Federal Court of Australia

Woods v T&F.S. Woods Pty Ltd [2025] FCA 1001

ORDERS

THE COURT ORDERS THAT:

1.    The Application for Extension of Time and Leave to Appeal dated 6 June 2025 be allowed.

2.    The applicant file and serve his Notice of appeal from the Federal Circuit and Family Court (Division 2), as annexed in draft form to the affidavit of Mr John-Anthony Hodgens affirmed 5 June 2025.

3.    This proceeding be referred to the National Operations Registrar for allocation of the hearing of the appeal.

4.    Costs be reserved.

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

REASONS FOR JUDGMENT

ROFE J:

1.    INTRODUCTION

1    The applicant commenced this proceeding by way of an Application for Extension of Time and Leave to Appeal dated 6 June 2025, seeking to review a decision of the Federal Circuit and Family Court of Australia (Division 2) in relation to costs, delivered on 22 May 2025: Woods v T & F.S. Woods Pty Ltd (No 2) [2025] FedCFamC2G 747 (Primary Judgment or PJ).

2    Following an initial rejection by the Court’s electronic filing system on the final day of the 14-day period, the application for leave was accepted for filing one day late, outside the period prescribed by r 35.13(a) of the Federal Court Rules 2011 (Cth), requiring the applicant to also seek an extension of time. The parties were able to resolve the issue of the extension between themselves and jointly sought orders to that effect, which I made on 17 July 2025.

3    Accordingly, the sole issue now before the Court is whether leave should be granted to the applicant under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) to appeal the Primary Judgment.

2.    BACKGROUND

4    The following factual background to the proceedings below is taken from the Primary Judgment, and from the materials presently before this Court.

5    The proceedings were commenced in December 2020, some three days after the making of a final settlement payment to the applicant pursuant to a Deed of Settlement executed on 27 November 2019, in relation to earlier Federal Court proceedings: PJ [7]−[12].

6    In July 2021, the applicant rejected an early offer extended by the respondent to settle the proceedings below: PJ [14].

7    In September 2021, the respondent filed an application seeking summary dismissal on the basis that the terms of the Deed barred the commencement of the below proceeding. The application was granted by Vasta J in December 2021: Woods v T & F.S. Woods Pty Ltd [2021] FedCFamC2G 369. The applicant proceeded to appeal the decision of Vasta J, and on 18 September 2023, Thomas J allowed the appeal, finding that it was, at the least, arguable and that the applicant’s claims were not barred by the Deed: Woods v T&FS Woods Pty Ltd (2023) 325 IR 464. The matter was remitted for hearing before Vasta J, who subsequently recused himself, after which it was allocated to the primary judge.

8    In February 2024, the applicant filed an amended statement of claim following the High Court’s reasons delivered on 9 February 2022 in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd (2022) 275 CLR 165 and ZG Operations Australia Pty Ltd v Jamsek (2022) 275 CLR 254. In those decisions, the High Court provided guidance on the approach to determining whether a relationship is one of employment. The amendments to the pleadings were made approximately two years later, during which time the proceeding below was held in abeyance pending the outcome of the applicant’s appeal against Vasta J’s decision to summarily dismiss the matter. The amendments were not opposed by the respondent.

9    On 29 July 2024, the applicant filed a Notice of Discontinuance, seeking to discontinue the whole proceeding.

10    On 23 August 2024, the respondent filed an interlocutory application seeking costs, amongst others, against the applicant pursuant to s 570(2)(a) and (b) of the Fair Work Act 2009 (Cth).

11    A sign of the hard fought nature of this proceeding is that the present costs dispute, rather than being heard on the papers, occupied two full days of hearing before the primary judge, on 18 November 2024 and 1 May 2025.

3.    APPLICABLE PRINCIPLES

12    The powers of the Court in granting leave to appeal decisions of an interlocutory nature are well established. The Full Court in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 23 IPR 1 at 3 (per Sheppard, Burchett and Heerey JJ) canvassed the test for granting leave to appeal from an interlocutory judgment, which comprises the following questions:

(1)    whether, in all the circumstances of the case, the decision is attended by sufficient doubt to warrant it being reconsidered by the Court; and

(2)    whether substantial injustice would result if leave were refused, supposing the decision to be wrong.

13    In Coshott v Official Trustee in Bankruptcy, in the matter of the Bankrupt Estate of Michael Petrovic Lenin (deceased) [2019] FCA 913 at [30], Stewart J explained that:

These two criteria, however, do not represent a “hard and fast rule” (Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [29] per Dowsett, Foster and Yates JJ), but they nevertheless provide “general guidance which the Court should normally accept” (Rawson Finances Pty Ltd v Federal Commissioner of Taxation [2016] FCAFC 95; 103 ATR 630 at [39] per Robertson, Moshinsky and Bromwich JJ).

14    In EBT17 v Minister for Home Affairs [2019] FCA 200, Burley J stated at [4] that the correct approach in assessing the proposed grounds of appeal is to consider them at a “reasonably impressionistic level” and assess whether each such ground is “sufficiently arguable” or has “reasonable prospects of success”, citing the observations of Mortimer J (as her Honour then was) in MZABP v Minister for Immigration and Border Protection (2015) 242 FCR 585 at [62]–[63]. Having regard to these principles, the Court must determine whether the Primary Judgment is attended with sufficient doubt to warrant reconsideration by an appellate court, and whether, if leave were refused, the applicant would suffer substantial injustice. In assessing whether the Primary Judgment is attended with sufficient doubt, attention must be directed to the Fair Work Act provision underpinning the primary judge’s power to make the impugned costs orders.

15    Section 570(2) of the Fair Work Act provides the following:

(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.

16    The primary judge was satisfied at PJ [28]–[30] that the applicant had not commenced the proceedings vexatiously or without reasonable cause, within the meaning of s 570(2)(a).

17    In line with the following explanation in Tran v Kodari Securities Pty Ltd (No 2) [2020] FCA 1819 at [27] (per Bromwich J), the present inquiry therefore turns on s 570(2)(b):

Once a claim is made that has not been shown to be brought without reasonable cause so as to fall within s 570(2)(a), the first alternative or additional basis for a costs order under s 570(2)(b) of an unreasonable act (or omission) causing the other party to incur costs needs to point to the act relied upon being in itself inherently unreasonable in some way…

18    In Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 3) [2017] FCA 810, Katzmann J considered the two-pronged test in s 570(2)(b), observing at [25]:

…That section relevantly provides that a party to proceedings relating to a matter arising under the Act may only be ordered to pay the costs incurred by another party if the court is satisfied that the first mentioned party’s “unreasonable act or omission” caused the other party to incur the costs: s 570(2)(b). In the present case that means that the Court only has the power to make the orders the Ombudsman seeks if two conditions are established. First, the Court must be satisfied that GPS, by its action(s) or omission(s), behaved unreasonably. That question is to be determined objectively: Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 392 at [32]. Secondly, the Court must be satisfied that GPS’s unreasonable act(s) or omission(s) caused the Ombudsman to incur costs. If those two conditions are established, the Court has a discretion to make a costs order against GPS and in the Ombudsman’s favour: Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 at [28].

19    Halley J further elaborated on the relevant principles that can be applied in relation to considerations under s 570(2)(b) in Heal v Sydney Flames Basketball Pty Ltd (No 2) [2024] FCA 794 at [71], although noting “that each application must be understood in its own context with respect to the specific circumstances in which it arose”. I adopt those principles here.

4.    PROPOSED GROUNDS OF APPEAL

20    The applicant’s Notice of appeal from the Federal Circuit and Family Court (Division 2), annexed in draft form to the affidavit of Mr John-Anthony Hodgens affirmed on 5 June 2025 (Draft Notice of Appeal), raises 14 grounds of appeal.

21    The grounds of appeal are focussed on PJ [37]−[40], which are set out below.

[37]    When a party commences a proceeding in this Court under provisions of the FWA, it is inferred that they do so with a resolution to bring their claim to a conclusion by and through the taking of steps as set out in the Rules of Court. The legislative scheme under the Act is that a party does so in accordance with the overarching principles of the Act. The filing by the applicant of a Notice of Discontinuance was an act devoid of a resolution on his part to have the issues in dispute in the proceeding finally determined by the Court.

[38]    Further, it is of significant note that after the filing of the Notice of Discontinuance, the applicant failed to personally swear to those issues raised against him by the respondent after the filing by the respondent of its costs application on 23 August 2024. The applicant’s response was via his solicitor, namely by the filing of the affidavits of John-Anthony Hodgens. In his affidavit filed on 31 October 2024, at [56] – [58] inclusive, Mr Hodgens deposed as follows, on an information and belief basis, as to why the applicant had brought his proceeding to an end:

56.     I have been informed by Mr Dreyer and the Applicant and I believe, including from review of the file maintained by Macpherson Kelley, that the Applicant's decision to discontinue the proceedings was informed by the following matters.

57.     As at 29 July 2024, being the date which the notice of discontinuance was filed by the Applicant, the Applicant had incurred significant billed legal costs, including those associated with the Appeal. In circumstances where the relief claimed by the Applicant totalled $982,773.76, the Applicant formed the view that, even if he was wholly successful, there would not be a beneficial commercial outcome, because it would be likely that:

a.     he would incur further legal costs of at least $200,000 to progress the proceeding to trial;

b.     there was concern that the Respondent would appeal a decision in favour of the Applicant, which would incur additional legal costs; and

c.     he would incur further costs of pursuing enforcement.

58.     I am further informed by Mr Woods and verily believe it to be true that in or around May 2024, Mr Woods dissolved his relationship with Mary Hawker. Ms Hawker swore an affidavit on 16 April 2021, which was filed in this proceeding on 19 April 2021. The dissolution of that relationship significantly undermined his desire and resolve to pursue the proceeding, in addition to the anticipated additional cost and time to resolve the dispute.

[39]    Mr Hodgens did not depose as to why the applicant did not personally depose to the matters set out in [56] – [58] of Mr Hodgens’ affidavit. Mr Hodgens did not depose that the applicant was either medically unfit to swear an affidavit, or that there was some other reason why the applicant had not personally deposed an affidavit going to the matters in issue. In such circumstances, the Court gives no weight to the evidence of Mr Hodgens at [56] – [58] of his affidavit. In such circumstances, the Court is left in the position of having no evidence of weight before it as to why the applicant discontinued his proceeding. The Court accordingly infers that the applicant had no good reason as to why he discontinued his proceeding. It may have been that the applicant did not depose an affidavit because he did not wish, at the hearing of the costs application, to be cross-examined on the matters put forward on his behalf by Mr Hodgens as justifying the filing on his behalf of a Notice of Discontinuance. It may have been that he was not prepared to swear on oath the reason why he decided to discontinue his proceeding. Either way, the actions and omissions of the applicant in that regard were contrary to the overarching principles and purpose of the Act contrary to the provisions of s. 190(1)(b), (2)(a) – (e), and s. 191(1) of the Act. Those acts and omissions constituted a failure on the part of the applicant to in any way justify his commencement, and early discontinuance, of the proceeding, and were unreasonable.

[40]    Having regard to the provisions of s. 191(4) of the Act, and s. 570(2)(b) of the FWA, the Court finds that it is satisfied that the applicant’s failure to adduce any evidence on the question as to why a s. 570(2)(b) costs order ought not to be made against him justified a finding that for the whole of the proceeding the applicant unreasonably caused the respondent to incur costs in resisting the applicant’s claims.

22    The proposed appeal is founded on the contention that the primary judge misconstrued and misapplied s 570(2)(b) of the Fair Work Act at PJ [37]−[40], including by reversing the onus of proof, and requiring the applicant to satisfy the Court that the criteria in s 570(2)(b) did not exist.

4.1    Applicant’s submissions

23    The applicant maintains that the primary judge’s determination on costs between the parties departed from the orthodox position of s 570(2)(b) of the Fair Work Act. It is the applicant’s contention that while the power conferred by this section is discretionary, and subject to the standard in House v The King (1936) 55 CLR 499, there are threshold issues that must be positively determined before the discretion may be exercised.

24    The applicant claims that the primary judge took irrelevant considerations into account which led to a harsh and unjust award of costs which he is now seeking to overturn by applying for leave to appeal. In the applicant’s view, and in response to the second prong of the leave test, the applicant maintains that the outcome of the Primary Judgment goes to the heart of a substantive right. The applicant would face substantial injustice without an opportunity to review the Primary Judgment, assuming that this decision is wrong. Preventing an examination of the decision and allowing it to stand without any scrutiny will, in the applicant’s submissions, lead to significant departure between s 570(2)(b) of the Fair Work Act and ss 37M, 37N and 43 of the Federal Court Act.

4.2    Respondent’s submissions

25    The respondent resists the grant of leave, contending that the applicant has misconstrued the Primary Judgment by incorrectly assuming that the costs order was made solely as a result of the discontinuance of the substantive proceedings. The respondent maintains that this was not the basis of the primary judge’s reasoning.

26    The respondent contends that the applicant’s submissions in relation to the standard in House v The King, that only one legally permissible conclusion is available to a judicial officer when determining whether a party’s conduct was unreasonable, is incorrect. Section 570(2)(b) requires the judicial officer to undertake an evaluative assessment of the reasonableness of a party’s conduct. Different decision-makers may reach different conclusions without any one of those decisions being legally erroneous: GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore (2023) 97 ALJR 857 at [16] (per Kiefel CJ, Gageler and Jagot JJ), applying Norbis v Norbis (1986) 161 CLR 513.

27    While the applicant maintains the primary judge took into account solely the matters leading up to the discontinuation of the proceeding, the respondent argues that this is not the case as in its view, the primary judge took into account the totality of the matter.

28    The respondent submits that the primary judge thoroughly examined the manner in which the applicant had conducted the proceedings prior to the discontinuance, and relies on the following observations made by the primary judge:

(a)    The proceeding was commenced three days after the applicant received the final payment from a previous proceeding (PJ [12]);

(b)    The proceeding had been on foot for a number of years (PJ [6(c)]);

(c)    The proceeding involved the filing of substantial material (PJ [6(a) and (b)]);

(d)    The proceeding had been the subject of a strike-out application and an appeal (PJ [16]–[17]), was confirmed to be ready for trial (PJ [33]), and was listed for a six-day hearing (PJ [31]–[32]); and

(e)    The proceeding was discontinued after three years and seven months, only weeks before the trial was due to commence (PJ [3], [6] and [31]).

29    Taking the above into account, the respondent submits that the primary judge was correct to reflect on this conduct against the principles embodied in s 190 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (Federal Circuit Court Act) in determining whether the discontinuation and the applicant’s conduct in general was bona fide.

30    The respondent advances that a proper reading of the Primary Judgment reflect his Honour’s wariness towards the applicant’s intentions and lack of resolve in prosecuting the proceedings below.

31    In assessing the reasonable prospect of the applicant’s success on his proposed grounds of appeal, I will briefly set out the parties’ submissions in respect to each ground.

4.3    Grounds 1 and 2 of the proposed appeal

32    By his first and second proposed grounds of appeal, the applicant alleges that the primary judge erred in his construction of s 570(2)(b) of the Fair Work Act when reading it in conjunction with ss 190 and 191 of the Federal Circuit Court Act which encompass the Court’s overarching purpose (the “overarching purpose provisions”). Having done so, the applicant submits that the primary judge imported an “impermissible gloss” by introducing notions for which there is no textual foundation or support from the legislative context of the Fair Work Act. Moreover, the applicant maintains that none of the matters taken into consideration at PJ [37]–[40] are axiomatically antithetical to the overarching purpose provisions.

33    The phrase “impermissible gloss” is used by courts where additional requirements have been imported into a statutory provision: Grant v Federal Commissioner of Taxation (1976) 135 CLR 632 at 636 (per Stephen J).

34    The respondent defends the primary judge’s construction and denies that any undue burden was placed on s 570(2)(b). In its submission, the primary judge’s approach was orthodox and consistent with s 191(4) of the Federal Circuit Court Act, which requires the Court, in assessing costs, to consider whether the parties have complied with their duties. The respondent submits that it is incumbent upon the Court to consider whether a litigant has properly engaged with the Court and fulfilled their responsibilities in promoting the quick, inexpensive and efficient resolution of proceedings, ensuring the efficient use of judicial and administrative resources, and achieving a resolution that is proportionate to the importance and complexity of the matters in dispute.

4.4    Grounds 3 to 8 and 12 to 13.

35    By his third ground, the applicant maintains that the primary judge introduced a subjective criterion in the task before him where 570(2)(b) is to actually be assessed objectively without consideration of a party’s actual state of mind, citing Australian and International Pilots Association v Qantas Airways Ltd (No 3) (2007) 162 FCR 392 at [32] (per Tracey J).

36     By his fourth ground, the applicant submits that the primary judge erred in putting an onus upon him to satisfy the Court that the criteria in s 570(2)(b) of the Fair Work Act did not exist.

37    The applicant submits that the primary judge demonstrated this error in his repeated references of the following phrases throughout the Primary Judgment:

    “failed to personally swear to those issues raised against him by the respondent” at PJ [38];

    “failure on the part of the applicant to in any way justify his commencement, and early discontinuance, of the proceeding” at PJ [39]; and,

    “failure to adduce any evidence on the question as to why a [s] 570(2)(b) costs order ought not to be made against him” at PJ [40].

38    By his fifth to seventh grounds, the applicant maintains that the primary judge erred by not having proper regard to his conduct as a whole through the course of the proceeding instead of treating the very fact of the discontinuance as an unreasonable act, citing Mortimer J’s (as her Honour then was) observations in Ryan v Primesafe (2015) 323 ALR 107 at [66].

39    With respect to the eighth ground, the applicant alleges that the primary judge erred in failing to make a proper finding on causation after determining that the applicant’s discontinuance of the proceeding was unreasonable. In particular, it is said that the primary judge did not determine whether the applicant’s conduct on 29 July 2024 caused the respondent to incur all or part of its costs since the commencement of the matter on 2 December 2020. The applicant further contends that the finding at PJ [40] did not amount to a proper finding on causation, and that the primary judge failed to provide adequate reasons explaining how the conduct justified an award of the respondent’s costs from the commencement of the proceeding.

40    In response to the above grounds, the respondent again advances that the applicant has misconceived the basis of the primary judge’s determination. The respondent contends that the primary judge relied on the discontinuance, and the absence of a sworn explanation for it, as factors in his Honour’s assessment of the applicant’s intentions in pursuing the litigation. The respondent posits that, in essence, the Court considered that confirming the matter was proceeding to trial, requiring the respondent to incur preparation costs, and the unexplained discontinuance on the “doorsteps” of a six-day hearing, were all indicative of litigation that was not pursued in good faith. The applicant did not produce evidence which displaced this view. The respondent advanced that it was the prosecution of the litigation without the will to proceed to hearing that caused it to incur costs.

4.5    Grounds 9 to 11

41    By these grounds, the applicant took issue with the little weight that the primary judge attributed to the affidavit of his solicitor, Mr John-Anthony Hodgens affirmed 31 October 2024 (Hodgens Affidavit). Mr Hodgens gave evidence that the applicant had formed the view that in light of the legal costs accrued, even if he were successful in the litigation, given the likelihood of any appeals, further costs in seeing the litigation to the end and any ensuing enforcement action would like not to be a beneficial outcome for him. Additionally, two months prior to the Notice of Discontinuance being filed, in or around May 2024, the applicant’s relationship with Ms Mary Hawker dissolved. Ms Hawker made one affidavit in the first instance matter dated 19 April 2021. Mr Hodgens also gave evidence that the dissolution of the relationship significantly undermined the applicant’s desire and resolve to pursue the proceeding.

42    In the applicant’s view, these were orthodox matters that ought to have been taken into account as the reasons were peculiar to him, formed part of ordinary human experience and there is no evident inherent reason why they would not likely be true. The applicant asserts that this evidence was cogent and probative as to why a costs order pursuant to s 570(2)(b) ought not to be made against him and yet it was not seriously considered.

43    On the contrary, the respondent submits that the primary judge accorded the evidence appropriate weight in circumstances where it was given by a solicitor who derived the information from discussions with a former employee, a review of file notes taken by others, his general experience as a solicitor, and limited discussions with the applicant personally. In the respondent’s view, the Hodgens Affidavit did not disclose the provenance of the explanation for the discontinuance; rather, it was an amalgam of information from multiple sources, synthesised by the deponent and sworn as a hearsay affidavit. Accordingly, the respondent maintains that the primary judge was correct to find the evidence unpersuasive.

4.6    Grounds 12 to 14

44    By his final few grounds, the applicant alleges that a proper reading of the Primary Judgment discloses that the primary judge did not address the argument advanced by him. The applicant sought any costs ordered to be assessed pursuant to r 22.09 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), while the respondent had sought costs to be assessed under r 22.02. Although the primary judge eventually opted to make the costs assessment order under the provision advanced by the respondent, the Primary Judgment failed to disclose any consideration of the competing positions and provide any indication as to why the order was made pursuant to r 22.02(2)(c).

5.    CONSIDERATION

45    The relevant “act or omission” considered by the primary judge for the purposes of s 570(2)(b) was the discontinuance of the proceeding, and the applicant’s failure to personally depose to the matters in the three paragraphs of the Hodgens Affidavit set out at PJ [38]. The primary judge gave no weight to Mr Hodgens’ evidence, which was based on information and belief from the applicant, and proceeded to infer that the applicant had no good reason as to why he discontinued the proceeding. The primary judge then engaged in adverse speculation as to possible reasons for the discontinuance (PJ [39]). Notably, the reasons given for discontinuance set out in the Hodgens Affidavit were not among those speculated upon. The respondent’s case in support of its request for costs pursuant to s 570(2)(b) was based on the following assertion made in its submissions:

These proceedings were brought as a step in a long-running family feud between brothers and their family business. After gaining his million-dollar pound of flesh from the Respondent company, the Applicant has brought these proceedings as a thinly veiled second bite at the proverbial cherry. On the eleventh hour, just before trial in this long-running lawsuit, the Applicant conceded that the entire claim was futile by discontinuing the proceedings.

46    On that basis, the respondent further asserted that, in those circumstances, it was for the applicant to file evidence to “displace this characterisation”. The primary judge appeared to accept that proposition, considering at PJ [38] that the applicant failed to personally swear a response to issues raised in the respondent’s costs submissions. The respondent referred to the primary judge raising the applicant’s failure to personally depose to the reasons for discontinuance on the first day of the costs hearing, submitting that the matter having been raised, the applicant could have provided such evidence and chose not to, hence the adverse inference was available.

47    The authorities cited by Mr Harding, the applicant’s counsel, support the notion that the consideration under s 570(2)(b) should be an objective one: see Pilots at [32]. The onus falls upon the respondent to satisfy the Court that the criteria under s 570(2)(b) exists, such that the Court should exercise its discretion to order the payment of costs: QNurses First Inc v Monash Health (No 2) [2022] FCA 277 at [11] (per Mortimer J, as her Honour then was).

48    The two principles discussed by Halley J in Heal of particular relevance to the present case at [71(b) and (c)] are:

(b)    if a claim has not been shown to be brought without reasonable cause so as to fall within s 570(2)(a), an alternative claim for a costs order under s 570(2)(b) needs to point to the act relied upon being in itself inherently unreasonable in some way; the filing of evidence in the ordinary way in relation to a claim that has not been shown to be brought without reasonable cause, albeit one that was abandoned, does not render the filing of that evidence an unreasonable act: Tran v Kodari Securities Pty Ltd (No 2) [2020] FCA 1819 at [27] (Bromwich J); and

(c)    an appellants’ late withdrawal of contentions does not amount to an unreasonable act or omission in circumstances where a respondent did not suggest that the withdrawn contentions were speculative or foredoomed to failure, or that the appellants deliberately or carelessly delayed their withdrawal; it is only when regard is had in combination, to both the timing of the withdrawal and the quality of the withdrawn contention and the circumstances in which the withdrawal was effected that it is possible to determine whether a particular withdrawal trespasses into the realm of unreasonableness: PIA Mortgage Services Pty Ltd v King (No 2) [2020] FCAFC 53 at [14]-[17] (Rangiah, Charlesworth and Snaden JJ)…

49    The primary judge did not explain why the applicant’s filing of the Notice of Discontinuance on 29 July 2024 caused the respondent to incur costs. The primary judge instead focussed on costs already incurred, introducing a concept of “resolution” not used in the overarching purpose provisions or s 570(2)(b) at PJ [37], and concluding that the proceeding was unreasonably commenced because it was not pursued by the applicant from the outset with an unwavering purpose or determination to see it through to judgment.

50    The findings at PJ [37], together with the comment at PJ [39] that the applicant had failed to in any way justify commencement of the proceeding, are in conflict with the primary judge’s finding at PJ [26] that the Deed did not preclude the applicant from advancing his claims, and at PJ [30], that the respondent had not established its claim under s 570(2)(a) that the applicant instituted proceedings vexatiously or without reasonable cause.

51    The primary judge’s earlier comments at PJ [6] as to the length of the proceeding and number of documents filed appear to overlook the respondent’s summary dismissal application, which occupied approximately two years and on which the applicant was ultimately successful. That oversight, together with the finding of Thomas J that the applicant’s case was “at least arguable” and the primary judge’s finding to like effect at PJ [26], does not sit comfortably with the primary judge’s conclusion at PJ [40] that the applicant’s failure to adduce evidence as to why a costs order should not be made against him justified a finding that “for the whole of the proceeding the applicant unreasonably caused the respondent to incur costs in resisting the applicant’s claims” (emphasis added).

52    Contrary to PJ [40], the applicant did adduce relevant evidence on the question of costs. The remainder of the Hodgens Affidavit dealt with the merit of the causes of action pleaded and covered the full course of the proceeding prior to its discontinuance. It does not appear from the reasons that the primary judge gave any consideration to that evidence.

53    With respect, at least to the impressionistic level appropriate for this application, it appears that the primary judge has misconstrued and misapplied s 570(2)(b) of the Fair Work Act, by reversing the relevant onus and engaging in a subjective analysis.

54    In Primesafe, Mortimer J noted at [64] that the discretion conferred by the confined terms of s 570(2) should be exercised cautiously. Her Honour then described at PJ [66]−[67] the reconciliation of s 570 of the Fair Work Act with the equivalent overarching purpose provisions in the Federal Court Act, being ss 37M and 37N, observing:

Section 570, and the conditions it imposes on the Court’s general costs discretion under s 43 of the Federal Court Act, is not a licence to parties to ignore the requirements of s 37M of the Federal Court Act, nor the Court’s power to order costs against parties who fail to comply with their obligations under s 37N. The content of ss 37M and 37N, and parties’ obligations to assist the Court in achieving the objectives set out in s 37M, must be reconciled with access to justice provisions such as s 570(1). That reconciliation occurs through a focus on the reasonableness of parties’ conduct, the appropriateness of the Court processes undertaken by them, the timeliness of their compliance with Court orders or steps in the proceeding, and the existence of a substantive legal and factual basis for the claims made and arguments put.

In express terms s 570(1) constrains this Court’s power to order costs against a party, and s 570(2) directs attention to the conduct of a party. Neither provision purports to affect the Court’s power under s 43(3)(f) of the Federal Court Act, whether exercised as a general discretion or by reason of the application of s 37N(2) and (5) and a failure by a lawyer to comply with her or his duties to the Court…

55    Aside from the filing of the Notice of Discontinuance and the applicant’s failure to personally depose to the reason for the discontinuance, the primary judge does not mention any conduct of the applicant during the proceeding that might offend the overarching purpose provisions in the Federal Circuit Court Act, such as a lack of timeliness in compliance with orders.

56    The primary judge undertook a somewhat one-sided consideration of the overarching purpose provisions at PJ [37], [39] and [40]. No regard was had to the saving of court resources and time that accompanied the discontinuance, nor the saved resources of the parties in not having to contest a six-day trial. The approach of the primary judge to the applicant’s discontinuance is antithetical to the purpose of the overarching purpose provisions. Parties should be encouraged to narrow the issues in dispute at the earliest opportunity. Finding parties to be devoid of resolution for not prosecuting to finality the case they commenced, does not sit with the overarching purposes set out in ss 190 and 191 of the Federal Circuit Court Act.

6.    CONCLUSION

57    For the reasons set out above, I consider that, in all the circumstances of this case, the primary judge’s decision is attended by sufficient doubt to warrant reconsideration by an appellate court, and that substantial injustice would result if leave were refused, assuming the decision to be wrong.

58    Accordingly, I will grant leave for the applicant to file his draft Notice of Appeal.

59    It is appropriate to make a further order reserving the costs at this stage, given that neither party made any submissions for costs of the application, and this matter is yet to heard in the appellate jurisdiction.

60    As with the ordinary course, this matter will be referred to the National Operations Registrar for allocation of the substantive hearing of the appeal.

Associate:

Dated:    21 August 2025