FEDERAL COURT OF AUSTRALIA A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 812 COSTS – where workplace relations claim and discrete federal claim – where joinder of two applicants with separate claims Trade Practices Act 1974 (Cth) ss 45D, 45DC, 82, 84(2) Workplace Relations Act 1996 (Cth) s 347 A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 related A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047; (2007) 165 IR 94 related A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; (2005) 226 ALR 247 related Bahonko v Sterjov [2008] FCAFC 30 followed Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62 distinguished Inglis v Moore (No 2) (1979) 25 ALR 453 cited Thompson v Big Bert Pty Ltd [2008] FCA 792 cited A & L SILVESTRI PTY LIMITED (ACN 052 514 799) and NIGEL HADGKISS v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH), PETER PRIMMER, MICHAEL LANE and DAVID KELLY NSD 872 of 2005 GYLES J 3 JUNE 2008 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 872 of 2005 BETWEEN: A & L SILVESTRI PTY LIMITED (ACN 052 514 799) First Applicant NIGEL HADGKISS Second Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) Second Respondent PETER PRIMMER Third Respondent MICHAEL LANE Fourth Respondent DAVID KELLY Fifth Respondent JUDGE: GYLES J DATE OF ORDER: 3 JUNE 2008 WHERE MADE: SYDNEY THE COURT ORDERS THAT: The first and second respondents pay the costs of the first applicant of and incidental to the proof of damages for breach of s 45D of the Trade Practices Act 1974 (Cth) and the costs of the first applicant of the argument as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 872 of 2005 BETWEEN: A & L SILVESTRI PTY LIMITED (ACN 052 514 799) First Applicant NIGEL HADGKISS Second Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (NEW SOUTH WALES BRANCH) Second Respondent PETER PRIMMER Third Respondent MICHAEL LANE Fourth Respondent DAVID KELLY Fifth Respondent JUDGE: GYLES J DATE: 3 JUNE 2008 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 16 April last, declarations and orders were made in this proceeding following delivery of reasons for judgment on 11 April 2008 (A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466). Those reasons dealt with relief in relation to liability found earlier (A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2007] FCA 1047; (2007) 165 IR 94). The question of costs was reserved. The orders were varied by consent on 29 May 2008. Written submissions have been received as to costs. These reasons deal with that issue and assume familiarity with the previous judgments and orders. 2 The first applicant seeks an order for costs of the claims for damages upon which it succeeded pursuant to s 82 of the Trade Practices Act 1974 (Cth) against the third to fifth respondents for acting in contravention of s 45D of the Trade Practices Act and the first and second respondents for being knowingly concerned in the contravention of s 45D. The respondents submit that such an order would be inconsistent with the decision of the Full Court in Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62 because of the effect of s 347 of the Workplace Relations Act 1996 (Cth) as it was applicable to this case (now s 824) or at least that there is a necessity to "enter the murky waters" of an inconsistency between that decision and Bahonko v Sterjov [2008] FCAFC 30. I do not agree. Bahonko [2008] FCAFC 30 establishes that a discrete federal claim is not affected by the restrictions on the award of costs in the Workplace Relations Act. This was a discrete federal claim (cf Thompson v Big Bert Pty Ltd [2008] FCA 792). However, full operation must be given to the effect of s 347 by ensuring that costs in relation to the discrete federal claim would only be awarded where those costs do not overlap with costs incurred in relation to the Workplace Relations Actclaim. 3 There is another complication. The s 45D claim also overlapped with a claim in tort for inducing breach of contract. However, that claim is properly seen as associated with, or accrued in relation to, the Trade Practices Act claim rather than the Workplace Relations Act claim. Thus, Goldman Sachs JBWere Services Pty Ltd v Nikolich 163 FCR 62 is not applicable to it. 4 There is another complication. Each applicant had discrete claims for relief. The claims by the first applicant were claims for damages. The second applicant brought claims for penalties for breach of the Workplace Relations Act. Neither applicant had any concrete interest in the claims of the other. The respondents objected to joinder. Joinder was permitted (A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2005] FCA 1658; (2005) 226 ALR 247 at [6]–[12]). It was noted that the joinder of the causes of action complicated the long standing costs regime reflected in s 347 of the Workplace Relations Act. In the course of dealing with the question of security for costs which followed the permitting of joinder, the following was said (A & L Silvestri Pty Ltd 226 ALR 247 at [13]): "In my opinion, the joinder of applicants with the one set of solicitors and counsel has the consequence that Hadgkiss will be responsible for any order for costs which is made arising out of the proceedings, even if made in the Silvestri proceeding. The joinder is convenient for the applicants and liability for costs is one of the prices to be paid for that." That passage, of course, relates to the liability for costs rather than the entitlement to costs. 5 However, the respondents submit that, as the one set of solicitors and counsel was retained for the several applicants (as had to be the case), it cannot be said that the first applicant incurred any liability for costs in relation to the proceeding. I do not draw that conclusion. I do not know what arrangements existed between the applicants. Even if there were a private arrangement by which one applicant rather than another agreed to bear costs, that would not have any significance (Inglis v Moore (No 2) (1979) 25 ALR 453). The fact that a third party is involved in funding the costs of a party would not normally have any significance in relation to an entitlement to an order for costs by the party. The fact that one applicant is publicly funded does not alter the situation in principle. 6 Another matter raised by the respondents is the effect of s 45DC and s 84(2) of the Trade Practices Act. The effect of these provisions was raised late against the first and second respondents. It is submitted that there would need to be an adjustment of costs against the first and second respondents on that account. It was also submitted that the third, fourth and fifth respondents should have the benefit of an order for costs as they are protected by s 45DC(4) from payment of damages for breach of s 45D. I do not accept the effect of those arguments. The substance of the case had to be defended. There was only one set of costs involved in doing so. The provisions in question were only relevant to which of the respondents would be liable if the substance of the case was established, as it was. The protection afforded by s 45DC(4) is from the payment of damages only. The finding of breach remains. In my view, the appropriate result is that there be no order either way as to the costs relating to the third, fourth and fifth respondents. I can see no proper basis for relieving the first and second respondents of payment of the costs of the first applicant in relation to the s 45D claim. 7 Thus, in my opinion, the first applicant is entitled to an order against the first and second respondents for those costs attributable to the s 45D claim, which would not have been incurred in pursuing the Workplace Relations Act claim. In practical terms, these can be identified as being the costs associated with proof of damages. In my opinion, the other elements of the cause of action were inextricably entwined with the Workplace Relations Act substratum of facts. That overlap, after all, was the basis for permitting joinder in the first place. The first applicant should have the costs of the argument as to costs. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 3 June 2008 Counsel for the Applicants: Mr RM Goot AM SC, Mr MJ Heath Solicitor for the Applicants: Minter Ellison Lawyers Counsel for the Respondents: Mr JH Pearce Solicitor for the Respondents: Taylor & Scott Date of Last Submission: 20 May 2008 Date of Judgment: 3 June 2008