Federal Circuit and Family Court of Australia

(DIVISION 2)

Jess v Cooloola Milk Pty Ltd [2021] FedCFamC2G 165
File number(s):	BRG 279 of 2019	
		
Judgment of:	JUDGE VASTA	
		
Date of judgment:	22 October 2021	
		
Catchwords:	INDUSTRIAL LAW – FAIR WORK – COSTS – section 570 of the Fair Work Act 2009 (Cth) – where the Respondents could not disprove some claims of the Applicant – where the Court made a declaration that the Respondents had contravened the FW Act – where the Court had earlier considered the effect of a “no costs” jurisdiction on whether to make a pecuniary penalty order – application dismissed	
		
Legislation:	Fair Work Act 2009 (Cth), ss 535, 570	
		
Division:	Division 2 General Federal Law	
		
Number of paragraphs:	32	
		
Date of last submission/s:	15 October 2021	
		
Date of hearing:	In chambers on the papers 	
		
Place:	Brisbane	
		
Counsel for the Applicant:	Mr Latham	
		
Solicitor for the Applicant:	Anderson Gray Lawyers	
		
Counsel for the Respondents:	Ms Willson	
		
Solicitor for the Respondents:	Employsure Law Pty Ltd	

ORDERS
	BRG 279 of 2019	
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)	
BETWEEN:	GREGORY JESS
Applicant
	
AND:	COOLOOLA MILK PTY LTD
First Respondent

RICHARD SCHRODER
Second Respondent

order made by:	JUDGE VASTA	
DATE OF ORDER:	22 OCTOBER 2021	

THE COURT ORDERS THAT:

1.	The Application in a case filed on 4 August 2021 be dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT
JUDGE VASTA
Introduction
1	On 7 July 2021, I delivered judgment in this matter. I found that the Respondents had contravened s 535 of the Fair Work Act 2009 (Cth) (“the FW Act”) by failing to make employee records in relation to the casual employment of the Applicant and by failing to make a record of the number of overtime hours worked by the Applicant.  I ordered that there be no pecuniary penalty and that all outstanding applications be dismissed.
2	On 4 August 2021, the Respondents filed an application in a case seeking payment of costs on an indemnity basis and asking that I make a personal costs order against the solicitor for the Applicant.  For various reasons, the parties filed material and asked me to make a decision on the papers to obviate the need for an actual hearing.
3	It is trite to say that the question of costs in this jurisdiction is governed by the provisions of s 570 of the FW Act.  In effect, for me to entertain the question of costs in this matter, I would have to be satisfied that :-
•	the Applicant instituted these proceedings vexatiously or without reasonable cause; and/or, 
•	the Applicant engaged in an unreasonable act (during the course of proceedings) that caused the Respondents to incur costs
4	Unless I am satisfied of at least one of those circumstances, I cannot award costs.
The Background
5	In my reasons for judgment, I set out the important facts of the matter.  The action was commenced by the Applicant filing his originating application on 20 March 2019.  The affidavit evidence, adduced in this present application, gives a history of offers to resolve the matter between the Applicant and the Respondents.
6	On 7 March 2019, the Applicant wrote to the Respondents offering to settle all matters in the amount of $31,000.
7	This offer was rejected on 12 March 2019.
8	On 3 June 2019, the Applicant served on the Respondents an offer to compromise in the amount of $24,000.
9	On 1 July 2019, the Respondents rejected that offer but proposed a counter-offer of $10,000.
10	This counter-offer was rejected by the Applicant on 10 July 2019.
11	On 23 July 2019, the Respondents proposed an offer to settle in the amount of $14,000.
12	For various reasons, on the same day the Applicant rejected the Respondent’s offer but proposed instead that the matter settle for a payment of $45,077.54.
13	The next day, 24 July 2019, the Respondents rejected that offer and re-stated their offer to settle for $14,000.
14	The next day, 25 July 2019, the Applicant asked the Respondent to reconsider their offer.
15	On 2 September 2019, the Respondents proposed an offer to settle in the amount of $15,000.
16	On 9 September 2021, the Applicant rejected the offer.
17	As was detailed in my reasons for judgment, the trial of the matter proceeded in February 2020.  There were no other proposals by either party to settle the matter.
Arguments of the Respondent
18	The Respondent argues that the Applicant instituted these proceedings without reasonable cause because he based the proceedings upon a “work diary”.  As I explained during the course of the reasons for judgment, I have not accepted that “work diary” as a legitimate document.
19	Having come to that conclusion, the Respondent argues that the Applicant must have known that his whole claim was based upon a document that was, in effect, a forgery.  If the claim was based upon a forged document, then, the Respondent argues, the institution of the proceedings cannot be said to be anything other than unreasonable.
20	For the same reason, the Respondent argues that the continuation of the proceedings and the refusal to accept the offers to settle constitute unreasonable acts that have caused the Respondent to expend money.
The Reasons for Judgment
21	In my reasons for judgment, I detailed the reasons as to why I did not accept the “work diary” of the Applicant as being genuine.  However, my non-acceptance of that evidence does not automatically correlate with a positive finding that the Applicant was attempting to perpetrate a fraud upon the Court.  Notwithstanding that the “work diary” was contrived, it was the only document that purported to be a record of the hours worked by the Applicant.
22	As was pointed out during my reasons for judgment, the legislation put the onus upon the Respondent to disprove the hours claimed to be worked (from late 2017) by the Applicant given that the Respondent had not kept records of which he was obliged to keep.  For that period, for which the legislation covered, the Respondent was unable to disprove those hours.
23	There was no finding by me that the Applicant had actually worked those hours (because I could never have been satisfied of that fact) but there was no need for me to make a positive finding because of the effect of the legislation.  
24	Contrary to the submission of the Applicant, I did not find that the Applicant had been underpaid; I was not satisfied that the Respondent had disproved that the Applicant had not worked the hours, even though the document upon which the Applicant made his claim was a contrivance.  The calculations were done upon the mathematical conclusion that the Respondents could not disprove that the Applicant had not worked the equivalent of 141 hours more than the Respondents had set.
25	Having regard to those facts, I cannot find that the proceedings were commenced for a vexatious purpose or that it was unreasonable for the Applicant to commence those proceedings.  That conclusion may have been different if it were not for the effect of the legislation.
26	For the same reason, I cannot accept that it was an unreasonable act of the Applicant to continue his application upon the evidence that was before me.
The Offers
27	The failure by the Applicant to accept the offers given to him by the Respondents seems unwise given the conclusion of the proceedings.  However, it might also be said to be unwise of the Respondent not to have accepted the offers of the Applicant given the way in which this litigation was conducted and the enormous time and expense that the Respondent needed to undertake to have created the schedule.
28	This jurisdiction is known as a “no costs” jurisdiction.  The exchanging of “Calderbank” offers is far more meaningful in jurisdictions where costs are a very live issue.  Notwithstanding the “dishonesty” of the Applicant in the creation of the “work diary”, he was entitled to make whatever claim about hours he worked that he wished given that the legislation (from 2017) meant that the Respondents had to disprove that claim.  Just because he failed in his overall claim does not mean that his failure to accept those earlier offers was unreasonable.
Other matters
29	It was clear from the remarks I made in my reasons for judgment that I had already considered the issue of costs.  The only other material that has now been put before me that I did not have at the time of my consideration, is the history of the offers that were made.
30	It is also clear, from the reasons, that the inability for the Respondents to make a successful claim for costs was a major factor in the final orders that I made.  This application was a totally unnecessary one.
31	Because of this, the Applicant wishes for me to order costs against the Respondents.  I can well understand why the Applicant makes this submission.  But I can also understand the position of the Respondents in that they have had to defend a claim based upon a contrived document and it has cost them quite a deal of money.  But, as I said in the original reasons for judgment, this matter would not have ever seen the door of a Courtroom if the Respondent had complied with the provisions of the FW Act.
32	The awarding of costs is discretionary.  In this case I exercise my discretion not to award costs to the Applicant and to dismiss the Application in a Case made by the Respondent.

I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta.	

Dated:	22 October 2021