Parties in glass houses...Costs in general protection matters23 December 2015
It's rare for an award of costs to be made against a party following litigated general protection matters under the Fair Work Act 2009.
The difficulties experienced by parties seeking costs was reinforced in the recent Federal Court decision Tsilibakis v Transfield Services (Australia) Pty Ltd, in which Justice White refused to order costs sought by the respondent, Transfield Services (Australia) Pty Ltd (Transfield), following an unsuccessful adverse action and breach of contract claim.
The ruling has significant impact for lawyers because it highlights issues surrounding defective court documents, the problems parties often face in preparing for trial in adverse action and breach of contract proceedings, and the difficulties parties encounter when seeking to recover costs in this jurisdiction.
It also subtly reminds parties not to fall into the trap of accusing the opposing party of conduct that they have also engaged in.
The Tsilibakis adverse action claim
Mr Tsilibakis joined Transfield as a team leader in 2011 and was responsible for securing construction and maintenance employees for Transfield to supply to Santos Ltd, for work at its projects at Cooper and Eromanga Basins, which involve extensive petroleum and natural gas deposits, in south-west Queensland and north-east South Australia.
In his application, Mr Tsilibakis alleged that Transfield had contravened s340 of the Fair Work Act (the Act) by terminating him on 9 August 2013, with immediate effect, purportedly because his position had become redundant. Mr Tsilibakis maintained that the termination was in fact because he had made a complaint of bullying and harassment against his immediate supervisor.
The investigation into Mr Tsilibakis's complaint was finalised 11 days before his termination. Mr Tsilibakis asserted that Transfield had manufactured the redundancy to get rid of him and that, even if the redundancy was genuine, by doing so Transfield had also taken adverse action in contravention of the Act.
On 21 July 2015, Justice White dismissed all aspects of Mr Tsilibakis's claim, finding that Transfield had not engaged in adverse action when it made him redundant in August 2013 and by not re-employing him elsewhere in the organisation.
Transfield's application for costs
Following the dismissal of Mr Tsilibakis's claim, Transfield mounted an argument that Mr Tsilibakis should pay its costs under s570(2)(b) of the Act. It asserted that three separate acts or omissions by Mr Tsilibakis were unreasonable, causing Transfield to incur costs, and therefore the court, exercising its discretion, ought to award costs in its favour. The acts relied on were that Mr Tsilibakis had unreasonably delayed:
- addressing deficits in his statement of claim
- withdrawing his claims regarding breach of contract, and
- withdrawing claims related to another complaint forming part of the original claim.
The court discussed the application of s570 of the Act and observed that the provision reflected a legislative policy intended to protect parties to proceedings from orders for costs, so that parties with a genuine grievance do not abandon seeking a remedy due to fear of an adverse costs order.
Justice White cited Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission, reminding the parties that instances when costs will be awarded under s570 of the Act are likely to be exceptional and, further, that the question of whether a party's act or omission was unreasonable and caused the other party to incur costs is to be resolved by examining the circumstances of each case.
The court noted that, even if a party's conduct during the litigation process is shown to be genuine but misguided, inefficient, untimely or tardy, this alone is not determinative of whether the party acted unreasonably.
In deciding whether to award costs to Transfield, the court determined that Transfield had also engaged in the same acts and omissions it was accusing Mr Tsilibakis of. The court accepted that Transfield's own actions, through its lawyers, had an adverse effect on Mr Tsilibakis's ability to assess the viability of his claim pre-trial. The court noted that Transfield had:
- failed to file and serve sworn witness affidavits as directed
- did not deliver the five witness affidavits (two of which were unsworn) until seven days after the extended date set by the court
- were late in providing all material to counsel, as was arranged, so that he could prepare for trial before he went on leave, which further delayed proceedings, and
- delayed giving material to Mr Tsilibakis, which prevented his counsel from providing timely advice about his prospects and the need to withdraw some of his claims.
In refusing Transfield's application for costs, Justice White said:
" ...there would be an incongruity in doing so given that Transfield's own non-compliance with the pre-trial programming orders caused expense and inconvenience to the applicant, but in respect of which the applicant has not made any claim."
This decision is a timely reminder that lawyers and law firms must remain particularly vigilant when preparing and responding to applications, claims and pleadings in general, if they wish to avoid an assertion that their clients have not come to the table with 'clean hands', when seeking costs against an opposing party for unreasonable acts or omissions.
This article was originally published in the December 2015 edition of Proctor. Please click here to view the original version of this article.
 Fair Work Act 2009 (Cth) section 570.
 Tsilibakis v Transfield Services (Australia) Pty Ltd (No.2)  FCA 1048 (23 September 2015) per White J.
 Tsilibakis v Transfield Services (Australia) Pty Ltd  FCA 740 (21 July 2015) per White J.
 Tsilibakis v Transfield Services (Australia) Pty Ltd (No.2)  FCA 1048 (23 September 2015) per White J at paragraph 7 citing: Construction, Forestry, Mining and Energy Union v Clarke  FCAFC 143, (2008) 170 FCR 574 at ; Ashby v Slipper (No.2)  FCAFC 67, (2014) 314 ALR 84 at .
 Ibid– per White J at paragraph 7 citing: Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission FCAFC 199; (2006) 156 FCR 275 at .
 Ibid – per White J at paragraph 8 citing: Australian and International Pilots Association v Qantas Airways Ltd (No 3)  FCA 879; (2007) 162 FCR 392 at -.
 Tsilibakis v Transfield Services (Australia) Pty Ltd (No.2)  FCA 1048 (23 September 2015) per White J at paragraphs 31-34.
 Ibid at paragraph 43.