Presumption against costs in FWA, but still possible

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Presumption against costs in FWA, but still possible

The FWA has clarified the position of the tribunal in relation to awarding costs against a party involved in litigation.

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The FWA has clarified the position of the tribunal in relation to awarding costs against a party involved in litigation.

[Full text of this case: D v Endeavour Industries Pty Ltd [2012] FWA 4687 (12 June 2012)]

The conclusion reached by Commissioner Lewin was that while costs are generally not awarded, an order for costs may be made in exceptional circumstances.

The legislation
 
The key provision is issue was s611 Costs, of the Fair Work Act 2009:
‘(1) A person must bear the person’s own costs in relation to a matter before FWA.
 
(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
 
(b) FWA is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
Note: FWA can also order costs under sections 376, 401 and 780.
 
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).’
Consideration of s611
 
The commissioner analysed the provision this way:
‘In this matter it is necessary to first consider what is comprehended by the meaning of the word “response” in the relevant statutory context of s.611.
 
It is pertinent to note that there seems to be no authority determined in relation to this question.
 
Some single member decisions of Fair Work Australia are referred to in the submissions, which go to the construction to be applied to the word response in the relevant statutory context.
 
It seems to me that to isolate the word response and to exclusively and unconditionally characterise a response as a formal expression of a position in relation to the jurisdiction of the Tribunal, the merits of an application or any offer of settlement is questionable.
 
In my view, the decisions referred to by the respondents are problematic for not having been decided in relation to whether a particular course of conduct could be properly considered vexatious or without reasonable cause. This is because the decision makers have voided such consideration by focusing on limited and particular definitions of what will constitute a response for the purpose of the relevant statutory provision.
 
For myself I think it necessary to consider whether the particular actions of a party fall within the compound meaning of a vexatious response, either of commission or omission, of position, expression of intention, avoidance of participation in proceedings or all three, as well any other relevant consideration …
 
I respectfully disagree with the conclusion in Ford v Fish Liquor Pty Ltd T/A Marina Quay International [2011] FWA 785 that abstention from proceedings under the Act cannot, under any factual circumstances, constitute a response for the purposes of s.611, if indeed that is what the decisions stands for …’
In this case . . .
 
In this matter, the commissioner was not convinced that conduct by a respondent in the course of proceedings in relation to an application under s365 was vexatious response:
‘In my view, the facts will determine the question in any particular case.
 
For example, a respondent who deliberately failed to attend a conference held as a result of an application under s.365 and who announced a contemptuous and obdurate refusal to participate in proceedings under the Act would, in my view, be behaving in a manner worthy of characterisation as a response to such an application.
 
In my view, such conduct may be viewed as vexatious. The intention and effect of the conduct would likely vex the applicant and may lead to steps being taken to compel the necessary attendance of the respondent. The conduct of the respondent would achieve little or nothing else but vexation, having regard to the nature of the proceedings …
 
Such conduct may, but would not necessarily, impose costs upon an applicant in obtaining the utility of the conference and a certificate pursuant to s.369 obligations of a party to an application under s.365. Rather, the outcome is either an agreement between the parties of their own choosing or the issuance of a Certificate pursuant to s.369, in order to make a general protections court application pursuant to s.371.
 
On the other hand failure to attend a conference by reason of misinformation, misadventure, mistake or relevant and unforeseen circumstance would not be vexatious ...’
Costs were not awarded here. The non-attendance at a conference was due to the administrators of the company deciding not to incur the expense of doing so having regard to their administrative function in relation to the available resources of the company.
 
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