1
Fair Work Act 2009
s.418 - Application for an order that industrial action by employees or employers stop etc.
Harbour City Ferries Pty Ltd
v
Maritime Union of Australia, The; Australian Maritime Officers' Union,
The
(C2014/3463)
COMMISSIONER CAMBRIDGE SYDNEY, 24 SEPTEMBER 2014
Application for costs - application refused.
[1] This Decision is made in respect to an application for costs made pursuant to s.611 of
the Fair Work Act 2009 (the Act). The application for costs was made on 24 March 2014, by
the Australian Maritime Officers’ Union (the AMOU).
[2] The application for costs arose from proceedings in the initiating application which
was made by Harbour City Ferries Pty Ltd (HCF) and taken under s.418 of the Act against
the Maritime Union of Australia (the MUA) and the AMOU. The s.418 application was
successful against the MUA but not against the AMOU.
[3] On 19 March 2014, an extempore Decision and Order was made at the conclusion of
the Hearing of the s.418 application. The MUA appealed that Decision and Order. The Full
Bench Decision1 on the appeal issued on 11 June 2014 refused permission to appeal.
[4] Subsequently, both the AMOU and HCF have filed documentary materials in support
of their respective, opposed positions on the application for costs. Neither the AMOU nor
HCF sought a Hearing on the application for costs, and this determination has been made
accordingly.
The Case for Costs
[5] The application for costs was advanced under sub-sections 611 (2) (a) and (b) of the
Act. Specifically it was asserted that the s.418 application, to the extent that it was taken
against the AMOU, had been made without reasonable cause and/or that it should have been
reasonably apparent to HCF that the s.418 application had no reasonable prospect of success.
[6] The AMOU sought to rely upon an unsigned statement of John Wydell dated 21 March
2014, which attached, inter alia, other signed statements which had been made in respect to
the s.418 proceedings, but which counsel for the AMOU did not wish to have admitted as
evidence during the s.418 Hearing2.
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DECISION
E AUSTRALIA FairWork Commission
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[7] According to the submissions made on behalf of the AMOU, the basis upon which
HCF made that part of the s.418 application taken against the AMOU did not involve any
evidence which would establish a reasonable cause and/or that could identify that there were
any reasonable prospects of success.
[8] In brief, it was submitted that at the time of making the application there was only
some hearsay observations made by one employee to another about the AMOU supporting the
MUA taking industrial action. Further, there was no evidence of any member of the AMOU
actually engaging in, or threatening to engage in, or organise, any industrial action. In
addition it was also submitted that by the conclusion of proceedings on 18 March 2014 (the
first day of Hearing), it should have been reasonably apparent to HCF that in so far as it
sought Orders against the AMOU, there were no reasonable prospects of success.
[9] Consequently, the AMOU application for costs was contemplated upon both
subsections 611 (2) (a) and (b) of the Act.
[10] In respect to subsection 611 (2) (a), it was submitted that at the time that the
application was commenced there was insufficient evidentiary foundation to take the
application against the AMOU. This insufficiency was said to be reflected in paragraph 8 of
the grounds attached to the s.418 application which provided the only mention of the AMOU.
Therefore it was submitted that subsection 611 (2) (a) of the Act had been satisfied in that
HCF had made the application, in so far as it was taken against the AMOU, without
reasonable cause.
[11] The submissions made on behalf of the AMOU also asserted that subsection 611 (2)
(b) of the Act had been satisfied because, in particular, during the proceedings, as statements
were exchanged between the Parties, it should have become reasonably apparent to HCF that
the application in so far as it was taken against the AMOU, had no reasonable prospects of
success. This proposition was said to have been supported by HCF withdrawing the only
evidence upon which it might have sought to rely in respect of the case against the AMOU.
This involved HCF redacting paragraph 25 of the statement of Darrin Moy3 together with the
relevant attachment “DM-5”.
[12] The AMOU submitted that subsection 611 (2) (b) was not, in its temporal application,
limited to the time that the application was made, but rather, was capable of application to a
time in the course of the proceedings where it became or should have become, reasonably
apparent, that the application had no reasonable prospects of success.
[13] In summary, the AMOU submitted that at the time of the making of the s.418
application, it was taken against the AMOU without reasonable cause and further, at or
shortly after the commencement of the Hearing on 18 March 2014, it should have been
obvious, let alone reasonably apparent, that the application had no reasonable prospect of
success in so far as it sought Orders against the AMOU. The AMOU asserted that HCF
belligerently continued to press for Orders against the AMOU long after there could have
been any rational or reasonable foundation for the pursuit of such Orders. Consequently, the
AMOU submitted that as the relevant provisions of s.611 of the Act had been satisfied, it was
appropriate that indemnity costs Orders be made against HCF.
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The Case against Costs
[14] The submissions made on behalf of HCF opposed the application for costs made by
the AMOU and asserted that the requirements of subsection 611 (2) of the Act had not been
satisfied in this instance. In particular, the submissions made by HCF rejected that the s.418
application was made without reasonable cause, or that it should have been reasonably
apparent to HCF that the application had no reasonable prospect of success.
[15] HCF submitted that the evidentiary basis upon which the s.418 application was taken
against the AMOU was to be found in paragraph 25 and annexure “DM - 5” of the statement
of Darrin Moy4. It was submitted on behalf of HCF that this material and other material
contained in statements that had been provided by the AMOU, supported an inference that the
AMOU would be involved in the unprotected industrial action of the MUA. Consequently,
HCF submitted that at the time of the making of the application there was a reasonable basis
for belief that the AMOU should be included in the application to stop unprotected industrial
action.
[16] In its further submissions HCF stated that the approach to whether HCF initiated
proceedings without reasonable cause must be considered at the time of instituting the
proceedings, 17 March 2014. Similarly, it was asserted that any assessment as to whether it
should have been reasonably apparent that the application had no reasonable prospect of
success had to be made at the time of filing of the application.
[17] In summary, the submissions made by HCF asserted that at the time that the s.418
application was made there was sufficient basis to include that it be taken against the AMOU.
Consequently, according to the submissions of HCF, it could not be said that the application
was taken without reasonable cause or that it would have been reasonably apparent, at that
time, that the application had no reasonable prospect of success. Therefore HCF submitted
that the provisions of subsection 611 (2) of the Act had not been satisfied and the Commission
should reject the AMOU application costs.
Consideration
[18] Although there are a number of different sections of the Act which deal with costs, the
application for costs in this instance was, appropriately, confined to s.611 which is in the
following terms:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the
FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of
the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first
person responded to the application, vexatiously or without reasonable cause;
or
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(b) the FWC 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: The FWC can also order costs under sections 376, 400A, 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).”
[19] The costs application made in this instance has sought to rely upon that part of
subsection 611 (2) (a) which involves an application taken without reasonable cause and
further, it has also sought to rely upon subsection 611 (2) (b) which involves the question of
whether it should have been reasonably apparent that an application had no reasonable
prospect of success.
General Approach to Costs
[20] The approach to consideration of any application for costs made under the Act should,
at the outset, recognise the significance of subsection 611 (1) and the implications that have
been established to flow from those particular provisions. In this regard it is relevant to refer
to a Full Bench Decision in the matter of E. Church v Eastern Health t/as Eastern Health
Great Health and Wellbeing5 and the following extract from that Decision is relevant:
“[26] Section 611 sets out a general rule - that a person must bear their own costs in
relation to a matter before the Commission (s.611(1)) - and then provides an exception
to that general rule in certain limited circumstances. The Explanatory Memorandum
confirms this interpretation of the section, it is in the following terms:
2353. Subclause 611(1) provides that generally a person must bear their own
costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in
certain limited circumstances. FWA may order a person to bear some or all of
the costs of another person where FWA is satisfied that the person made an
application vexatiously or without reasonable cause or the application or
response to an application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the
power to order costs against lawyers and paid agents under clauses 376, 401
and 780 which deal with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies
must not contravene a term of the order.
[27] In the context of s.570 and its legislative antecedents courts have observed that
an applicant who has the benefit of the protection of a provision such as s.570(1), (ie
the general rule that parties bear their own costs), will only rarely be ordered to pay
costs 5 and that the power should be exercised with caution and only in a clear case6.
https://www.fwc.gov.au/documents/decisionssigned/html/2014FWCFB810.htm#P148_17246
https://www.fwc.gov.au/documents/decisionssigned/html/2014FWCFB810.htm#P147_16991
[2014] FWC 6695
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In our view a similarly cautious approach is to be taken to the exercise of the
Commissions powers in s.611 of the FW Act.” [emphasis added]
[21] Consequently, it has been well established that there should be a cautious approach
taken in respect to any application for costs made under the Act. This caution operates to
establish an underlying reluctance to grant any application for costs and to only do so in
instances where a clear case has been made out to satisfy the exceptions to the general rule
that each side bear its own costs. Those exceptions are specified in subsections 611 (2) (a) and
(b) of the Act.
[22] In this instance the AMOU has asserted that in two respects the exceptions to the
general rule have been established.
Without Reasonable Cause and No Reasonable Prospect of Success
[23] Firstly, the AMOU has contended that at the time of making the application, 17 March
2014, HCF had an insufficient evidentiary foundation upon which to take the s.418
application against the AMOU. This was asserted to equate with the application being made
without reasonable cause and thus it was said to have satisfied the provisions of subsection
611 (2) (a) of the Act.
[24] The second basis upon which the AMOU asserted that the circumstances of this case
established an exception to the general rule that each party bear its own costs, involved the
redaction of the evidence that had been advanced by HCF as action of the AMOU (or its
members) which may have represented a contravention of s.418 of the Act. As was recorded
in the Decision at first instance, there was ultimately an absence of evidence upon which any
finding could be made against the AMOU. The absence of this evidence became apparent
during the proceedings when HCF redacted paragraph 25 and annexure “DM - 5” of the
statement of Darrin Moy. In these circumstances the AMOU contended that it should have
been reasonably apparent that the HCF application had no reasonable prospect of success and
thus satisfied the provisions of subsection 611 (2) (b) of the Act.
Without Reasonable Cause
[25] In respect to the first aspect advanced by the AMOU as basis for a costs Order to be
made, namely that HCF had taken the s.418 application against the AMOU without
reasonable cause, it is important to have regard for a number of factors surrounding the nature
of the application itself and its eventual success in respect to the other respondent, the MUA.
[26] In circumstances where unprotected industrial action threatened to disrupt the
employer's operation which, in this instance, involved Sydney Harbour public ferry services,
the understandable urgency with which an application might be framed can legitimately
provide justification for a degree of imprecision with certain grounds which might be included
in the application document. At the time of making the application, HCF would have been
understandably concerned about the apparent support being offered by the AMOU to the
MUA, albeit identified only by way of some flimsy hearsay.
[27] In such circumstances, for HCF to take the s.418 application against both the MUA
and the AMOU would appear to be a reasonable and realistic attempt to ensure that the
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application was comprehensive and able to achieve the obvious objectives involving
protection of the employer's commercial operation and avoidance of inconvenience to the
travelling public. Consequently, in these circumstances, despite only having some limited
hearsay foundation, the inclusion of the AMOU in the s.418 application could not be
construed as having been made without reasonable cause.
No Reasonable Prospect of Success
[28] I now turn to the second limb upon which the application for costs was advanced by
the AMOU, namely, that it should have been reasonably apparent to HCF that the application
had no reasonable prospect of success. This aspect of the application for costs has
concentrated upon the circumstances that became apparent during the course of the Hearing
on 18 and 19 March 2014.
[29] There would appear to be strong persuasive force to the argument that upon the
redaction of the only evidentiary material that HCF could rely on in respect to any action by
the AMOU (or its members) that may be in contravention of s.418, it became manifestly clear
that the application in so far as it related to the AMOU, had no reasonable prospect of success.
[30] Upon careful analysis I believe that this contention made by the AMOU must be
correct. At that point in time during the proceedings on 19 March6 when Mr Price, who
appeared for HCF, closed the evidentiary case, having earlier redacted the only evidence upon
which any reliance could have been placed as basis for Orders to be made against the AMOU,
it became obvious that the application had no reasonable prospect of success insofar as it was
taken against the AMOU.
[31] At this point during the proceedings the Commission provided a short adjournment to
allow Mr Price to obtain instructions as to whether the application was continued to be
pressed against the AMOU. After the short adjournment, HCF advised that it maintained the
application against the AMOU despite there being no evidence to support that part of its s.418
application taken against the AMOU.
[32] The circumstances which then resulted were regrettable and reflected poorly upon the
conduct in the proceedings of both HCF and the AMOU. HCF pressed that part of its
application which sought Orders under s.418 against the AMOU without any evidence to
support that part of its application. Counsel for the AMOU had earlier advised that he had
been instructed not to give any undertakings that the AMOU or its members would not take
any unprotected industrial action. Neither HCF nor the AMOU appeared to be prepared to
take even the slightest conciliatory step towards what would have been a simple clarification
that the AMOU had not, and would not, engage in conduct in breach of s.418 of the Act. As a
result, those representing HCF and the AMOU provided an unfortunate and somewhat
disobliging performance.
[33] The position which had been reached during the proceedings on 19 March 2014 was
regrettable and reflected poorly on both Parties. However, it had become clear that, at that
point in time, in the absence of any evidence, there was no case that could be made out
against the AMOU. At this point in time subsection 611 (2) (b) of the Act had been satisfied.
It should have been reasonably apparent to HCF that the application in so far as it was taken
against the AMOU, had no reasonable prospect of success.
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[34] It would appear therefore, that as the exception to the rule established by subsection
611 (2) (b) of the Act had been met, a costs Order in respect of all costs from that point in
time should be made against HCF. I would be inclined to make such an Order but I believe
that I am unable to do so because of the Full Bench authority established for the interpretation
of s.611.
[35] A Full Bench of the Commission in the matter of Qantas Airways Limited v Mr Paul
Carter7 interpreted the provisions of s.611 of the Act and in respect to the particular point in
time at which the exceptions to the general rule found in subsections 611 (2) (a) and (b) are to
be contemplated stated:
“ [20] It is clear from the terms of s.611 of the Act that the point at which the
Commission must determine whether or not Qantas' application to appeal was
vexatious, without reasonable cause or had no reasonable prospect of success, is when
Qantas made the application to appeal.”
[36] Consequently, it would appear that the general rule on costs established by s.611 of the
Act operates in a fashion which confines the exemptions to the general rule which are
prescribed by subsections 611 (2) (a) and (b), to be determined in respect to the circumstances
at the time that an application is made. Therefore it would seem to be an irrelevant
consideration to the operation of the exception established by subsections 611 (2) (b) that
during the course of proceedings circumstances were revealed which made it apparent that the
application then had no reasonable prospect of success. Expressed alternatively, any
determination as to whether it should have been reasonably apparent that an application had
no reasonable prospect of success is confined to an assessment of the circumstances at the
time that the application was made.
[37] Therefore in this instance the circumstances that existed on 17 March 2014, when
HCF made the s.418 application, could not be found to satisfy subsection 611 (2) (b) of the
Act. Although it was acting upon limited hearsay information, at the time of making the
application it would not have been reasonably apparent to HCF that there was no reasonable
prospect of success of the application as it applied to the AMOU. Subsequently the position
changed but that is not a relevant consideration for the purposes of s.611 of the Act.
Conclusion
[38] The application for costs which has been made pursuant to s.611 of the Act has been
advanced on the basis that the requirements of subsections 611 (2) (a) and (b) were met and
therefore costs should be Ordered in favour of the AMOU.
[39] In respect to subsection 611 (2) (a) of the Act, an analysis of the circumstances at the
time that the application was made, when combined with the nature of the relief sought and
ultimately obtained against one of the respondents, has confirmed that the application was not
made without reasonable cause.
[40] At a point in time after the application had been made it became apparent that the
application had no reasonable prospect of success in so far as it was taken against the AMOU.
However, for the purposes of subsection 611 (2) (b) of the Act, any determination as to
whether it should have been reasonably apparent to the applicant that the application had no
reasonable prospect of success is to be made in respect to the circumstances at the time that
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the application was made and not at some subsequent point in time. Therefore, for the
purposes of subsection 611 (2) (b) of the Act, there can be no finding made that at the time
that the application was made, it should have been reasonably apparent to the applicant that
the application had no reasonable prospect of success in respect to the AMOU.
[41] Consequently, the requirements of subsections 611 (2) (a) and (b) of the Act have not
been satisfied. Therefore the general rule established by subsection 611 (1) of the Act, that
each Party bear its own costs, is not disturbed by the exceptions provided in subsection 611
(2) and the application for costs must be refused.
[42] For the reasons that are set out above the application in this matter is refused and an
appropriate Order is issued accordingly.
COMMISSIONER
Appearances:
Mr S Price, solicitor from Corrs Chambers Westgarth Lawyers, on behalf of the applicant.
Mr A Howell, appearing on behalf of the AMOU
Final written submissions following appeal:
2014.
Sydney:
June: 23.
Printed by authority of the Commonwealth Government Printer
Price code C, PR555825
1 [2104] FWCFB 3858.
2 Transcript of proceedings (18 March 2014) @PN419-PN426.
3 Exhibit 1.
4 Exhibit 1.
5 E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810.
6 Identified in transcript of proceedings (19 March 2014) as circa PN403.
7 Qantas Airways Limited v Mr Paul Carter [2013] FWCFB 1811.
