Federal Court of Australia

Grigorovich v Morgan Environmental Pty Ltd (No 2) [2026] FCA 1601

ORDERS

THE COURT ORDERS THAT:

1.    There be no order as to the costs of the proceeding reserved by the orders of the Court made on 22 July 2026.

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

REASONS FOR JUDGMENT

FEUTRILL J:

1    On 22 July 2026 judgment was pronounced dismissing the originating application for an order to transfer proceedings from the Federal Circuit and Family Court of Australia (Division 2) to this Court with costs reserved: Grigorovich v Morgan Environmental Pty Ltd [2026] FCA 966. Costs were reserved because the proceeding in the Circuit Court is a matter arising under the Fair Work Act 2009 (Cth).

2    Although s 43 of the Federal Court of Australia Act 1976 (Cth) confers a broad discretion on the Court to award costs, that power is constrained by s 570 of the Fair Work Act. Relevantly, 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

        …

(Note omitted.)

3    The orders of 22 July 2026 made provision for the parties to file and serve minutes of proposed orders, written submissions, and affidavits directed to the question of costs. Each party filed written submissions and an affidavit. The applicant’s submissions, in part, and affidavit purported to raise constitutional and other matters that were unrelated to the question of costs and, to that extent, have been disregarded. Otherwise, the question of costs may be dealt with without an oral hearing because there is no issue of fact relevant to the determination of the matter and the legal arguments can be dealt with adequately by written submissions: s 20A(2)(c)(ii) of the Federal Court Act.

4    The respondent contends that s 570(1) of the Fair Work Act does not apply to the transfer application. Alternatively, it submits that it should be awarded costs, in substance, on the ground that the applicant instituted the proceeding vexatiously or without reasonable cause or caused the respondent to incur costs by the applicant’s unreasonable act.

5    As already mentioned, this proceeding was an application to transfer a proceeding that the applicant had commenced in the Circuit Court to this Court under s 32AC of the Federal Court Act. Therefore, this proceeding was not itself a matter arising under the Fair Work Act but a matter arising under the Federal Court Act. However, that is not the end of the inquiry. The real question is whether this proceeding is ‘in relation to a matter arising under [the Fair Work Act]’ because it concerned an application to transfer a proceeding that was without doubt a matter arising under the Fair Work Act from the Circuit Court to this Court.

6    The respondent submits that the word ‘matter’ in s 570 of the Fair Work Act refers to claims, causes of action or their underlying controversies that are raised in the proceeding which is prosecuted in the court: Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; 229 FCR 221 at [156] (Tracey, Gilmour, Jagot and Beach JJ). Further, the test for determining whether a proceeding is ‘in relation to’ a matter arising under the Fair Work Act is whether the proceeding (here, this proceeding) relates to a right or duty sought to be enforced which owes its existence to a provision of the Fair Work Act: Gussen v Swinburne University of Technology [2026] FCA 39 at [32]-[33] (Hill J), citing Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (No 2) [2015] FCAFC 166; 235 FCR 366 at [11] (Dowsett, Tracey and Katzmann JJ) and Sabapathy v Jetstar Airways (No 2) [2021] FCAFC 68 at [6] (Logan, Flick and Katzmann JJ). Relying on these propositions and authorities, the respondent submits that properly characterised, an application to transfer a proceeding from one court to another does not seek to vindicate any right, remedy or liability under the Fair Work Act and has no effect on any underlying substantive rights. Therefore, that the proceeding in the Circuit Court is a matter arising under the Fair Work Act is insufficient to supply the necessary nexus because it is the mere circumstance that was a precondition to the transfer application. These submissions are not accepted.

7    The prepositional phrase ‘in relation to’ is indefinite and is of wide and general import. But, the phrase is usually taken to indicate some relationship or connection between two subject matters with the degree or closeness of the nexus to be determined by the applicable statutory context. Neither the context nor drafting history of s 570 of the Fair Work Act suggests the relationship should be narrow. Moreover, s 570 is remedial and beneficial and, therefore, should be interpreted beneficially and given ‘a fair, large and liberal’ interpretation: Joseph v Parnell Corporate Services Pty Ltd [2021] FCAFC 67; 284 FCR 546 at [107]-[115] (Logan, Katzmann and Snaden JJ); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union at [11] (Dowsett, Tracey and Katzmann JJ); Sabapathy at [6] (Logan, Flick and Katzmann JJ).

8    The respondent’s contention is founded on an unduly narrow interpretation of ‘in relation to’ and nexus between the matter arising under the Fair Work Act (the rights sought to be vindicated in the Circuit Court proceeding) and this proceeding. Taken to its logical conclusion the respondent’s argument would mean that any interlocutory application made in a Fair Work proceeding would lack the requisite nexus because the main proceeding is merely the precondition or circumstance that gives rise to the interlocutory application. Although an interlocutory application within a proceeding is a ‘proceeding’ for the purposes of s 570(1), an interlocutory transfer application made in the Circuit Court under s 153 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) for transfer of the proceeding in that court to this Court would plainly be a proceeding in relation to a matter arising under the Fair Work Act. The outcome cannot be any different merely because the interlocutory application is made in this Court rather than the Circuit Court.

9    Otherwise, none of the criteria that would enliven the power of the Court to make a costs order in favour of the respondent under s 570(2) of the Fair Work Act is met in this case. The transfer application was unsuccessful and the applicant may have achieved the outcome he sought (to have his claim determined in this Court) by an alternative means, but that does not mean that the transfer application was instituted vexatiously or without reasonable cause or should be categorised as an unreasonable act.

10    The transfer application engaged a discretionary power conferred on the Court that was not exercised for the reasons given in Grigorovich (No 1). None of those reasons suggest or could be understood as providing a foundation for considering that the application was vexatious or made unreasonably.

11    There will be no order as to the costs of the transfer application.

Associate:

Dated:    26 October 2026