FEDERAL COURT OF AUSTRALIA Construction, Forestry, Mining & Energy Union v Employment Advocate [2001] FCA 1767 CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES AND BUILDERS' LABOURERS FEDERATION (QUEENSLAND BRANCH) UNION OF EMPLOYEES, JAMIE McHUGH, MICHAEL RAVBAR v JONATHAN HAMBERGER, THE EMPLOYMENT ADVOCATE Q6 of 2001 LEE, FINN & MERKEL JJ 14 DECEMBER 2001 CANBERRA (HEARD IN BRISBANE) IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY DISTRICT REGISTRY Q6 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FIRST APPELLANT AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES AND BUILDERS' LABOURERS FEDERATION (QUEENSLAND BRANCH) UNION OF EMPLOYEES SECOND APPELLANT JAMIE McHUGH THIRD APPELLANT MICHAEL RAVBAR FOURTH APPELLANT AND: JONATHAN HAMBERGER, THE EMPLOYMENT ADVOCATE RESPONDENT JUDGES: LEE, FINN & MERKEL JJ DATE OF ORDER: 14 DECEMBER 2001 WHERE MADE: CANBERRA (HEARD IN BRISBANE) THE COURT ORDERS THAT: 1. The application for costs be refused. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY DISTRICT REGISTRY Q6 OF 2001 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION FIRST APPELLANT AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES AND BUILDERS' LABOURERS FEDERATION (QUEENSLAND BRANCH) UNION OF EMPLOYEES SECOND APPELLANT JAMIE McHUGH THIRD APPELLANT MICHAEL RAVBAR FOURTH APPELLANT AND: JONATHAN HAMBERGER, THE EMPLOYMENT ADVOCATE RESPONDENT JUDGES: LEE, FINN & MERKEL JJ DATE: 14 DECEMBER 2001 PLACE: CANBERRA (HEARD IN BRISBANE) REASONS FOR JUDGMENT 1 On 18 October 2001 the four applicants were refused leave to appeal against declarations made by the trial judge that they each had engaged in conduct in contravention of s 298P(3) of the Workplace Relations Act 1996 (Cth) ("the Act"). The respondent, the Employment Advocate, now seeks an order for his costs in the matter against the four applicants, it being contended that the preconditions for such an order prescribed by s 347 of the Act have been satisfied, ie the proceeding was instituted "vexatiously or without reasonable cause": s 347(1). 2 By way of background we would note the following: (i) the declaratory orders sought to be challenged were interlocutory in character, the matter remaining to be determined being that of penalties under s 298T of the Act; (ii) it did not occur to either the applicants or the respondent that an appeal to this Court against those orders required leave and it was only the Court that raised the leave requirement; (iii) not only did the respondent not oppose the grant of leave, he also adopted the applicants' submissions in favour of leave being granted; (iv) leave was refused because, in the circumstances, all considerations of convenience pointed towards only entertaining an appeal against the declarations after the penalties determination had been made: see Construction, Forestry, Mining & Energy Union v Employment Advocate [2001] FCA 1442 at [16]-[18]; (v) in refusing leave, the Court indicated that the course taken by the applicants in seeking to appeal prior to the penalties determination, was one not to be encouraged; and (vi) though the parties presented argument on the merits of the appeal itself, they were well aware of the risk that leave might nonetheless be refused. 3 Section 347(1) of the Act provides: "A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause." 4 All that need be noted of this section for present purposes is that its object is to free parties from the risk of having to pay the costs of an opposing party, subject to a saving designed to protect a party against whom a proceeding (including an appeal) has been instituted vexatiously or without reasonable cause: see Ex parte Crozier [2001] FCA 1665 and the authorities referred to therein. Importantly while s 347(1) imposes a threshold condition to be met before a court is empowered to order costs, it confers no entitlement to costs if that condition is satisfied. The matter remains one of judicial discretion – a discretion in the exercise of which it is proper to have regard to the general policy of the Act that parties usually will be freed from the risk of an adverse costs order: Hatchett v Bowater Tutt Industries Pty Ltd (No 2) (1991) 28 FCR 324; Australasian Meat Industry Employees Union [No 2] v State of South Australia [1999] FCA 818. 5 The Employment Advocate's contentions are two-tiered. First, it is said that the actual appeal instituted by the applicants was instituted without reasonable cause for the reason that leave to appeal was not sought at that time. Secondly, when the application for leave was made, it also was made without reasonable cause as it then had no substantial prospects of success for the reasons given by the Court in refusing leave. 6 Given the respondent's conduct on the leave application, the applicants quite properly have challenged the opportunistic character of the contentions now being put by the Employment Advocate. 7 In our view the claim for costs is unsustainable. Insofar as it relies upon the applicants' failure to seek leave when the appeal was instituted, if the appeal for that reason was incompetent, that of itself would not warrant the conclusions both that the precondition of s 347(1) had been satisfied and that the discretion to award costs ought be exercised favourably to the respondent in the circumstances. 8 It is unnecessary for us to decide whether, on the question whether the orders were interlocutory or final, the applicants were so bereft of reasonably arguable grounds as to lead to the conclusion that the appeal was instituted without reasonable cause. Assuming without deciding that the precondition of s 347(1) has been satisfied, the circumstances are such that, consistent with the general policy of the Act, no order as to costs ought be made. The respondent did not raise the issue of incompetence; he was prepared to, and did, argue the merits of the appeal; and, once the need for leave was raised, he both supported the application and adopted the applicant's submissions thereon. Far from finding himself in a position that warranted his being accorded the protection by way of costs award envisaged by the saving in s 347(1), the respondent conducted himself vis-ŕ-vis the applicants in a manner consistent with the applicants being free of the risk of having to pay his costs. The Employment Advocate, after all, must be taken to know both the policy of s 347(1) and the consequent basis upon which litigation ordinarily is conducted under the Act. 9 Insofar as it relates to the application for leave, the costs claim must fail. That application failed because the applicants could not satisfy the Court that substantial injustice would result if leave were refused supposing the decision to be wrong. The reason for this was that the application was considered to be premature and that a challenge to the declaratory orders should await the making of the penalties determination. The applicants' contentions in support of the application were unsuccessful. But our conclusion did not of itself mean that the application itself was without reasonable cause. It could not be characterised as an abuse of process notwithstanding that the Court took the opportunity to discourage the making of like premature applications. 10 In any event, even if it be assumed that the application was hopeless and that the Court's costs discretion was enlivened, we would refuse to make such an order for the same reasons we gave above in relation to the claim in respect of the appeal itself. 11 The order of the Court will be that the application for costs is refused. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Lee, Finn and Merkel. Associate: Dated: 14 December 2001 Counsel for the Appellants: Mr S Crawshaw SC and Ms R Treston Solicitor for the Appellants: Quinlan Miller & Treston Counsel for the Respondent: Mr G Martin SC and Mr A Horneman-Wren Solicitor for the Respondent: Australian Government-Solicitor Date of Hearing: Written submissions of 22 and 29 November 2001 Date of Judgment: 14 December 2001