Payne v Secure Melbourne Protective Services Pty Ltd (No 2) [2023] FCA 1579

Federal Court of Australia

Payne v Secure Melbourne Protective Services Pty Ltd (No 2) [2023] FCA 1579 File number: VID 746 of 2020

Judgment of: SNADEN J

Date of judgment: 14 December 2023

Catchwords: COSTS – statutory prohibition against award – whether costs incurred in consequence of unreasonable conduct – respondent withdrew from defence of matter following unsuccessful mediation – whether failure to attend to proper defence of matter was unreasonable – whether costs incurred by the successful applicant were incurred because of that conduct – application dismissed.

Legislation: Fair Work Act 2009 (Cth) s 570

Cases cited: Payne v Secure Melbourne Protective Services Pty Ltd [2023] FCA 1311

Division: Fair Work Division

Registry: Victoria

National Practice Area: Employment and Industrial Relations

Number of paragraphs: 13

Date of last submission: 15 November 2023 (applicant)

Date of hearing: Determined on the papers

Counsel for the Applicant: Mr D Kelsey-Sugg

Solicitor for the Applicant: Ellis Palmos & Co Lawyers

Counsel for the Respondent: The Respondent did not file submissions

ORDERS VID 746 of 2020

BETWEEN: TERRENCE ANDREW PAYNE Applicant

AND: SECURE MELBOURNE PROTECTIVE SERVICES PTY LTD Respondent

order made by: SNADEN J DATE OF ORDER: 14 december 2023

THE COURT ORDERS THAT:

1. There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SNADEN J: 1 On 1 November 2023, the court granted the applicant relief on an application for compensation related to breaches by the respondent of an award made under the Fair Work Act 2009 (Cth) (the "FW Act"): Payne v Secure Melbourne Protective Services Pty Ltd [2023] FCA 1311 ("Payne"; Snaden J). Having foreshadowed that he might want to do so, Mr Payne was given a period of 14 days to press any application that he wished to make for costs. He accepted that invitation on 15 November 2023, filing short written submissions as to why an order for costs ought to be made in his favour. A corresponding invitation that was extended to the respondent to indicate (if it wished to) why costs ought not to be granted went unanswered. 2 The following reasons are directed to that discrete (costs) question. They assume some familiarity with the reasons given for the court's substantive judgment. 3 Section 570 of the FW Act relevantly provides as follows: 570 Costs only if proceedings instituted vexatiously etc. (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2)… Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A. (2) The party may be ordered to pay the costs only if: … (b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; … 4 Plainly, in order that the court might make a costs order in his favour, Mr Payne must demonstrate that he has incurred costs in connection with this matter as a consequence of unreasonable conduct on the part of the respondent. There are, thus, two matters of which the court must be satisfied in order that it might accede to Mr Payne's request: first, that the respondent engaged in conduct that was unreasonable; and, second, that Mr Payne incurred costs as a result of that conduct. 5 Presently, Mr Payne submits that the unreasonable act or omission by reason of which it is appropriate for the court to make a costs award in his favour inheres in the respondent's having effectively withdrawn from participating in the substantive matter following an unsuccessful mediation that occurred on 10 March 2022. That withdrawal is the subject of analysis in the primary judgment: Payne, [14]-[15] (Snaden J). It is not to be doubted that, following the unsuccessful mediation of Mr Payne's substantive claims, the respondent failed or declined to do any of the things that might typically be done by a respondent that is properly engaged in the defence of a matter before the court. 6 Mr Payne urges the court to accept that that failure (or the constituent failures of which it might conveniently stand in summary) amounts to an unreasonable act or omission for the purposes of s 570(2)(b) of the FW Act. Specifically, he maintains that it was unreasonable because (references omitted): (a) It breached the Rules and was not consistent with the overarching purpose in s. 37M of the FCA to facilitate the just resolution of disputes according to law, and "as quickly, inexpensively and efficiently as possible". (b) Instead of enabling the litigation to proceed more expeditiously, the failure of the respondent to engage with the applicant and the Court's processes prolonged the litigation by foreclosing the possibility of any post-mediation settlement negotiations. (c) By foreclosing the possibility of any post-mediation settlement negotiations, it forced the applicant (a disabled person with severe PTSD) to proceed to a final hearing, and compelled him to publicly relive the distressing and traumatic events that led to his debilitating psychiatric conditions. (d) It put the applicant to additional inconvenience and expense. (e) Whilst the reasons for the conduct are not known, it was always within the power of the respondent to explain those reasons and it never did. One cannot rule out the possibility that the respondent's withdrawal from all Court processes was tactical, or that it represented the respondent thumbing its nose at the applicant and the Court. 7 I have no difficulty in characterising as relevantly "unreasonable" the respondent's unexplained withdrawal from the matter. Again, that label—"withdrawal"—must be understood as a convenient facsimile for all of the things that the respondent ought to have done but did not do by way of defence of Mr Payne's action. By his written submissions, Mr Payne helpfully summarised them as follows, namely: (a) not communicating with the applicant, the applicant's legal representatives or the Court, thus preventing the Court from considering whether or not to make a referral for legal assistance for the respondent under r. 4.12; (b) not filing a notice of address for service, contrary to r. 4.05(2), with the result that there was some ongoing uncertainty as to where Court documents and notices and correspondence addressed to the respondent should be sent; (c) not appointing another lawyer to represent it in the proceeding after its initial lawyer ceased acting, and not applying for any dispensation from the requirements of r. 4.01(2) in this regard; (d) not consulting at all with the applicant as to the contents of the court book, in breach of paragraph 7 of the Order of Justice Snaden dated 5 May 2022; (e) not otherwise engaging with or co-operating with either the applicant or the Court in relation to preparations for the final hearing on 19 June 2023; (f) not filing or serving any outline of written submissions, in breach of paragraph 6 of the Order of Justice Snaden dated 5 May 2022, with the result that the applicant did not know what were likely to be the main contested issues at trial; (g) not attending the hearing on 19 June 2023; (h) not responding to correspondence sent by the applicant and directly by the Court; [and] (i) not otherwise pursuing its defence in any way since 10 March 2022. 8 What is more difficult for Mr Payne, however, is establishing that he has incurred costs as a result of that unreasonable conduct. Might it be said that, but for the respondent's unreasonable failures, Mr Payne would not have been put to the expense that he was? 9 On that front, Mr Payne submits that the respondent's conduct was such that "…from 10 March 2022…the case could not be compromised or otherwise resolved…" He maintains that, "…[h]ad the respondent engaged with [him], a settlement of one form or another…would have been a realistic possibility". 10 Despite a healthy degree of sympathy, I do not accept that the costs that Mr Payne incurred in prosecuting his case from 10 March 2022 can be characterised as costs that were incurred because of the respondent's unreasonable conduct. It is quite plainly the case that not of all them could be; but, more to the point, I am unable to see how the court might take the view that any of them are. 11 Mr Payne's submission rests upon the proposition that, had it remained engaged in the defence of his action, the respondent would have taken steps to settle it. With respect, that proposition is self-evidently speculative. There is no evidential basis upon which I might safely accept it as a matter of inference. There is, for example, no evidence about any offers to settle that were put and rejected, nor anything that might guide some assessment of the parties' settlement postures over the course of the proceeding or the attendant likelihood that further engagement on the respondent's part might have been sufficient to compromise it. 12 Indeed, the true position could well be that Mr Payne's costs since 10 March 2022 have been substantially lower than what they might have been had the matter been more vigorously defended. 13 With those conclusions stated, Mr Payne's request for an award of costs must be declined. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Snaden.