Federal Court of Australia

Parker v HG Innovations Pty Ltd (No 2) [2021] FCA 1258

ORDERS

THE COURT ORDERS THAT:

1.    The respondents’ application for costs be dismissed.

2.    In respect of the affidavit of Michael Gleeson, filed 1 September 2021, no person other than a party to the proceedings, a legal representative of a party, or an officer of the Court, may publish, inspect or copy that affidavit without the leave of the Court or a judge first had and obtained.

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

REASONS FOR JUDGMENT

(REVISED FROM TRANSCRIPT)

LOGAN J:

1    The three respondent parties to the appeal have made an application that the appellant, Mr Philip Parker, pay costs in respect of the appeal. These reasons for judgment must be read in conjunction with the reasons for judgment disposing of the appeal, Parker v HG Innovations Pty Ltd [2021] FCA 1051.

2    The respondents relied upon two affidavits to support the costs application. One made by the respondents’ solicitor exhibited correspondence and related formal offer to settle. The offer was that Mr Parker compromise the appeal in return for the payment of $100, inclusive of any cost which he had incurred. It was made on 6 May 2021.

3    The other affidavit was one made by Mr Gleeson, to whom reference is made in the principal judgment. It contains many argumentative passages along with confirmation in terms of allegations of conduct after the end of Mr Parker’s engagement with the respondents, which are not just untested but quite irrelevant. Those allegations are also made in intemperate terms.

4    The awarding of costs in a proceeding such as this does not entail an unfettered exercise of the general discretionary power in respect of the awarding of costs conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). The usual way in which that discretion is exercised, absent particular statutory intrusion, is that costs follow the event. Here, that event is the dismissal of the appeal. But this is a proceeding in the Court’s Fair Work division, and one to which s 570 of the Fair Work Act 2009 (Cth) applies. That section provides:

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.

Note:    The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 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.

5    With reference to the criteria found in s 570(2), my conclusion is that the proceedings were instituted neither vexatiously nor without reasonable cause.

6    It needs to be remembered that Mr Parker instituted his appeal prior to the delivery by the High Court of its judgment in WorkPac Pty Ltd v Rossato (2021) 95 ALJR 681 (WorkPac v Rossato). Indeed, the present appeal may very well have been the first proceeding in this Court after the High Court’s judgment in which the ramifications of that judgment fell for consideration of application.

7    Mr Parker’s submissions on the appeal were, as is revealed in the principal judgment, informed notably by the High Court’s earlier judgment in Hollis v Vabu Pty Ltd (2001) 207 CLR 21 (Hollis v Vabu), and an earlier judgment of this Court, On Call Interpreters and Translators Agency Pty Ltd v Federal Commissioner of Taxation (No 3) (2011) 214 FCR 82. Against the background of those cases and the factual circumstances, as revealed in the principal judgment, it would be quite impossible, in my view, in prospect to have regarded the present appeal as one instituted without reasonable cause. It most certainly was not instituted vexatiously.

8    The reasons for judgment of the learned Federal Circuit Court judge were not, with respect, revealing as to how, having regard to Hollis v Vabu, the conclusion was reached that Mr Parker was not an employee. His Honour did, with respect, identify a particularly relevant consideration in relation to what appeared to be a term of the engagement in relation to taxation consequences of the relationship, but did not refer to an authority at intermediate appellant level which in modern times has highlighted how that consideration can be decisive: see Eastern Van Services Pty Ltd v Victorian WorkCover Authority (2020) 296 IR 391.

9    Even allowing for that, there then remained, in my view, a quite reasonable justiciable controversy as to whether the relationship was truly one of employment, having regard to considerations of integration and control.

10    All of that, however, was the subject of a sharp reminder by the High Court in WorkPac v Rossato as to the need to focus upon the contract made between the parties.

11    As to the other criteria in s 570(2), Mr Parker’s further prosecution of the appeal in the face of what can only be regarded as a derisory offer was not, in my view, unreasonable. For such an offer to have resonance in terms of costs, the prospects of success would have to have been utterly hopeless.

12    The respondent’s case for the awarding of costs after the making of such an offer was not advanced by the absence in related correspondence on any reasoned case as to why it was that Mr Parker’s appeal was utterly hopeless, so that he might reflect upon that in deciding whether or not to accept the offer and compromise the appeal.

13    In Health Services Union v Jackson (No 5) [2015] FCA 1467, at [46], and in the context of s 570, Tracey J observed:

46    Once a viable offer is made and it is not accepted by the offeree, the offeror who seeks indemnity costs bears the onus of establishing that the offeree’s refusal or non-acceptance was unreasonable or imprudent. The reasonableness of the refusal or non-acceptance must be determined in the light of the circumstances that existed at the time that the rejection or failure to accept occurred.

Those sentiments, in my view, are applicable here, and they are applicable even in relation to whether or not costs on a party and party basis ought to be awarded. As I have already mentioned, at the time when this particular offer was made, the High Court judgment in WorkPac v Rossato had not been delivered. Even had it been, there was no subsequent authority by reference to which the ramifications of that case might have been assessed by Mr Parker.

14    The considerations which I have mentioned are those which commended themselves to Katzmann J in another pertinent authority, Veda Advantage Limited v Malouf Group Enterprises Pty Ltd (No 2) (2016) 118 IPR 156, at [31]. They were also taken into account in the context of the rejection of what is sometimes termed a “Calderbank letter”, which was, in effect, a ‘walk away’ offer in a case pertinently referred to by Mr Parker in his submissions, Cheng v Western Pursuits Trust (t/as Vauxhall Inn) (No 2) [2017] FCCA 659. There is no way, in my view, that the compromise offered reflected the then prospects of success in relation to the appeal and then also, in turn, what Mr Parker might have expected by way of compensation had his appeal succeeded and the case remitted to the Federal Circuit Court for assessment of that compensation.

15    Thus, taking into account the criteria mentioned in s 570(2), there is no occasion in this proceeding for the Court to make an order for costs as sought by the respondents. The respondents accepted that that decision necessarily determined the fate of an interlocutory order which had preserved an entitlement on their part to costs of an earlier case management hearing in the event that the respondents succeeded in establishing an entitlement to costs in relation to the appeal. It follows that the application must be dismissed.

Associate:    

Dated:    18 October 2021