Federal Court of Australia

WorkPac Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation (Costs) [2026] FCA 1181

ORDERS

THE COURT ORDERS THAT:

1.    The applicant/cross-respondent pay the respondent/cross-claimant’s costs of, and incidental to, the determination of the separate questions, as agreed or assessed.

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

REASONS FOR JUDGMENT

YOUNAN J:

INTRODUCTION

1    On 8 July 2026, I published reasons for judgment in relation to separate questions submitted by the parties pursuant to r 30.01 of the Federal Court Rules 2011 (Cth): WorkPac Pty Ltd v Coal Mining Industry (Long Service Leave Funding) Corporation [2026] FCA 874 (separate questions judgment).

2    At the time of publishing my reasons, I made orders that the parties provide minutes of proposed orders (including in relation to costs), or, if the parties were unable to reach agreement on the orders to be made as to costs, that each party file written submissions, including a reply.

3    The parties were unable to agree on the orders to be made as to costs. Both parties filed written submissions on 22 July 2026, and submissions in reply on 29 July 2026. Having considered those submissions, I have determined that the respondent/cross-claimant should be awarded its costs of, and incidental to, the determination of the separate questions.

FACTUAL BACKGROUND

4    This matter concerns the administration of the Coal Mining Industry (Long Service Leave) scheme (the Scheme), a federal statutory scheme in relation to long service leave for employees in the black coal mining industry. The respondent, the Coal Mining Industry (Long Service Leave Funding) Corporation, administers the Scheme. The applicant, WorkPac Pty Ltd, is required to pay a levy into the Scheme.

5    By originating application dated 11 May 2022, WorkPac seeks inter alia a declaration that the Corporation administered the Scheme contrary to law.

6    On 1 May 2024, Justice Bromwich ordered that the Court determine separate questions submitted by the parties before determining other issues, pursuant to r 30.01 of the Rules, for which judgment was delivered. On 23 July 2026, WorkPac filed an application for leave to appeal from the separate questions judgment.

7    The factual background to the matter, and the operation of the Scheme, is set out in the separate questions judgment at paragraphs [1]–[42]. The salient aspects are noted below.

8    The dispute concerns the calculation of the levy that WorkPac is required to pay into the Scheme. That levy is calculated by reference to the “eligible wages” of an “eligible employee”: ss 4, 5 and 6 of the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 (Cth). “Eligible wages” are defined by reference to the employee’s “base rate of pay”: s 3B(3) of the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Cth).

9    The calculation of the levy raises two broad issues of construction: (a) how is the “base rate of pay” to be determined (“rates issue”); and (b) by what number of hours is the base rate to be multiplied (“hours issue”)?

10    The determination of the separate questions required consideration of the “rates issue” and the “hours issue”, by reference to ten sample “eligible employees” of WorkPac, who are representative of a cohort of WorkPac’s eligible casual employees (sample employees). The sample employees were each contracted under a Notice of Offer of Casual Employment (NOCE).

AWARD OF COSTS

Legal principles

11    There is no dispute as to the relevant legal principles; only their application.

12    The award of costs is discretionary: s 43(1), (2), (3) of the Federal Court of Australia Act 1976 (Cth) (FCA Act). Generally, the discretion is exercised in favour of the successful party: Foots v Southern Cross Mine Management Pty Ltd (2007) 234 CLR 52 at [25] (Gleeson CJ, Gummow, Hayne and Crennan JJ); Firebird Global Master Fund II Ltd v Republic of Nauru (No 2) [2015] HCA 53 at [6] (French CJ, Kiefel, Nettle and Gordon JJ). As stated by French CJ, Kiefel, Nettle and Gordon JJ in Firebird (at [6]) (footnotes omitted):

In any event, the preferable approach in this case is the one usually taken, that costs should follow the outcome of the appeal. This is not a case where it may be said that the event of success is contestable, by reference to how separate issues have been determined. There are no special circumstances to warrant a departure from the general rule, and good reasons not to encourage applications regarding costs on an issue-by-issue basis, involving apportionments based on degrees of difficulty of issues, time taken to argue them and the like.

13    In reliance on El-Debel v Micheletto (Trustee) (No 2) [2021] FCAFC 146 at [4] (Markovic, Derrington and Colvin JJ), where there has been mixed success, three aspects generally assume significance in guiding the exercise of the discretion:

First, an assessment as to whether one party has enjoyed real practical success. Second, a reluctance on the part of the Court to assess costs on an issue by issue basis because the Court has an eye to the interests of justice in bringing finality to the dispute and the diminishing returns involved in expending further time and costs in identifying the extent to which costs related to particular aspects of the conduct of the proceedings. Third, a preference for adjustments by way of percentage reductions made on a broad brush approach taking account of the degree of success and the likely extent of costs associated with that aspect of the case. As to these matters, see Firebird at [6]; Les Laboratoires at [297]-[305]; and Fuchs Lubricants (Australasia) Pty Ltd v Quaker Chemical (Australasia) Pty Ltd (No 2) [2021] FCAFC 114 at [15].

14    WorkPac submits that in assessing whether both parties have enjoyed “real practical success”, the time dealing with an issue (rather than its consequence or value) is the relevant consideration: Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (No 2) [2014] NSWCA 425 at [31] (Macfarlan JA, Meagher and Barrett JJA agreeing at [33], [34]); Xiao v BCEG International (Australia) Pty Ltd (No 2) [2023] NSWCA 87 at [9]–[12] (Gleeson JA, Mitchelmore JA and Griffiths AJA agreeing at [25], [26]); Rural Press Ltd v Australian Competition & Consumer Commission [2002] FCAFC 310 at [21]–[24] (Whitlam, Sackville and Gyles JJ). By way of example, WorkPac refers to Mount Bruce Mining (at [31]) and Rural Press (at [21]–[24]), as cases where costs orders were made to take account of the parties’ mixed success at trial. There is no doubt that that may be so (and any purported analogy belies the fact-specific nature of the enquiry), but the question remains whether an apportionment is warranted, and, if so, how it is to be measured or quantified.

15    WorkPac submits that any costs order made in an interlocutory proceeding will not ordinarily be taxable until the finalisation of the substantive proceeding: r 40.13 of the Rules. However, WorkPac accepts that the Court has discretion to order that costs be payable forthwith where it is in the interests of justice to do so (although WorkPac opposes any such order): Zaghloul v Woodside Energy Ltd (No 9) [2019] FCA 1718 at [20] (Colvin J); see also Watson v Kriticos (Costs Payable Forthwith) [2022] FCA 4 at [6]–[7] (Perram J). If such an order were to be made, WorkPac foreshadows that it would apply for a stay pending the determination of the application for leave to appeal. This issue ultimately does not arise, as the Corporation does not seek an order that costs be payable forthwith.

The parties’ submissions on costs

16    WorkPac’s primary position is that a costs order ought not be made, on that basis that it is premature in circumstances where: (i) WorkPac has filed an application for leave to appeal the separate questions judgment; and (ii) not all outstanding issues of liability have been determined.

17    However, in the event that the Court determines to make a costs order, WorkPac’s alternative position is that any such order should reflect that WorkPac achieved a measure of success on the disaggregation of casual loading in respect of the Eighth to Tenth NOCEs (i.e., the NOCEs pursuant to which the eighth to tenth sample employees were employed).

18    The Corporation’s primary position is that WorkPac should pay the Corporation’s costs arising from and incidental to the determination of the separate questions, and that the costs of the proceeding to date otherwise be reserved. I will hear the parties in due course on the disposition of the balance of the proceeding, including the question of costs to date.

WorkPac’s primary position: whether it is premature to make a costs order

19    WorkPac contends that a costs order is premature for two reasons.

20    First, WorkPac contends that in circumstances where it has filed an application for leave to appeal the separate questions judgment, a determination of costs may ultimately give rise to inefficiency, and would therefore be inconsistent with s 37M of the FCA Act. WorkPac seeks leave to appeal the Court’s determination in relation to: (i) the “hours issue”; and (ii) the Court’s findings in relation to the “All Purpose Loading” component of the Tenth NOCE. Subject to the outcome of that application (and any appeal, if leave is granted), WorkPac submits that a costs judgment made now may “fall away”.

21    The Corporation submits that costs should follow the event, and that it is neither appropriate nor necessary for the Court to await the outcome of the appeal process. The Corporation contends that, should WorkPac be successful on appeal, then it is possible that the Full Court may vary or vacate any costs award in the Corporation’s favour at first instance. However, the Corporation submits that it does not follow that a costs order at first instance should not be made at all.

22    The Corporation submits that the determination of the separate questions was a “significant hearing”, and it is appropriate for the Court to make orders, including as to costs, which follow from that hearing and determination. The Corporation submits that it may be more difficult to return to the question of costs in future when the relevant decision is “older in time”.

23    Second, WorkPac submits that the Court is not in a position to “fully assess the scope of the parties’ success”, on the basis that there remains an issue of liability in dispute. The issue is identified as whether WorkPac ought to pay “additional levy” ordinarily recoverable “by way of penalty” under ss 7 and 9 of the Collection Act. WorkPac submits that a costs order ought not be made until that outstanding issue is determined, on the basis that the costs expended by the parties in respect of the “hours issue” and “rates issue” overlap (at least to an extent) with the costs relevant to whether additional levy ought to be paid.

24    The Corporation submits that, irrespective of the outcome in relation to the “additional levy”, the Court “would not order any part of WorkPac’s orders sought in its Originating Application”, and would instead make orders in accordance with the Corporation’s amended statement of cross-claim (in respect of which the Corporation has been thus far successful). The Corporation contends that there is therefore a “proper basis” for WorkPac to pay the Corporation’s costs for the proceeding to date. However, having regard to the extant position in relation to the “additional levy”, the Corporation is amenable costs being ordered (only, at this stage) in respect of the separate questions.

WorkPac’s alternative position: mixed success

25    WorkPac submits that if a costs order is to be made, then any such order should reflect the fact that the parties enjoyed mixed success.

26    The Corporation submits that it is uncontroversial that, as a result of the separate questions judgment (and subject to any appeal), WorkPac has underpaid levy with respect to all ten sample employees. The Corporation’s position is that it enjoyed real practical success, and as such costs of and incidental to the determination of the separate questions should be awarded in its favour. The Corporation submits that the effect of WorkPac’s submissions is to argue costs on an issue by issue basis, contrary to the usual approach, and that costs ought to follow the event.

27    While the Corporation disputes that any departure from the usual rule is justified, in the event that the Court is to consider an apportionment of costs, the Corporation submits that WorkPac should pay at least 85% of its costs. In any event, the Corporation submits (and it is trite to say) that a strictly mathematic approach to costs is not an appropriate course.

The “hours issue”

28    It is common ground between the parties that, in relation to the “hours issue”, the Corporation had complete success with respect to all ten sample employees. WorkPac accepts that the Corporation should be awarded (what it terms) the hours issue’s 50% share of the costs on a party and party basis.

The “rates issue”

29    As regards the “rates issue”, the Corporation contends that it had complete success for seven out of the ten sample employees (i.e., those employees subject to the First to Seventh NOCEs). This was not disputed by WorkPac.

30    For the remaining three sample employees (i.e., those employees subject to the Eighth to Tenth NOCEs), the Court found that the employees’ “base rate of pay” was the “flat rate of pay” specified in the relevant sample NOCE, less the casual loading as specified in those NOCEs. Therefore, on this question, the Corporation submits that both WorkPac and the Corporation failed in their primary claims.

31    The Corporation contends that WorkPac succeeded “only partially” on its alternative claim, as articulated at paragraph [44] of its second further amended statement of claim. The Corporation submits that WorkPac “correctly contended for a reduction for casual loading, but incorrectly contended that the reduction was calculable by reference to the so-called ‘base rate’ in Schedule 2 of the 2019 [Enterprise Agreement]”. Paragraph [44] of the statement of claim relevantly states:

44.    At all material times during the operation of the 2019 EA, and for the purposes of the Scheme, the Base Rate of Pay of Flat Rate CMWs who were casual employees was:

(a)    the base rate of pay contained in Schedule 2 of the 2019 EA relevant to their classification level, as well as any incentive-based payments and bonuses paid to them;

(b)    in the alternative, the applicable flat rate of pay that they were paid as referred to in paragraph 43 less the casual loading that was a component of that flat rate of pay.

Particulars

The casual loading that was a component of the relevant flat rate of pay was 25% of the base rate in Schedule 2 of the 2019 EA that applied to the ‘eligible employee[s]’ classification level.

32    WorkPac, in its reply submissions, argues that it particularised that the relevant casual loading that could be disaggregated from a relevant contractual flat rate of pay was 25% of the minimum rate in Schedule 2 of the WorkPac Coal Mining Agreement 2019 (2019 Enterprise Agreement) for the equivalent classification. WorkPac submits that the Court, in the separate questions judgment, accepted that the 2019 Enterprise Agreement incorporated that relevant casual loading into an employee’s minimum flat rate of pay under the 2019 Enterprise Agreement (at [128]). WorkPac submits that the finding at paragraph [128], and the fact that the Eighth to Tenth NOCEs expressly specified the “equivalent quantum” of casual loading, together meant that those sums were not a contractual construct and were separately identifiable (separate questions judgment at [133] and [135]).

33    The Corporation submits that it succeeded “wholly” on its alternative claim (i.e., that the “base rate of pay” was the “flat rate” specified in the relevant NOCE, minus the specific amount for casual loading inserted into the relevant NOCE): cross-claim at [42(a)], [44(a)], [46(a)]. (In fact, this was the Corporation’s first alternative claim.) As such, the Corporation submits that the result on the alternative arguments was in its favour, or neutral.

34    WorkPac accepts that this outcome reflects one of the alternative formulations pressed by the Corporation, including in its cross-claim. However, WorkPac contends that the form of relief the Corporation notionally sought in respect of casual loading “did not accurately reflect the substance of its case”. WorkPac points to its statement of claim (at [44(b)]), in which it pleads, as an alternative (it is unclear whether it was posited ultimately as a second or third alternative), that the “flat rate of pay” was that prescribed under the 2019 Enterprise Agreement less the casual loading. WorkPac submits that this was denied in the Corporation’s defence (at [44]). (In fact, the denial is qualified by what the Corporation said further at paragraph [44(e)], i.e., that it had requested further particulars of this alternative case, which failed to identify which matters WorkPac intended to rely upon, and how those matters were intended to be relied upon.) Whilst this alternative was reflected in the Corporation’s cross-claim, WorkPac submits that this was merely a “fall-back position” for the Corporation. WorkPac contends that this was made clear in both written submissions and oral argument, in which the Corporation “strenuously” argued against its own alternative position.

35    Ultimately, WorkPac submits that applying the “broad brush approach” (El-Debel at [4]), and putting aside the question of “additional levy”, the costs associated with the “hours issue” and “rates issue” should be apportioned 50/50. This is on the basis that whilst the “rates issue” was more factually dense, the “hours issue” raised questions of construction attended by significant complexity. As noted above, WorkPac accepts that the Corporation should have a 50% share of the costs for the “hours issue” on a party and party basis. As to the balance of costs attributable to the “rates issue”, WorkPac contends that the Corporation ought to receive only three-fifths of its standard costs, and that this reduction fairly reflects the measure of success that WorkPac achieved in respect of the Eighth to Tenth NOCEs.

Assessment of costs on a lump sum basis

36    WorkPac submits that it is appropriate for the quantum of any costs to be assessed by a registrar on a lump sum basis pursuant to r 40.02(b) of the Rules. WorkPac requests that the Court make an order, pursuant to r 1.37 of the Rules, that a registrar determine the amount of lump sum costs in the manner that he or she sees fit, after the finalisation of the proceeding: Lal v Royal Australasian College of Physicians [2025] FCA 348 at [87]–[90] (Collier J).

37    The Corporation opposes this submission on the basis that this is not a matter “that might ordinarily be one in which a lump sum costs order would be made”, and as such submits that costs should be assessed in the usual way. It is not evident on what basis the Corporation makes this submission. The Corporation does not cite any authority in support of the proposition.

38    As the Corporation does not seek an order that costs be payable forthwith, it contends that any assessment as to costs or application for lump sum costs can be deferred for present purposes.

Consideration

39    As indicated above at paragraph [3], having considered the parties’ written submissions, I have determined that the respondent/cross-claimant should be awarded its costs of, and incidental to, the determination of the separate questions.

Appropriate to award costs at this stage of the proceeding

40    I consider it appropriate to make a costs order upon the determination of the separate questions, which is a discrete determination in the broader proceeding, albeit one that informs the disposition of the proceeding (i.e., that was the premise of the determination of the separate questions before the determination of other issues). As such, it is a significant determination and one that is readily susceptible to an assessment of costs. The fact that there is an outstanding issue of liability does not deny the discrete nature of the separate questions determination. It is to be observed that this outstanding issue of liability relates to the calculation of an “additional levy” recoverable by way of penalty under ss 7 and 9 of the Collection Act. As pleaded in the cross-claim (at [48]), the claim proceeds on the basis of liability for the payment of outstanding levy as a consequence of WorkPac not having paid the required amounts of levy with respect to the “eligible wages” of the sample employees.

41    The claimed overlap of costs expended by the parties in respect of the “hours issue” and “rates issue”, on the one hand, with costs relevant to whether “additional levy” ought to be paid, on the other, in my view, is not an argument against making a costs order at this point. The stated overlap does not signify that the costs incurred to date (in respect of the “hours issue” and “rates issue”) cannot be identified, and accounted for (presumably by deduction) in relation to any future resolution of the outstanding issue of liability, which, as the Corporation acknowledges (in the cross-claim at [48]) ought to be capable of resolution once other matters arising in the proceeding have been determined, viz., the “eligible wages” of the sample employees and the required amount of levy with respect to those wages.

42    This does not mean that the assessment (i.e., quantification) of costs should be made now. The Corporation does not seeks its costs forthwith, and in any event, WorkPac has sought leave to appeal the separate questions judgment, which application (and, potentially, appeal) will inform the timing of any such assessment. In my view, the fact that WorkPac has filed an application for leave to appeal the separate questions judgment is not an argument to forestall a costs order. Such an order should follow the event (where it is requested). The fact that the event may change upon appeal is not a reason to defer the costs order, especially in circumstances where the parties claim mixed success and the Court must therefore consider the measure and respective degree of success enjoyed by the parties. The primary judge is well placed to make that assessment. Should the application be granted and the appeal allowed, it is no less efficient for the Full Court to vacate or amend the costs order, as it is for the Full Court to make the order anew, and perhaps less convenient in the absence of the primary judge’s observations of the argument at first instance.

43    WorkPac’s argument that a costs judgment may “fall away” acknowledges a common reality of judicial disposition at first instance. That prospect is readily accommodated on appeal, and is not an ill to be avoided. The argument also assumes the inutility of a costs judgment from the perspective of the appellate court. That is not a safe assumption. Distance in time and place may make it more difficult to assess costs (in particular, the measure and degree of success enjoyed by the parties), in which case a primary costs judgment may serve a useful purpose on appeal.

The respondent/cross-claimant should be awarded its costs

44    I accept the Corporation’s submission that it enjoyed “real practical success” in the determination of the separate questions, such that it should be awarded its costs without apportionment in relation to the arguments on which it did not succeed.

45    While the Corporation did not win on every argument of construction that it advanced, its success was substantial and significant.

46    First, the Corporation succeeded in its core argument that WorkPac had underestimated (and therefore underpaid) the levy due on the “eligible wages” of the sample employees. That success resounded in the Court’s acceptance of the majority of its arguments.

47    Both the “hours issue” and the “rates issue” were matters of construction. While the latter may have been more fact intensive, those facts were not contested.

48    In relation to the “hours issue”, as stated above, it is common ground that the Corporation succeeded with respect to all ten sample employees.

49    In relation to the “rates issue”, the Corporation succeeded with respect to seven of the ten sample employees. For the remaining three sample employees, the success of the parties was mixed in that each succeeded on an argument proffered in the alternative, in circumstances where the parties had presented a number of tiered claims, descending their preferred to their least preferred outcome.

50    In that context, the fact that the Corporation’s alternative argument was a “fall-back position” says nothing more than that it was not the preferred outcome. Whether or not the Corporation argued “strenuously” against its own alternative position does not take the analysis far, at least, not unless it translates to time wasted, and costs thereby thrown away, by an argument that was not tenable. That was not the case in this proceeding. In any event, it is difficult for WorkPac to benefit from that claim in circumstances where WorkPac’s primary position was not vindicated.

51    Furthermore, WorkPac does not resist the proposition that it has failed in its primary claim (that the correct rate was the rate described as the “base rate of pay” in Schedule 2 of the 2019 Enterprise Agreement): statement of claim at [44(a)]. However, WorkPac takes issue with the Corporation’s submission that it succeeded only partially on its alternative claim (which correctly contended for a reduction for casual loading, but “incorrectly” contended that the reduction was calculable by reference to the so-called “base rate of pay” in Schedule 2 of the 2019 Enterprise Agreement). WorkPac submits that its contention was not incorrect, by reference to paragraph [128] of the separate questions judgment. However, that submission oversimplifies the finding at paragraph [128] by ignoring the context in which it was made (regarding the premise of WorkPac’s methodology of disaggregation) at paragraphs [96] et seq.

52    Second, the Corporation’s success was significant in that the Court “would not order any part of WorkPac’s orders sought in its Originating Application”, and would instead make orders consistent with the Corporation’s cross-claim (save for the outstanding and related issue of the “additional levy”, which is yet to be determined).

Rationale for lump sum costs not evident

53    WorkPac has not persuaded me that I should make an order that a registrar determine the amount of lump sum costs, after the finalisation of the proceeding. I have addressed the question of timing. As for the manner of costs, it is not evident in what respect a lump sum costs order would, in this case, promote cost effectiveness and efficiency. This is not made clear by reference to the decision of Collier J in Lal, on which WorkPac relies.

54    In any event, an application under r 40.02 of the Rules is available to a person who is entitled to costs. In this proceeding, for the reasons outlined above, that is not WorkPac.

55    The Court’s finding in this respect does not preclude the person who is entitled to costs (presently, the Corporation) from making application for a lump sum costs order at a later date. The Corporation does not seek such an order, and accepts that it can be deferred, for present purposes.

CONCLUSION

56    For the reasons outlined above, WorkPac should pay the Corporation’s costs of, and incidental to, the determination of the separate questions, as agreed or assessed.

Associate:

Dated:    20 August 2026