Federal Court of Australia

Lim v Flinders University of South Australia (No 2) [2023] FCA 147

ORDERS

THE COURT ORDERS THAT:

1.    The applicant is to pay the respondents’ costs incurred from 19 October 2021, such costs to be fixed on a lump sum basis by a Registrar of the Court in the absence of agreement as to quantum.

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

REASONS FOR JUDGMENT

CHARLESWORTH J

1    By this proceeding the applicant, Dr Hazel Lim, brought an application for an extension of time in which to appeal from a judgment of the then-named Federal Circuit Court of Australia. Dr Lim’s application for an extension of time was dismissed on 27 October 2022: Lim v Flinders University of South Australia [2022] FCA 1361.

2    The respondents seek an order that Dr Lim pay their costs. With the consent of the parties that application is now heard and determined on the papers.

3    At first instance Dr Lim alleged that the respondents contravened various provisions of the Fair Work Act 2009 (Cth) (the Act) and this appeal is a matter arising under the Act. In such matters, the Court’s jurisdiction to make an order that a party pay costs is conferred and confined by s 570 of the Act. It provides:

570    Costs only if proceedings instituted vexatiously

(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.

4    In Australian Workers Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428, Dowsett, McKerracher and Katzmann JJ said this about the purpose and scope of the power (at [7]):

(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 Senior Deputy President Jeanette Marsh [2004] FCAFC 155 (Spotless) at [12]–[13] (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 [60]. In Kanan v Australian Postal and Telecommunications Union (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.

5    The respondents seek an award of costs under s 570(2)(a) in respect of the whole of the proceeding on the basis that Dr Lim commenced the application for an extension of time vexatiously or without reasonable cause in that the application at all times had no reasonable prospects of success.

6    Alternatively, the respondents seek an award under s 570(2)(b) for the payment of their costs incurred as and from 19 October 2021 on the basis that Dr Lim acted contrary to an agreement reached on that day for the settlement of the proceedings, rejected a settlement offer and persisted in an unmeritorious claim.

7    For the reasons that follow, there should be an order that Dr Lim pay the respondents’ cost of and incidental to this proceeding as and from 19 October 2021.

Facts

8    The Court has read and considered the respondents’ submissions dated 28 November 2022, the applicant’s submissions dated 13 December 2022 and the following affidavits:

(1)    Mr Michal Bergander-Florek sworn on 3 November 2022; and

(2)    Dr Hazel Lim sworn on 13 December 2022.

9    Dr Lim has at all times been self-represented in her proceedings before this Court. Her submissions on the present application assert error affecting the judgment in Lim and the judgment of the primary judge: Lim v Flinders University of South Australia (No 2) [2021] FCCA 614. The circumstance that Dr Lim does not accept the correctness of those adverse judgments is irrelevant on the question of costs.

10    The conduct of this matter became protracted because of the time taken by Dr Lim to prepare documents in a form that clearly and concisely identified the issues. Dr Lim was largely unsuccessful in her attempts to confine her arguments. I do not consider the lack of confinement to be deliberate on Dr Lim’s part. It is a circumstance that may affect the quantum of any costs liability. I otherwise place no weight on it when determining whether a costs order should be made, except for the limited purpose identified at [26] of these reasons.

11    At first instance, the primary judge made an order under s 570 of the Act that Dr Lim pay the respondents’ costs of her originating application. This Court has not disturbed that order. The affidavits before me contain evidence concerning correspondence and offers relating to the proceedings below. For present purposes the correspondence is relevant to the extent that it shows that the respondents made multiple attempts to settle the proceedings at first instance and in the course of doing so they informed Dr Lim that they considered they had strong prospects of defending them. They drew Dr Lim’s attention to s 570 of the Act. The respondents informed Dr Lim that they considered her claim to be wholly without merit, foreshadowed that her claim could not succeed and stated that the position adopted by her in settlement discussions had been unreasonable. They foreshadowed that they would be making a submission that her rejection of their settlement offers and her persistence in her claims constituted an unreasonable act.

12    The issues arising in this proceeding were different. The Court’s discretion to extend the time in which to commence an appeal is guided by well-established principles discussed and applied in Lim. In accordance with those principles the Court considered whether the proposed grounds of appeal enjoyed reasonable prospects of success and concluded that they did not. The Court also concluded that Dr Lim did not have an adequate explanation for failing to commence the appeal within the prescribed time.

13    It is common ground that on 19 October 2021 (after these proceedings were commenced) a telephone conversation took place between Dr Lim and the respondents’ lawyer, Ms Clare Raimondo. The content of that conversation is summarised by an email from Ms Raimondo to Dr Lim sent on the same day, expressed as follows:

Thank you for your telephone call this afternoon.

I confirm you have asked whether my clients will consent to you withdrawing your notice of appeal (and associated application for an extension of time) which is currently before the Federal Court in SAD150/2021, on the basis that the parties will each bear their own costs of those proceedings and the earlier proceedings before the Federal Circuit Court in ADG155/2017.

I am instructed that my clients consent to this proposal.

As you know, there is a case management hearing listed at the Federal Court tomorrow morning. I invite you to contact the Court this afternoon to advise them of the agreement which has been reached, so that we can avoid the costs of an attendance tomorrow if possible.

14    The respondents’ offer to bear their own costs of the proceedings before the FCCA had considerable monetary value, given that the matter had proceeded to a trial in which the respondents were represented by solicitor and counsel and by reason of the nature and number of the issues raised by Dr Lim. The respondents had the benefit of the costs order and were offering to refrain from its enforcement.

15    Later on 19 October 2021, Dr Lim sent an email to my Associate attaching a document that appeared to be intended as a notice of discontinuance. The Court made an administrative order to the effect that upon the filing of that document it would be taken to be a notice of discontinuance of Dr Lim’s application.

16    Dr Lim did not file the notice. Instead, she sent an email to the South Australian Registry of this Court on 25 October 2021 confirming that it was her intention to persist with her application.

17    The respondents’ lawyer then made it plain to Dr Lim that the respondents withdrew their offer to settle the proceedings on the basis that they bear their own costs and their costs of the proceedings before the primary judge. They made it plain that they reserved their rights.

Consideration

18    I place some weight on Dr Lim’s status as a self-represented litigant. Ordinarily, a person having that status may not be expected to have the experience and skills necessary to assess whether an action is so lacking in merit that it cannot be said to enjoy reasonable prospects of success.

19    In the present case, however, Dr Lim had received correspondence from the respondents’ lawyers in advance of the judgment at first instance asserting that her originating application in the FCCA was lacking in merit and that they considered that they had strong prospects of defending that claim. By that same correspondence the respondents urged Dr Lim to obtain legal advice. Dr Lim was indeed represented by lawyers for some part of the trial and I consider she had the opportunity at that time to obtain legal advice about the nature scope and merits of her claims before the primary judge.

20    The reasons of the primary judge give a detailed and organised explanation as to why each aspect of Dr Lim’s multiple claims should be rejected. As I have mentioned, the primary judge later made an order under s 570 of the Act requiring Dr Lim to pay the respondents’ costs.

21    It follows that at the time of the commencement of proceedings in this Court, Dr Lim had the benefit of the judgment and orders of the primary judge and may be taken to have some appreciation of the power conferred by s 570 of the Act and the circumstances in which that power may be exercised. The reasons of the primary judge were also detailed in their explanation of the essential elements of the alleged contraventions and why they were not fulfilled on the evidence.

22    At case management hearings in this Court the respondents made it plain that they would oppose the application for an extension of time on the basis that the proposed grounds of appeal had no reasonable prospect of success. I consider the respondents’ articulation of their position fairly put Dr Lim on notice that she could not succeed on this application without demonstrating that her multiple grounds of appeal were at least arguable.

23    The events that occurred on and after 19 October 2021 are to be assessed against that background. In my view, Dr Lim acted unreasonably in reneging on the agreement to settle this proceeding and in then persisting with her unmeritorious application through to judgment. From that date, she was aware of the respondents’ position with respect to the merits of her application. The respondents’ position was ultimately found to be correct. The case is not one in which a successful party is seeking an order for costs on the basis that they should follow the event on an arguable claim, after making an earlier attempt at a compromise. The respondents have been put to the costs of defending the application after making their position as to its merits clear and after making a substantive offer of compromise.

24    I have not overlooked that it was open to the respondents to hold up their agreement with Dr Lim as a bar to her persisting with her application and that they did not do so. However, I do not consider that to be a reason not to award them the costs of this action from that date. Holding up the agreement as a bar would have only served to prolong and complicate the litigation and so cause the respondents to incur yet more costs.

25    As explained in Lim, Dr Lim’s submissions in support of the application for an extension of time were in large part fixated on the factual issues arising in the course of her employment. She did not grapple with the reasons the primary judge had given for rejecting her evidence and preferring the evidence of the respondents’ witnesses. Notwithstanding her self-represented status I consider Dr Lim to have been in a position to familiarise herself with the basic principles affecting this Court’s powers on an appeal.

26    Upon receiving the respondents’ offer, Dr Lim ought to have carefully reflected on the prospects of her extensive grounds. She either did not engage in that reflection or having engaged in that reflection, persisted with her claims notwithstanding that she had been put on notice of the respondents’ view that her application for an extension of time should fail.

27    There is of course a difference between an assessment of the merits of an application for an extension of time and the merits of the substantive appeal that is sought to be commenced. For the purposes of s 570 of the Act I am satisfied that the extension of time application was itself lacking in reasonable prospects of success from the outset. I find that Dr Lim ought first to have understood that from the time of the respondents’ valuable settlement offer and I am satisfied that she acted unreasonably in persisting with the application from that date.

28    I am not otherwise satisfied that the respondents should have their costs of the proceedings from an earlier time. In my view, a respondent party seeking costs against a self-represented applicant should demonstrate that the applicant has been fairly put on notice of the respondent’s positon with respect to the particular proceeding in which the costs will be sought. I am satisfied that that occurred on or around 19 October 2021.

29    Dr Lim should pay the respondents’ costs from 19 October 2021, to be assessed in the absence of agreement.

Associate:

Dated:    2 March 2023

SCHEDULE OF PARTIES