Federal Court of Australia

Quirk v Construction, Forestry, Maritime, Mining and Energy Union (Costs) [2022] FCA 53

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.

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.

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

PERRAM J:

1    This matter was decided on 17 December 2021: Quirk v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 1587 (‘Trial Reasons’). The question of costs remains. These reasons should be read with the Trial Reasons. The Applicants’ wrongful dismissal claim succeeded but their adverse action claim failed. The wrongful dismissal claim succeeded on the basis (a) that their removal from office by the First Respondent’s Divisional Executive was invalid; and (b) that the subsequent termination of their employment, resulting from their removal from office, was a repudiation of their contracts of employment which they accepted. Although the Applicants’ sought to invalidate Rule 11 of the First Respondent’s Construction and General Division rules under which they were removed, the conclusion reached was that Rule 11 as a matter of construction did not authorise their removal from office.

2    The parties are agreed that there should be no order as to costs in relation to the adverse action claim. In relation to the wrongful dismissal claim, Mr Quirk and Mr Miller seek their costs but this is resisted by the Respondents.

3    The relevant provision is s 329 of the Fair Work (Registered Organisations) Act 2009 (Cth) (‘the FW(RO) Act’):

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

 (2)     In subsection (1):

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

4    The dispute between the parties is twofold. First, was Mr Quirk and Mr Miller’s action for breach of contract a ‘matter arising under this Act’? The Applicants submit that their claim for breach of contract was not in ‘a matter arising under this Act’ but rather a claim at common law.

5    Secondly, assuming that their claim was in a matter arising under the FW(RO) Act, what is the effect of the words ‘unless the person instituted the proceeding vexatiously or without reasonable cause’? The Applicants submit that these words inherently imply that s 329 only applies to an applicant since only an applicant can institute a proceeding. Consequently, s 329 does not prevent a respondent from being ordered to pay costs.

6    As to the first question, there is some discord in the authorities of this Court about the manner in which the expression ‘a matter arising under this Act’ is to be approached in costs-regulating provisions in industrial statutes. However, none of those problem arise. In the manner in which the Applicants conducted their case it is quite clear that it arose under the FW(RO) Act. A separate proceeding under that Act was commenced and the Applicants sought orders under it requiring the Respondents to treat the Applicants’ removal from office as void. I declined to make any such order because while I considered that their removal was void, an order requiring the Respondents to treat it as such would serve no purpose. Here the thinking was that if the removal decision was invalid then the subsequent termination of their employment on the basis that they had been removed would constitute an act of repudiation at common law. Requiring the Respondents to treat the decision as invalid would not further that case since their co-operation with my conclusion that the removal was invalid was irrelevant to the exercise of the Court’s power to award damages for breach of contract. Since the Applicants had long left the organisation it also served no other purpose, particularly where reinstatement was explicitly not sought.

7    Nevertheless, the case that the Applicants ran explicitly relied on the FW(RO) Act and it is too late for them now to say that it did not. That I did not find it necessary to grant any relief under that Act does not mean that the matter did not arise under it. In any event, the construction of Rule 11 which I preferred was influenced directly by the content of the FW(RO) Act and, in particular, by the model of participatory democracy upon which it is premised. The Applicants were explicit that Rule 11 was to be interpreted in light of the FW(RO) Act and they submitted that if it were not interpreted that way, it would be invalid under the FW(RO) Act. Consequently, even in the Trial Reasons, I accepted that the Applicants’ case involved the direct invocation of the FW(RO) Act: cf. LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581-582. The invocation of the FW(RO) Act was an indispensable step in the claim.

8    Quite apart from that, much of the Applicants’ case was devoted to seeking to demonstrate that Rule 11 was invalid for other reasons under the FW(RO) Act. To accept at this point that the Applicants did not rely on the FW(RO) Act in seeking the relief which they did would be wholly unrealistic. Consequently, I accept that the Applicants’ case was a matter arising under the FW(RO) Act.

9    As to the second question, I do not accept the Applicants’ submission. Section 329 imposes a prohibition on the making of a costs order against any party to a proceeding and then creates an exemption from that prohibition where a party has instituted a proceeding vexatiously or without reasonable cause. I accept that the exemption only applies to a party who institutes a proceeding vexatiously or without reasonable cause and therefore that only applicants can ever fall within the exemption. It does not follow, however, that the general rule only applies to applicants.

10    The logic of the Applicants’ submission is that the qualities of the person referred to in the exemption are to be transplanted into the qualities of the person referred to in the general rule. However, assuming that to be correct for the sake of argument, this would entail that the general rule was consumed by the exemption. It would mean that s 329 was to be interpreted as if it said:

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

11    So construed the exemption would consume the general rule. This strikes me as an unlikely construction. The only way to evade this problem is to say that the qualities of the person to be imported from the exemption to the general rule should include their status as a party who instituted a proceeding whilst leaving the other qualities of vexatious or unreasonable commencement behind in the exemption. I can discern no textual foothold by which such a partial importation might be plausibly defended.

12    I therefore do not accept that the word ‘person’ where it first appears in s 329(1) is qualified by the content of the exemption. Consequently, the general rule in s 329(1) applies to all persons to the proceeding. I would reserve for an occasion when it arises the impact of s 329(1) on interlocutory applications and in particular, whether the proceeding referred to in the exemption can include an interlocutory proceeding.

13    The effect of this conclusion is that the Respondents have the benefit of the general prohibition in s 329(1) and may not be ordered to pay costs.

14    In that circumstance, the Respondents are entitled to rely on s 329(1) to resist any order for costs. Since the parties are agreed that there should be no costs order in relation to the adverse action claim, the appropriate costs order to finalise the proceeding is that there should be no order as to costs.

Associate:

Dated:    3 February 2022

SCHEDULE OF PARTIES