Federal Court of Australia

Burt v University of Sydney (No 2) [2025] FCA 596

ORDERS

THE COURT ORDERS THAT:

1.    The Applicant pay the Second Respondent’s costs in proceedings NSD 89 of 2025 on a party-and-party basis.

2.    The costs payable pursuant to Order 1 above be fixed, pursuant to r 40.02(b) of the Federal Court Rules 2011 (Cth), as a lump sum in the amount of $26,400.

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

REASONS FOR JUDGMENT

OWENS J:

1    In Burt v University of Sydney [2025] FCA 393 I dismissed Dr Burt’s applications for leave to appeal against an interlocutory decision of the primary judge, and for an extension of time within which to seek such leave. The Commonwealth now seeks orders, by reference to s 570(2) of the Fair Work Act 2009 (Cth), that Dr Burt pay its costs of the applications, including, in part, on an indemnity basis. It also seeks orders that any costs be ordered in a lump sum.

Costs: Section 570

2    The otherwise broad discretion conferred on the Court by s 43(1) of the Federal Court of Australia Act 1976 (Cth) to make costs orders in a proceeding is, by s 43(1)(b), expressly subject to the limitation imposed by s 570 of the Fair Work Act. That section provides:

570 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.

(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.

3    The Commonwealth accepts, correctly, that s 570 applies to Dr Burt’s applications.

4    An application for leave to appeal, and an application for an extension of time within which to bring such an application, will be proceedings falling within the section provided they relate to a matter arising under the Fair Work Act (see Drummond v Canberra Institute of Technology (No 2) [2023] FCA 422 at [9] (Wigney J)). The principal proceedings brought by Dr Burt are undoubtedly a matter arising under the Fair Work Act. (Dr Burt’s claim against the Commonwealth is that, pursuant to s 550 of the Fair Work Act, it was “involved” in contraventions of applicable national minimum wage, modern awards or enterprise agreements covering the University of Sydney in contravention of ss 45, 50 or 293 of the Fair Work Act.) The application for leave to appeal and an extension of time arose directly out of an interlocutory application in those proceedings, and thus “relate to” a matter arising under the Fair Work Act.

5    The Commonwealth relied on both ss 570(2)(a) and 570(2)(b). There was considerable, but not complete, overlap in the arguments advanced in respect of each ground. That is:

(a)    in relation to s 570(2)(a), the Commonwealth relied on what was said to be the inherently hopeless quality of the applications; and

(b)    in relation to s 570(2)(b), the Commonwealth submitted that Dr Burt acted unreasonably in commencing and maintaining (including by not accepting an offer of compromise) those inherently hopeless applications.

6    By limiting the circumstances in which a costs order may be made, s 570 of the Fair Work Act operates to promote access to justice by ensuring that the spectre of an adverse costs order does not discourage litigants with genuine grievances, and an arguable evidentiary and legal basis for them, from advancing their claims in a complete and robust way: Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190 at [8] (Siopis, Collier and Katzmann JJ); Ryan v Primesafe [2015] FCA 8 at [64] (Mortimer J). It follows that the “Court ought be very careful indeed to exercise the discretion provided by s 570(2) and should not do so other than in a clear case”: Saxena v PPF Asset Management Ltd [2011] FCA 395 at [6] (Bromberg J).

7    Even if the preconditions specified by s 570(2) exist, the Court retains a discretion as to whether it will award costs: Dahdah v Platinum Distributors Australia Pty Ltd (Costs) [2023] FCAFC 102 at [31] (Rangiah, Goodman and McElwaine JJ); Australian Workers Union v Leighton Contractors Pty Ltd (No 2) (2013) 232 FCR 428; [2013] FCAFC 23 at [8] (Dowsett, McKerracher and Katzmann JJ); Shea v Energy Australia Services Pty Ltd (No 2) [2015] FCAFC 14 at [11] (Rares, Flick and Jagot JJ).

8    For the purposes of s 570(2)(a), costs will only be capable of being awarded against a party where their case had “no real prospects of success or was doomed to fail”: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275; [2006] FCAFC 199 at [60] (Black CJ, North and Mansfield JJ); Ashby v Slipper (No 2) [2014] FCAFC 67 at [35] (Mansfield, Siopis and Gilmour JJ). The focus of that question necessarily changes with the nature of the proceedings in relation to which the costs order is sought. Here, it is an application for leave to appeal and a related extension of time. This case is closer, therefore, to the context of an appeal, in relation to which the Full Court observed in Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 at [10] (Dowsett, Tracey and Katzmann JJ):

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.

9    In relation to s 570(2)(b), the principles governing the operation of that sub-section were helpfully collected by Halley J in BDR21 v Australian Broadcasting Corporation (No 2) [2021] FCA 1347 at [26]. Critically:

…

(b) the touchstone for the exercise of the power is unreasonableness, not negligence or inefficiency: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3) [2017] FCA 810 at [26] (Katzmann J); Tucker v State of Victoria [No 2] [2021] VSCA 182 at [32(h)] (Kyrou, McLeish and Sifris JJA);

(c) the fact that a party has conducted litigation inefficiently, made belated concessions, or adopted a misguided approach may be relevant to, but will not be conclusive of, the question of unreasonableness: Mutch v ISG Management Pty Ltd (No 2) at [8] (Bromberg J) citing Construction Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574; [2008] FCAFC 143 at [29] (Tamberlin, Gyles and Gilmour JJ) and Hutchinson v Comcare (No 2) [2017] FCA 370 at [8] (Bromberg J); Tucker at [32(h)];

(d) the term “unreasonableness” is not conducive to precise definition, rather it is to be understood as controlling the extent of the limitation on the making of a costs order pursuant to s 570 of the Fair Work Act and it takes much of its meaning from the underlying reason for that limitation: Mutch at [7];

(e) unreasonableness is to be determined objectively, it is a question of impression and degree and is to be assessed by reference to the particular circumstances of a given case: Tucker at [32(g)] citing PIA Mortgage Services Pty Ltd v King [No 2] [2020] FCAFC 53 at [15] (Rangiah, Charlesworth and Snaden JJ)]

10    Of particular relevance for present purposes, it is also well-established that the failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2)(b): Melbourne Stadium Ltd v Sautner [2015] FCAFC 20 at [166] (Tracey, Gilmour, Jagot and Beach JJ).

Consideration: Sub-Section 570(2)(a)

11    The Commonwealth submitted, relying on the reasoning set out in my judgment, that the applications were instituted without reasonable cause because (a) there was no substantial injustice that would have resulted from a refusal to grant leave to appeal (Burt at [3]-[13]), (b) the primary judge’s interlocutory judgment was not attended by sufficient doubt (Burt at [14]-[22]), and (c) an extension of time would not have otherwise been granted because there was an insufficient explanation for the delay in filing the application out of time (Burt at [28]-[32]).

12    In response, Dr Burt submitted, correctly, that the mere fact he had failed on each of those matters did not mean that the applications were commenced without reasonable cause (see, e.g., Leighton Contractors at [7(3)]; Kangan at [60]). He submitted that a different judge might have taken a different view, leading to a different result. He submitted that “[t]he matter always had reasonable prospects of success: the delay of the Applicant could be reasonably explained; there were reasonable arguments as to the incorrectness of the primary judge’s decision; and there were reasonable arguments as to there being substantial injustice to the applicant and the class if leave to appeal were not granted.”

13    A significant portion of Dr Burt’s submissions were devoted to the expression of disagreement with my judgment, both as to the correctness of my reasoning and conclusions, and in the identification of matters that it was suggested I had overlooked or ignored. It is not necessary for me to engage with those submissions, however, because one matter that they do not address, and which would be necessary to address in order to demonstrate the existence of reasonable cause in bringing the applications, is the complete lack of any practical utility in the applications even if they had succeeded.

14    That is to say, although Dr Burt submitted that there were “reasonable arguments as to there being substantial injustice to the applicant and the class if leave to appeal were not granted”, I could detect nothing in his submissions that identified any such argument. In my judgment at [4], I listed the three matters that Dr Burt had identified as the practical consequences of success on any appeal. For the reasons I gave, none of those matters could have been achieved, or even advanced, by way of appeal of the primary judge’s judgment. Dr Burt’s latest submissions did not identify any reason or argument why the contrary conclusion was arguable. Rather, he sought to identify various injustices that he considers to have flowed from the primary judge’s judgment. Even on the assumption, which is a very large assumption indeed, that those matters can be regarded as a consequence of the primary judge’s judgment (as opposed to the consequence of forensic decisions taken by the applicant and his then lawyers), and that they can be characterised as injustices, an appeal would not have provided any remedy for them.

15    The complete and unarguable lack of practical utility of the appeal for which leave was sought means that, in my view, Dr Burt brought his applications without reasonable cause. That is so regardless of whether the same conclusion could be drawn in relation to the merits of Dr Burt’s contentions concerning bias on the part of the primary judge, other asserted errors in the primary judgment, and in support of an extension of time. Even assuming that Dr Burt’s arguments on those issues were arguable, if success in relation to them would have led absolutely nowhere, then they can provide no independent justification for the bringing of the applications. It follows that the circumstance described in s 570(2)(a) applies, and the discretion to order costs is enlivened.

Consideration: Section 570(2)(b)

16    The hopelessness and pointlessness of Dr Burt’s applications were pointed out to him fairly and promptly by the Commonwealth.

17    Dr Burt filed his application for an extension of time and leave to appeal against the decision of the primary judge on 23 January 2025. On that same day, the Commonwealth sent a letter to Dr Burt, in which it pointed out, relevantly to the question of the practical utility of Dr Burt’s proposed appeal:

(a)    The primary judge’s judgment only dealt with Dr Burt’s application to strike out the Commonwealth’s strike out application. It did not pass upon the merits of the Commonwealth’s application.

(b)    The Commonwealth’s strike out application was never heard, because Dr Burt chose (with the benefit of legal advice) to consent to his existing pleading being struck out, and to amend his claim in material respects.

(c)    Any appeal of the primary judge’s judgment would not “unwind” decisions that Dr Burt had taken in the interim.

(d)    If Dr Burt wished to amend his pleadings, then he needed to seek leave to do so.

(e)    The Commonwealth would oppose any application for leave to appeal because, regardless of its merits, “any appeal will be futile given the orders to which [Dr Burt] subsequently agreed”.

(f)    The Commonwealth would likely incur significant costs in responding to Dr Burt’s applications, and would rely on the letter in relation to the question of costs.

18    On 14 February 2025, the Commonwealth sent a letter to Dr Burt enclosing a Notice of Offer of Compromise made pursuant to r 25.01 of the Federal Court Rules 2011 (Cth) and the principles in Calderbank v Calderbank [1976] Fam 93. The offer was that Dr Burt’s application be dismissed with no order as to costs. The offer was open for acceptance for 14 days after service.

19    The letter explained that the Commonwealth had already incurred costs in the preparation of evidence to date and would incur substantial further costs in relation to the application. The Commonwealth asserted that s 570 of the Fair Work Act would not protect Dr Burt from a costs order because (a) Dr Burt’s applications were being instituted without reasonable cause and therefore s 570(2)(a) would apply, and (b) his failure to accept the Commonwealth’s reasonable offer of compromise would constitute an unreasonable act causing the Commonwealth to incur costs and therefore s 570(2)(b) would also apply.

20    The letter set out a list of reasons as to why the Commonwealth considered Dr Burt’s application to have been instituted without reasonable cause. Of particular significance was the following paragraph, explaining why the Commonwealth contended that no substantial injustice would arise if leave to appeal were not granted:

The Judgment dealt with your application filed 4 August 2022 to strike out the Commonwealth’s interlocutory application filed 1 July 2022. You ultimately consented to orders that your claim be struck out …, which was the relief sought by the Commonwealth’s interlocutory application filed 1 July 2022. It was your decision to replead the claim and limit it to only group members engaged by the University of Sydney under either an Australian Postgraduate Award or a Research Training Program Scholarship from 23 September 2015 to 22 September 2021 …. There is therefore no nexus between the judgment and your decisions to restructure the class. In fact, in the Judgment (at [61]) her Honour specifically said she did not propose to deal with the question of whether you and the group members form a class for the purposes of maintaining a class action. At its highest, it can only be said that the judgment considered whether the Commonwealth’s case for striking out the statement of claim was not reasonably arguable. Her Honour found that the Commonwealth’s arguments about the pleadings were reasonably arguable (not that they would succeed) and that you did not seek to address in your submissions any of the points which had been raised with you in correspondence with the Commonwealth (at [41] of the Judgment). The unilateral steps you took after the judgment were entirely disconnected from your application filed 4 August 2022 [and] the judgment thereon. Given those steps, it cannot be said that injustice … would occur if leave were not granted.

21    By letter dated 17 February 2025, Dr Burt responded to the Commonwealth’s letters dated 23 January 2025 and 14 February 2025 and rejected the Commonwealth’s offer of compromise. Dr Burt addressed a range of matters, including the question of the substantial injustice that he contended would arise if leave to appeal were not granted. With the greatest respect to Dr Burt, his lengthy response on that topic did not address the real issue (namely, the capacity of an appeal of the primary judgment to change any of the matters about which he complained). Once again, Dr Burt’s focus appeared to be on attributing forensic decisions he had made to the primary judgment. He did not seem to grasp that unwinding those decisions could not be achieved (or advanced) by way of appeal, and rather required different applications (for example, an application to amend his pleadings) the prospects of which could not be improved by success on the proposed appeal.

22    The Commonwealth submits that the circumstances outlined above show that Dr Burt engaged in an unreasonable act by maintaining his applications, and thus causing the Commonwealth to incur unnecessary costs in defending them. In particular, that is because:

(a)    The Commonwealth’s letter dated 23 January 2025 gave Dr Burt fair warning of the lack of merit in his applications and that the Commonwealth may seek an order for its costs. Having had the position explained to him so clearly, along with the potential consequences, his decision to maintain the applications was an unreasonable act.

(b)    The unreasonableness of maintaining the proceedings was increased when Dr Burt rejected the Commonwealth’s offer dated 14 February 2025 to settle the proceedings. By rejecting that offer, in circumstances where the fundamental difficulty with the applications had once again been explained clearly, meant that Dr Burt acted unreasonably resulting in the Commonwealth incurring unnecessary costs.

23    The Commonwealth did not, as I understood it, rely on a further series of settlement discussions that occurred after this time. Dr Burt, however, did rely on those discussions for the purpose of demonstrating his own reasonable conduct, and the Commonwealth’s unreasonable conduct.

24    On 18 March 2025, Dr Burt sent an email to the Commonwealth inquiring:

Could you kindly let me know whether your client is willing to resolve NSD89/2025 on a discontinuance basis, with no order as to costs?

25    By email dated 19 March 2025, the Commonwealth replied setting out its reasons as to why it did not agree that no order as to costs should be made and proposed the following consent orders:

1. The application for extension of time and leave to appeal be dismissed.

2. The second respondent's costs be costs in proceeding (NSD987/2021).

26    In explanation of the second of those proposed orders, the Commonwealth stated that “[t]his would mean the Commonwealth’s cost position in the Appeal Application can be considered once the entirety of the main proceeding is determined”.

27    After the Commonwealth sent that email, Dr Burt filed his written submissions. The Commonwealth then sent a second email stating:

We note that you have now served your submissions although they were lodged with the Court before you would have received our email below.

Are you considering our offer or do you wish to reject it and proceed with the appeal application? We will have to shortly commence preparing our submissions which will lead to an increase in the Commonwealth's costs so it would be helpful to know your position as soon as possible.

28    By reply email dated 19 March 2025, Dr Burt stated, among other things, that he was considering the offer and asked the Commonwealth to indicate how long the offer remained open.

29    On 20 March 2025, the Commonwealth replied addressing a number of points raised in Dr Burt’s email of 19 March 2025 and stated as follows:

The Commonwealth is required to file its submissions and any evidence by 4 April 2025. Work to do so will need to begin shortly but in fairness, and to avoid potentially throwing away further costs, we are holding off on commencing that work until you have stated your position in relation to our costs offer.

Please indicate when you may have a response we will endeavour to try and keep the offer open until then.

30    By email dated 21 March 2025, Dr Burt wrote to the Commonwealth as follows:

In the efficient administration of the claim please find below proposed orders for your consideration to resolve this matter:

1. The application for extension of time and leave to appeal be discontinued.

2. The Second Respondent's costs to be costs in the proceeding (NSD987/2021).

3. The Second Respondent will write to the Commonwealth Finance Minister requesting that the Minister make an ex gratia payment to the Applicant in respect of the costs thrown away by reason of her Honour's decision in Burt v The Commonwealth of Australia (2023) FCA 55, on the grounds that her Honour acted with apprehended and actual bias towards the Applicant in determining her decision.

4. The Second Respondent will not object to, or seek any costs in respect of, the amendment of the pleadings in NSD987/2021 to refer to the Commonwealth's accessorial liability through reference to the statement published by the Department of Education that “pursuant to s51-10 of the Income Tax Assessment Act 1997 (Cth) scholarships paid to full time students for an educational purpose are tax exempt.”

I am still seeking advice in respect of the orders you earlier proposed, however, I would be prepared to agree the above orders immediately.

31    By email dated 24 March 2025, the Commonwealth advised that it did not accept Dr Burt’s offer. The Commonwealth reiterated its offer made in its email dated 19 March 2025 and stated:

We are required to commence work on the Commonwealth's submissions on 25 March 2025. When this further work commences the Commonwealth's costs will increase. As such, the Commonwealth's offer remains open for acceptance until 9am on 25 March 2025 (AEDST).

32    On the same date, Mr Burt replied stating, among other things, that he declined the Commonwealth’s offer.

33    Overall, I am not inclined to regard the discussions that took place from 18 March 2025 onwards as assisting either party. They do not alter the fundamental fact that, by 14 February 2025, the Commonwealth had, on two separate occasions, pointed out to Dr Burt the insoluble problem with his applications, and he chose to persist with them. He could have discontinued the applications at any point in time, whether or not pursuant to an agreement with the Commonwealth in relation to costs. Absent an agreement about costs, any application in relation to them would have been determined on its merits in light of the circumstances prevailing at that point in time. It follows that I place less emphasis on Dr Burt’s rejection of the Commonwealth’s settlement offer, and more on his decision to continue with a hopeless application even after the problems with it had been explained to him clearly on multiple occasions. I consider that conduct to comprise unreasonable acts and omissions that caused the Commonwealth to incur costs. It follows that the circumstance described in s 570(2)(b) also applies, and the discretion to order costs is enlivened on that basis as well.

costs: Discretion

34    Because the circumstances described in both ss 570(2)(a) and 570(2)(b) exist, the prohibition on ordering costs imposed by s 570(1) does not apply. The question then is whether the Court’s discretion in relation to costs should be exercised. Ultimately, I am persuaded that it is appropriate to order that Dr Burt pay the Commonwealth’s costs of the applications for the following reasons:

(a)    The fundamental reason that the applications were doomed did not depend on any assessment of the strength of a legal argument, or a debate about the facts that may be found. The basic problem with the applications was simply that they were pointless. Overturning the primary judge’s decision could never have achieved anything more than an order striking out the Commonwealth’s interlocutory application. That application had never been heard. There was no proposal that it would be heard. The subject matter of the application no longer existed, so it would have been pointless to hear it. Whatever Dr Burt might have wanted to achieve, he could never achieve it by appealing the primary judgment.

(b)    I bear in mind that Dr Burt is not a lawyer, and that self-represented litigants will often suffer from a “lack of knowledge of the law, unfamiliarity with court practice and, sometimes, lack of objectivity and want of lawyerly skills in reading and writing”: Spalla v St George Motor Finance Ltd (No 8) [2006] FCA 1537 at [20] (Kenny J). Dr Burt is plainly a very intelligent man, and I gained the impression that he was well able to understand even subtle legal issues. Nevertheless, he does not have the benefit of having the deep familiarity with the day-to-day operation of the Court system, and its procedures, that comes from being a practicing lawyer, and which would have allowed him to perceive immediately the misguided nature of his applications.

(c)    The problem with Dr Burt’s applications, however, was pointed out to him clearly and repeatedly. The disadvantage he was under as a non-lawyer ought to have been adequately compensated for by the clarity with which the Commonwealth highlighted the issue. The problem was practical and insurmountable. Dr Burt nonetheless persisted with his applications, and they met their inevitable fate. I do not find that he did so knowing that his applications were hopeless. Whether by reason of the lack of objectivity that is apt to accompany a self-represented litigant, because as a non-lawyer the significance of the issue simply eluded him, or for some other reason, I accept that he genuinely believed that his applications had reasonable prospects of success. But, as Hodgson CJ in Eq observed in Bhagat v Royal and Sun Alliance Life Assurance Australia Ltd [2000] NSWSC 159 at [13], in a passage cited many times in this Court (including, for example, in Ogawa v The University of Melbourne (No 2) [2004] FCA 1275 at [42] (Kenny J):

… I accept that a court does have to make allowances for the position of litigants in person, and to try to ensure that such a litigant does not lose out because of lack of expertise; although there is a limit to what the Court can do in that regard, while still remaining an impartial determinant of a dispute. The Court may in those circumstances refrain from making orders against litigants in person for conduct that might be considered as justifying orders for costs against represented litigants. By the same token, litigants in person can cause great hardship and expense to other parties, through making allegations and claims that lawyers would recognise as allegations and claims that could not reasonably or even properly be made, and through making proceedings much longer and much more expensive than they would otherwise be, by not focussing accurately on the real issues in the case. Conduct of that nature by legally represented parties would often lead to orders for indemnity costs. Litigants in person may escape the consequence of indemnity costs, but I do not think that the circumstance that a party is a litigant in person is a ground for displacing the ordinary result that costs follow the event.

(d)    This case involves, of course, the additional feature that the costs discretion falls to be exercised in the context of the application of s 570 of the Fair Work Act. I bear in mind that the general policy underlying that legislative provision, as I have mentioned above, is to ensure that the spectre of a costs order does not discourage litigants from the complete and robust advancement of their cases. It is thus only in a “clear case” that costs should be ordered. In my view, however, this is such a case. The utter futility of the applications, coupled with the patience and clarity with which the Commonwealth pointed out that fact (along with the availability of alternative means by which Dr Burt’s apparent objectives could be sought to be achieved), means that a costs order will not in any way discourage litigants from robustly advancing their cases in a legitimate way.

35    I am thus persuaded that Dr Burt should pay the Commonwealth’s costs of the applications.

Indemnity Costs?

36    The Commonwealth has also submitted that the award of costs should be on an indemnity basis from 14 February 2025 (the date of the Commonwealth’s offer of compromise).

37    It is well-established that, once the discretion to award costs has been enlivened under s 570 of the Fair Work Act, it includes a discretion to award indemnity costs: Sabapathy v Jetstar Airways (No 2) [2021] FCAFC 68 at [15] (Logan, Flick and Katzmann JJ). As Rares, Flick and Jagot JJ observed in Shea (No 2) at [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 [2007] HCA 56; (2007) 234 CLR 52 at 62-65 [24]-[34] per Gleeson CJ, Gummow, Hayne and Crennan JJ; Kazar v Kargarian [2011] FCAFC 136; (2011) 197 FCR 113 at 115-117 [2]-[9] per Greenwood and Rares JJ.

38    The fact that the occasion to consider the award of costs on an indemnity basis arises in the context of the application of s 570 is, however, relevant to the exercise of the discretion. As Mortimer J said in Ryan at [114]:

I have found on the evidence before the Court that, for the purposes of ss 570(2)(a) and (b) of the Fair Work Act, the proceedings against Mr Humphery-Smith were instituted without reasonable cause and the unreasonable conduct in joining Mr Humphery-Smith caused him to incur costs. Without more, those factors do not justify what would be, in substance, a second departure from the underlying policy evidenced by s 570 by a costs order at the level of indemnity costs. One theme which might be said to run through the factors listed by Harper J in Ugly Tribe [Co Pty Ltd v Sikola [2001] VSC 189], and by Sheppard J in Colgate-Palmolive [Co v Cussons Pty Ltd] (1993) 46 FCR 225; [1993] FCA 536, is a level of blameworthiness which involves conscious or deliberate choices to flout the norms by which litigation is usually conducted, and courts expect it to be conducted. I cannot be satisfied on the evidence before me that Mr McDonald’s conduct is attended by that level of disregard.

39    The observations of Rangiah J in Tamu v World Vision Australia (No 2) [2021] FCA 565 at [26] were to similar effect:

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.

40    There is no doubt in my mind that Dr Burt’s rejection of the Commonwealth’s offer of compromise, dated 14 February 2025, was objectively unreasonable. For the reasons I have already given, by that point the Commonwealth had articulated plainly the key reason why Dr Burt’s applications were destined to fail. The only consequence of failing to accept the offer was that the Commonwealth continued to incur costs. Accepting the offer would not have disadvantaged Dr Burt in any way: he could still have pursued any application he wished to unwind the forensic choices he had made since delivery of the primary judgment. Whether the primary judgment was overturned or not could not have made the slightest difference to the outcome of any such application.

41    For all that, however, I do not consider it appropriate to order that Dr Burt pay the Commonwealth’s costs on an indemnity basis. Like the unsuccessful applicants in Ryan and Tamu, the objective unreasonableness of Dr Burt’s conduct of the proceedings was not matched with any subjective appreciation of the hopelessness of his applications. Indeed, I accept that even to this very day, Dr Burt considers that the applications were reasonably arguable, and that his rejection of the Commonwealth’s offer was not unreasonable. In those circumstances, where I have been satisfied that the objective circumstances provide a sufficient basis upon which to make a costs order in what is ordinarily a no-costs jurisdiction, I am not persuaded that there is sufficient additional reason to depart further from the policy underlying s 570.

LUMP SUM COST ORDER

42    Finally, the Commonwealth sought, pursuant to r 40.02(b) of the Rules, a lump-sum costs order in the amount of $30,600.72 (which reflected its costs of the entirety of the proceeding on a party-party basis; a higher amount was sought in the event that indemnity costs were awarded). In support of these figures, the Commonwealth relied on an affidavit of its solicitor, which provided a breakdown of the costs it incurred.

43    The Commonwealth submitted that a lump sum cost order was appropriate for the following reasons:

(a)    the simplicity of a case makes such orders appropriate to save the parties the difficulties and inconvenience of a taxation: Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; Harrison v Schipp (2002) 54 NSWLR 738; [2002] NSWCA 213; Byrnes v Brisconnections Management Co Ltd (No 2) [2009] FCA 1432 at [51];

(b)    given that Dr Burt is self-represented, it is open to infer that he may lack the financial capacity such that the Commonwealth is unlikely to recover the costs of a taxation: Hadid v Lenfest Communications Inc [2000] FCA 628; Dunstan v Human Rights and Equal Opportunity Commission (No 3) [2006] FCA 916 at [29]; Salfinger v Niugini Mining (Aust) Pty Ltd (No 5) [2008] FCA 1119; and

(c)    these applications demonstrate Dr Burt’s tendency to litigate without basis and make grave allegations against judicial officers and the legal representatives of parties such that there is a risk he may abuse the taxation process: Soden v Croker (No 3) [2016] FCA 249.

44    Dr Burt did not make any submissions in opposition to the making of a lump sum cost order or the reasonableness of the cost amounts sought by the Commonwealth. That said, I would not take Dr Burt to have agreed with all of the reasons advanced by the Commonwealth in support of the order.

45    The purpose of awarding costs as a lump sum is “the avoidance of the expense, delay and aggravation involved in protracted litigation arising out of taxation”: Innes v AAL Aviation Ltd (No 2) [2018] FCAFC 130 at [12] (Tracey, Bromberg and White JJ). In fixing a lump sum, the Court “should be confident that the approach taken to estimate costs is logical, fair and reasonable”: Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 123 (von Doussa J). As Colvin J said in Sandalwood Properties Ltd v Huntley Management Ltd (No 2) [2019] FCA 647 at [12]:

There must be an appropriate basis for the Court to be able to make a judicial decision rather than a guess. Faux calculations that provide no real basis upon which to conclude that it is reasonable to assess a particular lump-sum as an appropriate amount to be paid pursuant to the Court’s costs order do not suffice. The process requires that there be a proper foundation for the lump-sum assessment, taking account that there is a trade-off between the risk of injustice in forming a conclusion as to a lump-sum on limited information and the likely injustice that flows from the costs and delay involved in undertaking a detailed assessment.

46    The evidence established that:

(a)    The fees charged by the Australian Government Solicitor were calculated on a costs recovery basis (that is, there was no profit component in the fees charged).

(b)    The hourly rates charged by Australian Government Solicitor employees were all significantly below the range of rates prescribed under Schedule 3 of the Rules.

(c)    Counsel’s fees also fell within the rates prescribed in the Court’s National Guide to Counsel’s Fees.

(d)    A 25% discount had been applied to all solicitors’ fees to allow for any solicitor client component of the Commonwealth’s costs.

(e)    All fees were claimed exclusive of GST.

(f)    Between January 2025 (when Dr Burt first foreshadowed these applications) and 14 February 2025 (when the Commonwealth served its offer of compromise), the Commonwealth incurred solicitors’ costs totalling $5,618.99 (taking into account the 25% discount). Those costs were incurred in analysing the issues raised on the applications, preparing evidence, corresponding with Dr Burt, and other necessary tasks.

(g)    Between 15 February 2025 and 16 April 2025 (the date of the hearing), the Commonwealth incurred:

(i)    Solicitors’ costs totalling $10,966.85 (taking into account the 25% discount). Those costs were incurred principally in preparing evidence and submissions, Court Books and authorities, corresponding with Dr Burt, and attending both a case management hearing, and the hearing of the applications themselves.

(ii)    Counsel’s fees totalling $8,508.80. Those costs were incurred principally in settling evidence, preparing submissions, and in preparing for and appearing at the hearing of the applications.

(iii)    Disbursements (relating to the preparation of hard copy materials for the Court, and transcript costs) totalling $642.30.

(h)    In relation to the application for costs, the Commonwealth incurred:

(i)    Solicitors’ costs totalling $2,947.12 (taking into account the 25% discount). Those costs were principally incurred in preparing evidence and submissions.

(ii)    Counsel’s fees of $1,916.66. Those costs were principally incurred in drafting submissions.

47    I am satisfied that this is an appropriate case in which to make a lump sum costs order. The confined nature of the applications, and the relatively modest amount of costs claimed, means that a full taxation of costs is likely to be entirely disproportionate, in both time and money, to the nature of the case. My conclusion does not depend on any assumption that Dr Burt would approach a taxation in anything other than a constructive way; rather, I am satisfied that even the most efficiently prepared and conducted taxation will involve undue time and expense.

48    Having carefully reviewed the evidence, I was not satisfied that the full amount claimed would be recovered on a taxation (even taking into account the fact that a 25% discount had been applied to the professional fees of the Australian Government Solicitor). I accept that the rates charged by both the Australian Government Solicitor and counsel are reasonable (if not low), and that work appears to have been performed by practitioners at an appropriate level of seniority. I was concerned, however, that the total amount billed did not correspond to the essential simplicity of the applications, and the analysis and work required to properly present the Commonwealth’s defence of them. The application was heard over a single afternoon, and did not raise any issues of particular complexity. The evidence relied upon was largely an assembly of correspondence and Court documents. Furthermore, the amounts incurred in relation to this costs application seemed to me to be higher than might have been expected, in light of the inherent features of the application and the evidence supporting it.

49    Fundamentally, of course, the aim is to “fix a sum that is proportionate to the nature of the case”: Sandalwood Properties at [10]. And so, taking a broad-brush approach, and without attempting the arithmetic precision that would occur on a taxation (see, e.g., Ginos Engineers Pty Ltd v Autodesk Australia Pty Ltd [2008] FCA 1051 at [23]), I have determined that it would be appropriate to apply a 30% discount to the professional fees of both the Australian Government Solicitor and counsel. In the decided cases where the approach of applying a discount to actual costs has been used, there is revealed to be a considerable variation in the percentage discount applied, and the expenses to which it is applied (see Sandalwood Properties at [14]). The basic purpose is to appropriately reflect the inevitable reduction that would be expected to occur on a taxation, and ensures fairness in circumstances where no such taxation has taken place: see, e.g., Seafolly Pty Ltd v Madden (No 6) [2015] FCA 1369 at [38] (Tracey J). It should not be taken as a comment on the appropriateness of any particular amount to which it is applied, but, rather, it a tool to produce an overall acceptable figure.

50    In light of the nature and complexity of the applications, having considered the evidence and written submissions prepared on behalf of the Commonwealth, having regard to the necessary “behind the scenes” work that would have been required, and having reviewed carefully the material in the affidavit upon which the Commonwealth relies, I am satisfied that the discount to which I have referred is likely to produce a sum that is proportionate to the nature of the case.

51    The calculations I have undertaken are as follows:

(a)    The total undiscounted professional fees of the Australian Government Solicitor were $26,375 (I arrived at this figure by grossing-up the amount claimed for party-party costs prior to 14 February 2025, which included a 25% discount, and adding to it the amount claimed for indemnity costs from 15 February 2025 on). Application of a 30% discount to that figure produces an amount of $18,462.

(b)    The total undiscounted fees of counsel were $10,424. Application of a 30% discount to that figure produces an amount of $7,296.

(c)    Disbursements were claimed in the amount of $642, to which I have not applied any discount.

(d)    The total of those amounts is $26,400.

52    Overall, therefore, I assess the costs payable by Dr Burt in a lump sum of $26,400.

Conclusion

53    For the foregoing reasons:

I am satisfied that the Court’s discretion to order costs is enlivened, on the basis that both ss 570(2)(a) and 570(2)(b) apply.

(a)    I am satisfied that it is appropriate to order Dr Burt to pay the Commonwealth’s costs of the applications.

(b)    I am not satisfied that it is appropriate to order that any part of the Commonwealth’s costs be assessed on an indemnity basis.

(c)    I am satisfied that it is appropriate to make a lump sum costs order.

(d)    I assess the lump sum payable in the amount of $26,400.

Associate:

Dated:    5 June 2025