021, the applicant provided a unilateral notice of discontinuance in reference to both proceedings in this Court, but did so in the incorrect form. The applicant also enclosed a further copy of the notice of discontinuance purported to have been signed by both parties on 18 March 2021.
33 Rule 26.12(7) of the Federal Court Rules deals with the costs consequences of filing a notice of discontinuance. The starting point is that the discontinuing party must pay the other party’s costs unless, for good reason shown, the Court orders otherwise: see Davaria v 7-Eleven Stores Pty Limited  FCA 450 at  and ; Kaur v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (Costs)  FCA 1247 at ; UCX Ltd v Australian Communications and Media Authority  FCA 1345 at ; Balanggarra Aboriginal Corporation v State of Western Australia  FCA 1538 at -; Australian Securities and Investments Commission v Diploma Group Limited (No 3)  FCA 891 at ; Read v Stevens Publishing Pty Ltd  FCA 459 at ; Nicolai v Indochina Medical Co Pty Ltd (No 2) (2013) 300 ALR 755 at -; Travaglini v Raccuia  FCA 620 at .
34 Even assuming the applicant were given leave to file his notice of discontinuance, he has not demonstrated any sufficient reason why the respondent should not have its costs. I decline to give that leave since there would be no utility in doing so, the proceedings having already been dismissed.
35 I will order that the applicant pay the respondent’s costs of the applications on a party-and-party basis.