FEDERAL COURT OF AUSTRALIA

ACE Insurance Limited v Trifunovski (No 3) [2012] FCA 975 

Citation:	ACE Insurance Limited v Trifunovski (No 3) [2012] FCA 975	
		
Parties:	ACE INSURANCE LIMITED v BLAGOJA TRIFUNOVSKI, HERACLEA PTY LIMITED ACN 007 437 372, JOSEPH VIVIL RIENZIE PERIES, SHARE PEREZ, WILLIAM DICINOSKI and FETIE VICKI DICINOSKI

SHANE PEREZ v ACE INSURANCE LIMITED

RIENZIE PERIES v ACE INSURANCE LIMITED

FETIE DICINOSKI v ACE INSURANCE LIMITED

WILLIAM DICINOSKI v ACE INSURANCE LIMITED

BLAGOJA TRIFUNOVSKI  v ACE INSURANCE LIMITED	
		
File numbers:	NSD 1860 of 2008
NSD 643 of 2009
NSD 644 of 2009
NSD 646 of 2009
NSD 647 of 2009
NSD 649 of 2009	
		
Judge:	PERRAM J	
		
Date of judgment:	6 September 2012	
		
Catchwords:	COSTS – No-costs régime – determination of costs where five of six related proceedings were governed by the no-costs régime in s 824 of the Workplace Relations Act 1996 (Cth) – whether actions of parties were unreasonable – where alleged unreasonableness lay in the pursuit of estoppel defences, procedural deficiencies, the failure to accept offers of compromise and the commencement of proceedings in the Federal Court – consideration of the relationship between the no-costs régime and claims brought under other statutes 	
		
Legislation:	Fair Trading Act 1987 (NSW) 
Trade Practices Act 1974 (Cth)   ss 52, 87
Workplace Relations Act 1996 (Cth)   s 824  	
		
Cases cited:	ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 cited
Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 cited
Bullock v London General Omnibus Company [1907] 1 KB 264 cited
Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski [2009] FCA 525 cited
Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski (No 3) [2011] FCA 238 cited
Commissioner of Pay-roll Tax (Victoria) v Mary Kay Cosmetics Pty Ltd [1982] VR 871 cited
Maritime Union of Australia v Geraldton Port Authority (No 2) (2001) 94 IR 404; [2000] FCA 16 applied
McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 applied
Sehovic v Combined Insurance Company of Australia [2006] WAIRComm 4003 cited	
		
Date of hearing:	Heard on the papers	
		
Date of last submissions:	28 August 2012	
		
Place:	Sydney	
		
Division:	GENERAL DIVISION	
		
Category:	Catchwords	
		
Number of paragraphs:	40	
		
Counsel for ACE Insurance:	A Leopold SC, T Saunders	
		
Solicitor for ACE Insurance:	Allens	
		
Counsel for Mrs Dicinoski and Messrs Trifunovski, Peries, Perez and Dicinoski:	A Britt	
		
Solicitor for Mrs Dicinoski and Messrs Trifunovski, Peries, Perez and Dicinoski:	KP O’Donnell & Associates	

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 1860 of 2008	
 
BETWEEN:	ACE INSURANCE LIMITED
Applicant
	
AND:	BLAGOJA TRIFUNOVSKI
First Respondent

HERACLEA PTY LIMITED ACN 007 437 372
Second Respondent

JOSEPH VIVIL RIENZIE PERIES
Third Respondent

SHARE PEREZ
Fourth Respondent

WILLIAM DICINOSKI
Fifth Respondent

FETIE VICKI DICINOSKI
Sixth Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

THE COURT ORDERS THAT:

1.	The applicant pay the respondents’ costs of the proceeding save in relation to the question of whether each agent was an employee and whether the agents were estopped from denying they were independent contractors.
2.	The cross-claimants pay the cross-respondent’s costs of the cross-claim save in relation to the question of whether each agent was an employee.

Note:	Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 643 of 2009	
 
BETWEEN:	SHANE PEREZ
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

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.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 644 of 2009	
 
BETWEEN:	RIENZIE PERIES
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

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.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 646 of 2009	
 
BETWEEN:	FETIE DICINOSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

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.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 647 of 2009	
 
BETWEEN:	WILLIAM DICINOSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

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.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 649 of 2009	
 
BETWEEN:	BLAGOJA TRIFUNOVSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE OF ORDER:	6 September 2012	
WHERE MADE:	SYDNEY	

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.

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 1860 of 2008	
 
BETWEEN:	ACE INSURANCE LIMITED
Applicant
	
AND:	BLAGOJA TRIFUNOVSKI
First Respondent

HERACLEA PTY LIMITED ACN 007 437 372
Second Respondent

JOSEPH VIVIL RIENZIE PERIES
Third Respondent

SHARE PEREZ
Fourth Respondent

WILLIAM DICINOSKI
Fifth Respondent

FETIE VICKI DICINOSKI
Sixth Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 643 of 2009	
 
BETWEEN:	SHANE PEREZ
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 644 of 2009	
 
BETWEEN:	RIENZIE PERIES
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 646 of 2009	
 
BETWEEN:	FETIE DICINOSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 647 of 2009	
 
BETWEEN:	WILLIAM DICINOSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

IN THE FEDERAL COURT OF AUSTRALIA		
NEW SOUTH WALES DISTRICT REGISTRY		
GENERAL DIVISION	NSD 649 of 2009	
 
BETWEEN:	BLAGOJA TRIFUNOVSKI
Applicant
	
AND:	ACE INSURANCE LIMITED
Respondent

JUDGE:	PERRAM J	
DATE:	6 september 2012	
PLACE:	SYDNEY	

REASONS FOR JUDGMENT

1		There remains now only the question of costs.  There are six separate proceedings.  The first five of these were all commenced by the agents in the Chief Industrial Magistrates Court, an aspect of the Local Court of New South Wales, in February 2007.  In December 2008, Combined commenced its own proceedings in this Court against the agents (NSD 1860 of 2008).  In those proceedings, Combined alleged that the agents had misled Combined by agreeing with it that they were independent contractors.  This was said to give rise to an entitlement to an indemnity under s 87 of the former Trade Practices Act 1974 (Cth) as well as an estoppel.  Following an unsuccessful attempt by the agents to stay the proceedings in this Court on jurisdictional grounds (Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski [2009] FCA 525) their proceedings before the Chief Industrial Magistrates Court were removed into this Court (via the Supreme Court of New South Wales).  In the trial, which eventuated I heard all six cases at the same time and evidence in one was evidence in all.
2		Nevertheless, the six cases are juridically distinct and they were not the subject of a consolidation order.  This is of some significance in the present circumstance.  Despite their transfer to this Court, the agents’ proceedings against Combined at all times remained proceedings – and this was not in dispute – arising under the Workplace Relations Act 1996 (Cth).  The proceedings brought by Combined, on the other hand, did not have that quality.
3		That has the consequence that an award of costs is available in Combined’s proceedings against the agents but, subject to an exception discussed below, such an award is not available in the proceedings commenced by the agents against Combined.  This is the effect of s 824 of the former Workplace Relations Act, which provided at the time of the agents’ commencement in the Chief Industrial Magistrates Court:
(1)	A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) must not be ordered to pay costs incurred by any other party to the proceedings unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.

(2)	Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.

(3) 	In subsections (1) and (2):
costs includes all legal and professional costs and disbursements and expenses of witnesses.

4		It is therefore necessary to attend to the cost issues arising from the agents’ proceedings separately from those arising from Combined’s proceedings.  It is useful to deal with the agents’ proceedings first.
The Costs of the Agents’ Proceedings
5		Section 824(1) applied to the agents’ proceedings.  The agents submitted that Combined had, by the commission of ‘an unreasonable act or omission’, enlivened s 824(2).  They nominated four such acts or omissions:
(a)	the running of a defence of estoppel against the agents’ claims;
(b)	the failure by Combined to abide by Court directions, to attend directions hearings, to respond to requests for particulars and by reason of a late amendment;
(c)	a failure to accept certain offers of compromise; and
(d)	the filing by Combined of proceedings NSD 1860 of 2008 in this Court.
6		As to (a), the agents submitted that Combined’s deployment of estoppel defences was ‘misconceived in the sense of being incompetent or unsupportable on the authorities’.  It is, perhaps, easy to have some sympathy for this argument. The inability of estoppel to work in an industrial context is not, as I pointed out in ACE Insurance Ltd v Trifunovski (2011) 200 FCR 532 at [145], a new phenomenon.  Nevertheless, in the case of each statutory régime, it is necessary to identify whether its policy excludes the operation of principles such as estoppel. The answer given with respect to any one statutory regime cannot be determinative of the answer given with respect to another.
7		As my reasons referred to above show, the conclusion that the statutory framework excluded the operation of doctrines such as estoppel had not been formally reached until that judgment: see [135]-[142], particularly [141]-[142].  It is true that other courts had previously concluded that the legislation, as it stood before 2006, evinced such an intention, but no such holding had yet been made about the form of the legislation after 2006.  In my opinion, Combined had a difficult argument to advance on this topic because the differences between those two régimes are hard to discern from this perspective.  Nevertheless, the defence was not, as a matter of formality, excluded by authority.  I do not accept that the assertion of an estoppel could be, in those circumstances, unreasonable in the requisite sense.  I reject argument (a).
8		Argument (b) turned upon what were said to be procedural defaults by Combined.  The solicitor for the agents pointed to these matters in his affidavit. The first of these was said to be Combined’s failure to appear in the five matters at a directions hearing held on 19 December 2008 in the Chief Industrial Magistrates Court.  The matters were adjourned in consequence to 21 January 2009.  Mr Arthur, the solicitor for Combined, gave evidence about this.  He disputed the agents’ claim for costs in relation to the appearance on that day.  What had happened, according to Mr Arthur, was that the parties had not known that the matter was to be listed on 19 December 2009.  This was because when the matter had last been before the Court it had been listed for further directions on 21 January 2009 (not 19 December 2008).  Mr O’Donnell had noticed the matters in the list for 19 December 2008 and had contacted one of Mr Arthur’s employed solicitors, Mr Dooley.  In the ensuing discussion between Mr Dooley and Mr O’Donnell both had agreed that the listing was in error and that Mr O’Donnell would mention Mr Dooley’s appearance, calling him once more if attendance was necessary.
9		All of these matters were then recorded in a letter written by Mr Arthur to Mr O’Donnell on 20 January 2009.  Mr Arthur put this letter before me and there was no attempt by Mr O’Donnell thereafter to contradict this account. I accept it.  It follows that there was nothing unreasonable about the failure of Mr Dooley (or Mr Arthur) to appear on 19 December 2008. Consequently, no reason is shown to depart from the ordinary position that there be no costs.
10		The second procedural default relied upon by the agents was on 21 January 2009.  However, although this was advanced in the agents’ written submissions, I did not apprehend from Mr O’Donnell’s evidence anything more than that there had been a directions hearing on that day and that Combined had been ordered to file its evidence by 4 March 2009.  If I had concluded that the proceedings’ adjournment to that day had been the result of unreasonable conduct on 19 December 2008 some scope might then have appeared for an argument that the subsequent directions hearing (and inferentially the costs associated therewith) might also have been unreasonably incurred.  This argument does not, however, appear to have been advanced. In any event, I have rejected the premise upon which it would have rested, viz the unreasonableness of the events of 19 December 2008.  Perhaps another form of the argument was the notion that Combined had not filed its evidence by this date and that this had required the further adjournment of the proceedings.  If such an argument was advanced, I do not accept that this was unreasonable without knowing more about what led to the timetable breach.
11		The third procedural default relied upon is said to have occurred on 9 March 2009.  The evidence of Mr O’Donnell was that on this date the agents’ claims were adjourned to 20 April 2009 to allow Combined to put on its evidence.  As already noted a similar adjournment had also occurred on 21 January 2009.
12		The agents’ submissions did not explain why this might justify a departure from the ordinary costs position.  I think it likely that the submission is that the failure of Combined to file its evidence in accordance with the direction of 21 January 2009 meant that the directions hearing on 9 March 2009 was a waste of time.  I do not accept this argument.  To  conclude that this conduct was unreasonable I would need to know why the evidence had not been filed. Common experience with litigation well-shows that timetable breaches are not necessarily unreasonable.  Further, I know nothing of what occurred on 9 March 2009.  Just because the timetable for Combined’s evidence was extended does not mean that other matters were not usefully discussed.  Hence it is not possible to say that it was a waste of time.
13		The fourth procedural default was said to arise from a costs order made by me on 8 March 2011.  On that day I permitted Combined to amend its pleadings in NSD 1860 of 2008 and ordered it to pay the costs thrown away by reason of the amendment:   Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski (No 3) [2011] FCA 238.  I am at a loss to understand how this event interacts with the agents’ proceedings.  Regardless, there was nothing ‘unreasonable’ about the amendment application which could enliven s 824(2).
14		The fifth procedural default relied upon what was said to be a failure by Combined to respond to a request for particulars which had, in turn, necessitated the agents bringing an interlocutory application.  Mr Arthur gave evidence which contradicted this allegation:  the prayer of the motion seeking the response to the request for particulars was not pressed by the agents (following further correspondence) and I dismissed the balance of the notice of motion (which sought to dismiss the proceedings on jurisdictional grounds) with costs: Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski [2009] FCA 525.  I see nothing unreasonable in any of this conduct.  
15		Equally importantly, this request was made in proceedings NSD 1860 of 2008 which were not proceedings under the Workplace Relations Act so that, subject to some remarks below, s 824 did not apply.
16		As to (c), through the course of the litigation the agents made two sets of offers of compromise. These offers (together with the final judgment sums awarded) were as follows:
	5 November 2008	December 2010	Judgment	
Mr Trifunovski	$79,604	$80,000 plus combined to pay $20,000 in costs	$79,226.31 (plus interest)	
Mr Peries	$384,001.31	$300,000 plus Combined to pay $20,000 in costs	$70,657.50 (plus interest)	
Mr Perez	$48,610	$45,000 plus Combined to pay $20,000 in costs	$64,428.34 (plus interest)	
Mr Dicinoski	$13,778	$10,400 plus Combined to pay $10,000 in costs	$16,759.21 (plus interest)	
Mrs Dicinoski	$9,500	$7,200 plus Combined to pay $10,000 in costs	$13,416.43 (plus interest)	

17		The interest to which Mr Trifunovski will be entitled will result in his judgment sum exceeding the $79,604 offer of 5 November 2008 and the $80,000 offer of December 2010 (leaving aside the question of costs).  In the case, therefore, of Mr Trifunovski, Mr Perez and Mr and Mrs Dicinoski, each has succeeded in recovering more than they sought in the offers of 5 November 2008 and also in the non-costs component of the December 2010 offers.
18		Those offers were of a similar nature to Calderbank offers; that is, their purpose was to put in place an offer which it would be unreasonable to refuse.  A first step is obviously that the offer should be reasonable from the offerer’s perspective.  But failure to accept such an offer does not, however, give rise to an automatic entitlement to costs.  The question, rather, is whether it was unreasonable for the offeree to have declined the offer.  I accept in this case that each of the offers was objectively reasonable from the agents’ perspective and involved an element of compromise.  It does not follow, however, that, just because the offers were reasonable, Combined’s refusal to accept them was itself unreasonable.  Some reasonable offers may be reasonably declined.
19		Here, from Combined’s perspective, the proceedings were hardly overpowering.  Combined had the benefit of the decision of the Western Australian Industrial Relations Commission in Sehovic v Combined Insurance Company of Australia [2006] WAIRComm 4003 that its agents were not employees.  Other authorities supported its position, particularly the Privy Council’s decision in Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 and the Victorian Supreme Court’s decision in Commissioner of Pay-roll Tax (Victoria) v Mary Kay Cosmetics Pty Ltd [1982] VR 871.  In those circumstances, it was not unreasonable for Combined to decline the offers, more so when the issue being litigated went to the heart of its business.
20		The later offers of December 2010 stand in no different position.  Indeed, the inclusion of a costs element makes them more problematic from the agents’ perspective because the effect of s 824 is to make costs not recoverable in the agents’ proceedings.
21		In those circumstances, the failure of Combined to accept either set of offers was not an unreasonable act or omission and does not provide a basis for departing from the no-costs régime enunciated in s 824.
22		As to (d), the filing of proceedings NSD 1860 of 2008 in this Court: as has been noted, after the agents commenced their proceedings against Combined in the Chief Industrial Magistrates Court, Combined commenced proceedings against them alleging that each had engaged in misleading and deceptive conduct by signing a contract in which it was agreed that the relationship between the parties was that of independent contractor and principal.  An estoppel was also alleged.
23		There was no reason this claim could not have been pursued by way of cross-claim before the Chief Industrial Magistrates Court.  Although I dismissed the agents’ application for a stay of these proceedings, it had been pursued only on a jurisdictional basis:  Combined Insurance Company of America trading as Combined Insurance Company of Australia v Trifunovski [2009] FCA 525.  In my opinion, the commencement by Combined of the proceedings in this Court was an example of forum shopping.  Had I been asked to stay the proceedings on forum non conveniens (rather than jurisdictional) grounds it is likely that I would have given serious consideration to doing so.
24		I therefore accept that the commencement of the Federal Court proceedings was an ‘unreasonable act’ with in the meaning of s 824(2).  The consequence is that that provision authorises this Court to order Combined to pay the agents all, or part, of the costs incurred as a result of the unreasonable act ‘in connection’ with the agents’ proceedings.  The Federal Court proceedings and Chief Industrial Magistrates Court proceedings are but one matter (in the constitutional sense) and I do not doubt that the costs, if any, incurred in the Federal Court proceedings are properly characterised as being ‘in connection’ with the agents’ proceedings.  Indeed, they should have taken the form of a cross-claim in each case.
25		It seems to me, therefore, that the agents are entitled to an order under s 824(2) to put them in the same position they would have been in had the Federal Court proceedings never been commenced but pursued instead by cross-claim in the Chief Industrial Magistrates Court.  
26		What would the costs position have been in that circumstance?  Combined would have been pursuing a cross-claim having two elements:
(i)	the apparent assertion of an estoppel as a sword; and
(ii)	claims under the Fair Trading Act 1987 (NSW) and the Trade Practices Act 1974 (Cth) alleging misleading and deceptive conduct.
27		The use of the estoppel as sword in (i) was purely a matter of appearance.  The same estoppel had already been pleaded in Combined’s defences in the agents’ proceedings.  It was, in truth, a defensive estoppel.  As such it is to be seen for what, in substance, it was: an equitable defence to each agent’s statutory claim under the Workplace Relations Act.  As such, the costs associated with it were part of a proceeding under that Act and the bar in s 824(1) would have applied to the estoppel component.  This Court has previously accepted that pendent common law claims brought by an applicant in a proceeding part of which is under the Workplace Relations Act attract the immunity in s 824(1) (or, more precisely, its lineal predecessors):  see Maritime Union of Australia v Geraldton Port Authority (No 2) (2001) 94 IR 404; [2000] FCA 16 at [61]-[78], particularly [65], per R D Nicholson J.  That does not decide either the position of costs arising from a defence or the position of claims in equity.  As to the latter, I do not think any reason presents itself for thinking that equitable claims should be treated differently to common law claims.
28		As to the former, it seems to me that a defence to a proceeding pursued under the Workplace Relations Act is an inseverable part of that proceeding and hence is subject to the immunity in s 824(1).
29		Thus if Combined’s estoppel claim had been pursued in the Chief Industrial Magistrates Court then s 824 would have applied to it.
30		On the other hand, it seems clear that this is not so in relation to (ii), the various statutory counts Combined pursued under the Fair Trading Act and the Trade Practices Act.  It is established that separate claims pursued under statutes other than the Workplace Relations Act are not proceedings under that Act and hence do not attract the immunity in s 824(1):  see McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 596 [16]-[18] per Buchanan J.  That case was concerned with separate statutory counts by an applicant whereas this case is concerned with by a separate count by a defendant.  I do not see that as being a distinction of significance in the present context.  If this aspect of Combined’s proceeding had been brought instead as a cross-claim in the agents’ proceedings it would not have attracted the immunity in s 824(1).
31		The prejudice caused to the agents by Combined’s unreasonable act of choosing to pursue its cross-claim in this Court (which is what enlivens s 824(2)) is that they have lost the immunity conferred on them by s 824(1) in relation to the estoppel claim.  They did not lose any immunity from costs in relation to the statutory counts as s 824(1) never applied to these.
32		As will be seen at [37] below, the appropriate costs order in Combined’s proceeding (leaving aside the effect of s 824(1)) is that Combined should pay the agents’ costs apart from those relating to the estoppel claim and the question of employment.  This is precisely the order which would have been made if Combined’s separate proceeding had been pursued by cross-claim in the Chief Industrial Magistrates Court.  
33		What of the agents’ cross-claim in Combined’s proceedings?  Here the agents alleged that Combined has misrepresented to them the true nature of the relationship by providing them with contracts to sign containing the independent contractors clause (contrary to s 52 of the Trade Practices Act).  Had Combined’s case been pursued as a cross-claim in the agents’ proceedings this cross-claim would have needed to have taken the form of an additional statutory count added to the principal claim.  For the reasons already given, s 824 would not have applied to those separate statutory counts.  It follows that the fact that they ultimately took the form of a cross-claim in Combined’s proceedings had no costs consequences because s 824 applied to them in neither circumstance.
34		In all of those circumstances, whilst I accept that Combined’s actions in commencing proceedings in this Court was unreasonable within the meaning of s 824(2), I do not think it has any costs consequences given that Combined failed in those proceedings.  As noted above, I was not asked to stay the proceedings on grounds of forum non conveniens.  No occasion therefore arises to utilise the power in s 824(2).
Costs in the Federal Court Proceedings
35		Combined’s claims against the agents failed.  Subject to questions of overlap I see no reason why costs should not follow the event.
36		The agents pursued their own cross-claim against Combined which was premised on Combined succeeding on its principal claim.  That claim also, therefore, failed. The agents did not submit that Combined should bear the costs of their pursuit of the cross-claim because it was reasonable of them to sue Combined in response to the way in which Combined had sued them.  The agents did not ask for a Bullock order and I will not make one:  cf. Bullock v London General Omnibus Company [1907] 1 KB 264.  In those circumstances, the agents should pay Combined’s costs of the cross-claim subject only to questions of overlap.
Overlap
37		The largest element in this litigation has been the question of employment which arose in each of the various proceedings.  It would undermine the policy of s 824 to permit any recovery in the Federal Court proceedings by any party in relation to the employment question.  There should, therefore, be no costs awarded in respect of the employment question.  For reasons already given no costs should be recoverable in respect of Combined’s estoppel claim.
38		The orders I therefore make are:
39		In each of NSD 643, 644, 646, 647 and 649 of 2009 I will order that there be no order as to costs.
40		In NSD 1860 of 2009, I will order that:
1.	The applicant pay the respondents’ costs of the proceeding save in relation to the question of whether each agent was an employee and whether the agents were estopped from denying they were independent contractors.
2.	The cross-claimants pay the cross-respondent’s costs of the cross-claim save in relation to the question of whether each agent was an employee.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.	

Associate:

Dated:	6 September 2012