Federal Court of Australia

Zirk-Sadowski v University of New South Wales (No 4) [2024] FCA 813

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant pay the First Respondent’s costs on a party and party basis, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

ANDERSON J:

introduction

1    On 16 May 2024, I published reasons for my decision in Zirk-Sadowski v University of New South Wales (No 3) [2024] FCA 515 (reasons) in which I dismissed the applicant’s amended originating application dated 22 June 2023.

2    The background to the matter is sufficiently set out in paragraphs 1-7 of my reasons.

3    As outlined in paragraph 60 of my reasons, the first respondent, the University of New South Wales (UNSW), asked to be heard on the question of costs. In line with the orders I made on 16 May 2024, UNSW and the applicant filed submissions on the question of costs. The second respondent, the Fair Work Commission (FWC), did not seek to be heard on the question of costs and has filed no submissions on the issue.

4    UNSW seeks to engage an exception under s 570(2) of the Fair Work Act 2009 (Cth) (the Act), seeking an order for indemnity costs fixed at $55,536.03. In particular, UNSW seeks to engage the exception under s 570(2) on the basis that the proceeding was instituted without reasonable cause, and/or on the basis that the applicant’s unreasonable actions or omissions caused UNSW to incur the costs. The applicant opposes UNSW’s application for costs entirely.

Legal Principles

5    Section 570 of the Act provides as follows:

(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.

6    Section 570 operates as an express limitation on the Court’s broad discretion to award costs under s 43 of the Federal Court of Australia Act 1986 (Cth) (FCA Act): Melbourne Stadiums Ltd v Sautner (2015) 317 ALR 665; [2015] FCAFC 20 at [140] (Tracey, Gilmour, Jagot and Beach JJ).

7    In relation to the question of what is meant by a proceeding instituted without reasonable cause, the Full Court stated in Australian Workers Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428; FCAFC 23 at [7]-[8] (Dowsett, McKerracher and Katzmann JJ):

In Khiani v Australian Bureau of Statistics [2011] FCAFC 109 (Khiani) the Full Court endorsed the summary of the authorities provided by Reeves J in Nimmo, Re an Appln for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728 at [27]–[30]. In our view the authorities establish the following principles:

(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 Hon 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.

We would emphasise, however, that these principles relate to the question of whether the jurisdiction to award costs is enlivened. Even if the court has jurisdiction to make a costs order, it retains the discretion to refrain from exercising it in an appropriate case.

8    Whether a party has engaged in an unreasonable act or omission will depend on the particular circumstances of the case. As the Full Court stated in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (costs of Cup of Tea Case) [2019] FCAFC 36 at [18] (Flick, Reeves and O’Callaghan JJ), “the word ‘unreasonable’, which is central to the phrase ‘unreasonable act or omission’ is not capable of precise definition and is ‘inherently sensitive to context’”.

9    An unreasonable act or omission can include the unreasonable continuation of proceedings where the difficulties inherent in doing so have been brought to the party’s attention: see Ryan v Primesafe (2015) 323 ALR 107; FCA 8 at [85] (Mortimer J).

Consideration

Is an exception under s 570(2) enlivened?

10    For the reasons submitted by UNSW, which I agree with and have outlined below, the applicant should be ordered to pay UNSW’s costs on the basis that the applicant instituted the proceeding without reasonable cause, and that the applicant’s unreasonable actions caused UNSW to incur costs.

11    Firstly, as referred to at paragraph 16 of my reasons, the application failed to disclose any material facts or principles of law which were capable of demonstrating any jurisdictional error in the FWC decisions the applicant sought to review. The applicant largely re-agitated the same points that had already been dispatched twice before by the FWC. Many of the issues raised by the applicant were unsupported allegations which were unrelated to the underlying application.

12    The applicant submits that he reasonably believed that his conduct was not without reasonable cause, that the application was based on multiple reasonable grounds, and that in light of the circumstances surrounding his dismissal, his attempts to seek redress through legal proceedings could not be deemed unreasonable. While the applicant’s submissions may reflect his sincere belief, the relevant question is one of objective merit; namely whether there were facts apparent to the party at the time of instituting the proceeding that, viewed objectively, would demonstrate that there were no reasonable prospects of success: Kennedy v Secretary, Department of Industry (No 4) [2017] FCAFC 7 at [7]-[11] (Flick, Jagot and Bromwich JJ).

13    Secondly, the FWC decisions were interlocutory and involved the exercise of broad discretions. The applicant faced a higher hurdle in establishing jurisdictional error in decisions of such kind, a hurdle which the application fell well short of. As outlined above, nothing disclosed in the application was capable of demonstrating any jurisdictional error in the FWC decisions.

14    Thirdly, the defects in the application had been raised and brought to the applicant’s attention several times, well prior to the trial.

15    UNSW wrote to the applicant on 18 May 2023 noting the material defects in the applicant’s originating application. In doing so, UNSW noted a number of the same contentions it raised at trial.

16    On 1 June 2023, I dismissed an application for default judgment filed by the applicant. In my reasons published on 17 July 2023, Zirk-Sadowski v University of New South Wales [2023] FCA 805 (Zirk-Sadowski (No 1)), I noted that on the face of the pleadings, neither the concise statement nor the originating application filed by the applicant disclosed any material facts capable of demonstrating jurisdictional error in the FWC decisions (at [8]).

17    In dismissing the application for default judgment, leave was granted for the applicant to file and serve an amended originating application. The amended originating application subsequently filed by the applicant on 22 June 2023 failed to rectify any of the defects brought to the applicant’s attention, and largely further confused an application that was already difficult to follow.

18    Despite the various defects in the application being brought to the applicant’s attention, the applicant failed to take steps to rectify those defects, despite having sufficient opportunity to do so.

19    Fourthly, UNSW’s 18 May 2023 correspondence invited the applicant to discontinue his application in light of the material defects identified, noting that the application lacked any reasonable prospects of success. UNSW noted that they would rely on the correspondence on the question of costs. The applicant nevertheless continued his application, again without seeking to rectify any of the material defects identified, for another year.

20    Fifthly, as part of the proceeding, the applicant filed two default judgment applications. The first application (which I referred to above) related to an alleged failure by the respondents to file defences, while the second related to a failure by the respondents to file genuine steps statements. Each of these applications were without any proper foundation and dismissed: see Zirk-Sadowski (No 1); Zirk-Sadowski v University of New South Wales (No 2) [2023] FCA 897 (Zirk-Sadowski (No 2)).

21    Sixthly, the material prepared by the applicant for the trial was unreasonable in the circumstances. The court book prepared by the applicant spanned some 7,900 pages, the vast majority of which had little to no relevance to the underlying application, and was not drawn upon in the trial. The manner in which the material was prepared was of little assistance to the parties or the Court in considering the matters relevant to the application. This also occurred in circumstances where the applicant was explicitly reminded of his obligations under s 37N(1) of the FCA Act to conduct the proceeding in a manner consistent with the overarching purpose set out in s 37M(1): Zirk-Sadowski (No 2) at [43].

22    Seventhly, even allowing, as I do, for a degree of latitude given that the applicant was self-represented, the reasons outlined above nevertheless justify a costs order in favour of UNSW. The fact that the applicant is self-represented is not a circumstance which relieves an unsuccessful self-represented litigant from an obligation to pay costs if they are otherwise justified: Kennedy v Secretary, Department of Industry (No 2) [2015] FCA 884 at [12] (Buchanan J).

Quantification of costs

23    The final matter to determine is the basis on which costs are to be awarded. UNSW seeks indemnity costs fixed at $55,536.03.

24    The Court has a broad discretion to award costs under s 43 of the FCA Act.

25    The relevant principles governing an award of indemnity costs were outlined by the Court in Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 156-157 (Cooper and Merkel JJ):

1.    Section 43 of the FCA [Act] confers an absolute and unfettered discretion on the Court to make orders as to costs but the discretion must be exercised judicially.

2.    In order to exercise the discretion judicially the following principles have been accepted by the Court as applicable:

(a)    the Court ought not to depart from the rule that costs be ordered on a party and party basis unless the circumstances of the case warrant the Court in departing from the usual course;

(b)    the circumstances which may warrant departure from the usual course arise as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the Court in departing from the usual course;

(c)    whilst the circumstances in cases in which indemnity costs have been ordered offer a guide, the question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for costs other than on a party and party basis.

26    The award of indemnity costs is an exceptional order, and one that the Court must approach cautiously before reaching the required degree of satisfaction that the award is appropriate. This is particularly the case in the context of the access to justice principles which s 570 is designed to achieve by enabling parties to bring claims without the risk of having to pay their opponents’ costs in matters arising under the Act: Leighton, at [7].

27    In the circumstances of the present case, while I am satisfied that it is appropriate to order the applicant to pay UNSW’s costs under s 570(2) of the Act, the access to justice principles of s 570 remain relevant to whether such costs should be awarded on a party and party basis, or on an indemnity basis. I am not satisfied that UNSW has made out the exceptional circumstances required to justify an award of indemnity costs, and am not disposed to exercising my discretion in such a manner.

DISPOSITION

28    For these reasons, the applicant will be ordered to pay UNSW’s costs on a party and party basis, such costs to be taxed if not agreed.

Associate:

Dated:    26 July 2024