FEDERAL COURT OF AUSTRALIA Finance Sector Union of Australia v Commonwealth Bank of Australia [2002] FCA 1166 COSTS – costs under s 347 of the Workplace Relations Act 1996 (Cth) – whether a matter is a proceeding in a matter arising under the Act – where matter remitted following orders of a Full Court – where Full Court judgment resulted in likelihood of dismissal. Workplace Relations Act 1996 (Cth) s 347 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 referred to Shackley v Australian Croation Club Ltd (1996) 141 ALR 736 referred to Susaki v Minister for Immigration and Multicultural Affairs [2002] FCA 1007 referred to FINANCE SECTOR UNION OF AUSTRALIA v COMMONWEALTH BANK OF AUSTRALIA N 262 of 1999 MOORE J 20 SEPTEMBER 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 262 OF 1999 BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA FIRST APPLICANT KENNETH MACEY SECOND APPLICANT AND: COMMONWEALTH BANK OF AUSTRALIA RESPONDENT JUDGE: MOORE J DATE OF ORDER: 20 SEPTEMBER 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application for costs be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 262 OF 1999 BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA FIRST APPLICANT KENNETH MACEY SECOND APPLICANT AND: COMMONWEALTH BANK OF AUSTRALIA RESPONDENT JUDGE: MOORE J DATE: 20 SEPTEMBER 2002 PLACE: SYDNEY REASONS FOR JUDGMENT 1 The Commonwealth Bank of Australia has applied for costs in relation to directions hearings on 2 and 30 July and 15 August 2002, a notice of motion filed in Court on 30 July 2002 and related preparation. The application for costs, in my opinion, should be dismissed. 2 A proceeding was commenced, as a representative proceeding, by the filing of an application by the applicants on 1 April 1999. It became N 262 of 1999. It involved claims that the respondent had breached an award and had also breached an unregistered industrial agreement. On 18 June 1999, the then docket judge, O'Connor J, ordered that there be a separate trial of the question "of the application of an alleged breach of" the relevant clause of the award. That is, whether the award had been breached as alleged. The proceeding continued on that basis. I determined this issue in favour of the applicants on 16 November 2001. The respondent successfully appealed and on 18 June 2002 the Full Court made the following orders: "1. Leave to appeal is granted. 2. The appeal is allowed. 3. The orders below are set aside and, in lieu thereof, order that the claims for relief in paragraphs 1, 2 and 3 of the application are dismissed and the proceeding otherwise be remitted to the primary judge." The claims for relief in paragraphs 1, 2 and 3 were: "1. Pursuant to s 178 of the Workplace Relations Act 1996 ("the Act") the imposition of a penalty on the Commonwealth Bank of Australia ("the Respondent") for breach of clause 42 of the Commonwealth Bank of Australia Officers Award 1990 ("the 1990 Award"). 2. Pursuant to s 356 of the Workplace Relations Act 1996 an order that the penalty imposed under order 1 above be paid to the First Applicant. 3. Pursuant to s 178(6) of the Act an order that the Respondent pay to each of the employees including the Second Applicant the amount which is owing to them under clause 42(g) of the Award." The residue of the application, as described by the Full Court, was: "The second strand of the proceeding was a claim for damages for breach of contract, based upon an agreement between the FSU and the Bank known as the Redundancy Redeployment and Retrenchment Agreement 1990 ("the 1990 Agreement") which, it was alleged, was incorporated into the contracts of employment of each of the group members. The 1990 Agreement contained provisions in relation to redundancy, redeployment and retrenchment which were identical with those of the Commonwealth Bank of Australia Officers' Award 1990 ("the 1990 Award") insofar as redundancy and redeployment were concerned, but which, it is said, provided greater benefits upon retrenchment. It is accepted on behalf of the respondents to this application that, in a practical sense, a decision upon the separate question relating to the 1990 Award is likely to resolve all of, or at least the significant, issues in that part of the proceeding which relates to the 1990 Agreement. (Emphasis added.) 3 Section 347 of the Workplace Relations Act 1996 (Cth) ("the Act") provides: "A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application s 170CP) shall not be ordered to pay costs incurred by another party to the proceeding unless the first mentioned party instituted the proceeding vexatiously or without reasonable cause." 4 Relevantly, for present purposes, the parties (as that expression first appears in s 347) are the applicants in N 262 of 1999. Two questions arise in determining the operation of this section on the costs order sought by the respondent. The costs relate to three directions hearings in N 262 of 1999 after the orders were made by the Full Court, the filing of a notice of motion in that proceeding seeking its summary dismissal and related preparation. One question which arises in determining whether s 347 applies and its effect, is whether all or any of the events for which a costs order is sought is not a proceeding in a matter arising under the Act. If they are all a proceeding in a matter arising under the Act, or steps in such a proceeding, another question that arises is whether the applicants instituted the proceeding vexatiously or without reasonable cause. 5 A proceeding was instituted on 1 April 1999 when the application was filed by the applicants. The directions hearings on 2 and 30 July and 15 August 2002 were directions hearings in that proceeding (I put to one side that also listed was another proceeding, N 1068 of 2000). When commenced, it was a proceeding in a matter arising under the Act. In determining whether it was instituted vexatiously or without reasonable cause one looks to circumstances existing at the time the proceeding was commenced: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264. It is not and cannot be suggested that that proceeding was instituted vexatiously or without reasonable cause. 6 The hearings in July and August 2002 did not entail the institution of some further proceeding notwithstanding that, by operation of the orders of the Full Court, part of the application had been disposed of leaving a residue that had to be dealt with by orders which would need to be made by me as the primary judge. Inevitably, as a result of order 3 of the Full Court, the application had to be relisted before me. It was by operation of that order coupled with the fact that there were no extant orders dealing with the residue of the application, that the proceeding continued. I rather think that the detailed submissions of the respondent on the question of costs which address the issue of what is a "matter arising under (the) Act" are not really to the point. When the proceeding was instituted it did concern, on any view, a matter arising under the Act. It would be necessary for the respondent to demonstrate that the proceeding lost that characteristic after the orders were made by the Full Court. It is true that the part of the matter (that is, the entire justiciable controversy) which concerned an alleged right which owed its existence to the Act, was resolved by the orders of the Full Court. But that did not mean that the proceeding that had earlier been instituted was, in some way, transmogrified in any relevant legal sense. It was open to the Full Court to make the orders it did (and the orders I earlier made which were the subject of the appeal), because of the earlier order made by O'Connor J. However that was an order made under O 29 in the proceeding instituted on 1 April 1999. Such an order simply permits or authorises the determination of a particular issue or issues in a proceeding. That is what occurred, ultimately, when the Full Court gave judgment. The Full Court determined the particular issue to which the order of O'Connor J related. 7 It may be accepted that having regard to the history of the matter there was real prospect, after the judgment of the Full Court, that orders would fairly promptly be made dismissing so much of the application that remained after the orders of the Full Court. However these events do not, in my opinion, reveal, with perhaps one exception, that I was dealing in July and August 2002 with anything other than the proceeding instituted on 1 April 1999. 8 The possible exception was the notice of motion filed by the respondent seeking, summarily, an order that the "proceedings be dismissed". The notice of motion may possibly be viewed as a proceeding for the purposes of s 347 and more generally: Shackley v Australian Croation Club Ltd (1996) 141 ALR 736. If the notice of motion was not a proceeding arising in a matter under the Act (a matter of potentially some complexity I need not decide though am inclined to think that it was a proceeding arising in a matter under the Act) then no costs should be awarded because I was never called on to determine it: see Susaki v Minister for Immigration and Multicultural Affairs [2002] FCA 1007 and the cases cited therein. While there was a real chance the orders sought by the respondent would have been made had the notice of motion been heard, the applicants may have had a basis for resisting orders being made summarily notwithstanding the way in which the litigation had been conducted to that point. In addition, the notice of motion was filed on 30 July 2002 and on the next occasion the proceeding was before the Court self-executing orders were made, by consent, dismissing the application. I should add that if the legal conclusion I earlier expressed in [6] above is wrong and s 347 had no application at all to any of the events occurring after the judgment of the Full Court, I would, for the reasons just given and as a matter of discretion, make no order as to costs. That is because I never determined whether the assumption underlying the position adopted by the respondent in that period (that the residue of the application inevitably and necessarily should be dismissed without any further hearing) was correct. 9 If the notice of motion of the respondent filed in Court on 30 July 2002 seeking an order that the "proceedings be dismissed" was a proceeding arising in a matter under the Act, that proceeding was not instituted by the applicants. It was instituted by the respondent. In a proceeding to which s 347 applies, the section limits the power to award costs so that costs can only be awarded against the applicant and then only if the proceedings were instituted vexatiously or without reasonable cause: see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272 cited with approval by a Full Court in Thomson v Hodder (1989) 21 FCR 467 at 470. 10 I propose to dismiss the application by the respondent with no order as to costs. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. Associate: Dated: 20 September 2002 Counsel for the Applicant: Mr P Ginters Solicitor for the Applicant: Geoffrey Edwards & Co Counsel for the Respondent: Mr J Fernon Solicitor for the Respondent: Freehills Date written submissions concluded: 16 September 2002 Date of Judgment: 20 September 2002