This extract from a decision of a very senior Full Bench of the Fair Work Commission is a very useful analysis of the principles which govern the award of costs in proceedings in the Commission together with an almost unheard of explanation of how party and party (not practitioner and client) costs might be calculated.
“[1] On 14 April 2023, Captain Lucas, who is the President of the Australian and
International Pilots Association (AIPA), filed an appeal against a decision made by
Commissioner Ryan of 13 April 20231
in which the Commissioner declined to recuse himself
from further dealing with matter C2023/1371 on the grounds of actual and apprehended bias.
Permission to appeal was required. The appeal was heard on 21 April 2023 in respect of whether
permission to appeal should be granted and Captain Lucas’ application for a stay. On 26 April
2023, we issued a decision refusing permission to appeal2
(appeal decision).
[2] On 10 May 2023, Qantas Airways Limited (Qantas), the respondent to the appeal,
applied for a costs order under s 611 of the Fair Work Act 2009 (Cth) (FW Act) in relation to
the appeal. Section 611 of the FW Act relevantly provides:
611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs
of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person
responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person
that the first person’s application, or the first person’s response to the application,
had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780. …
[2023] FWCFB 147
DECISION
[2023] FWCFB 147
2
[3] Qantas’ costs application is advanced under both s 611(2)(a) (specifically, that Captain
Lucas’ appeal was brought without reasonable cause) and s 611(2)(b). We note that even if
either subsection is satisfied, the Commission is not obliged to order costs. Whether costs are
to be awarded at all, and the amount of any costs that are awarded, involves the exercise of a
discretion.3
In Keep v Performance Automobiles Pty Ltd4
(Keep), a Full Bench of the
Commission summarised the principles relevant to when an application is made without
reasonable cause:
The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v
Eastern Health t/as Easter[n] Health Great Health and Wellbeing (Church). Church is authority
for the following propositions:
(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only
in a clear case.
(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the
meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.
(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask
whether upon the facts known to the applicant at the time of instituting the proceeding,
there was no substantial prospect of success.
(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted
for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’,
‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’.
[4] An application is not without reasonable cause simply because it is unsuccessful,
5
but
rather in circumstances where on the applicant’s own version of the facts, it is clear that the
proceeding must fail.6
[5] Similarly, the Full Bench in Baker v Salva Resources Pty Ltd7
stated:
The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable
prospect of success’ have been well traversed:
- ‘should have been reasonably apparent’ must be objectively determined. It imports an
objective test, directed to a belief formed on an objective basis rather than a subjective
test; and
- a conclusion that an application ‘had no reasonable prospect of success’ should only be
reached with extreme caution in circumstances where the application is manifestly
untenable or groundless or so lacking in merit or substance to be not reasonably arguable.
(footnotes omitted)
[6] Qantas submits that our conclusions in the appeal decision demonstrate that Captain
Lucas’ appeal was made without reasonable cause and/or had no reasonable prospect of success.
The factual premises on which these conclusions were expressed were well-known to Captain
Lucas, including at the time of filing the application for permission to appeal, and thus, Qantas
submits, Captain Lucas ought reasonably to have known that there were no substantial prospects
of success at that time. Qantas also submits that it was relevant that Captain Lucas’ notice of
appeal was filed a little over 24 hours after the decision under appeal was published, because
[2023] FWCFB 147
3
this demonstrated a lack of consideration of the merits and prospects of success of the appeal.
Qantas submits that there is no particular reason in this case as to why, having crossed the
threshold for the exercise of the costs power, the discretion should not be exercised in favour
of an order for costs.
[7] Qantas’ costs application was accompanied by an itemised schedule of costs drawn by
reference to the schedule of costs in Sch 3.1 to the Fair Work Regulations 2009 (Cth) (FW
Regulations). The total amount claimed is $18,424.00, of which the major component is
disbursements of $17,100.00 for counsel’s fees (calculated as 19 hours at $900.00 per hour).
Qantas also claims additional amounts as considered reasonable by the Commission for certain
costs items in accordance with Sch 3.1.
[8] Captain Lucas submits that there was a reasonably available argument that the decision
under appeal was attended by sufficient doubt as to warrant its review and that the appeal gave
rise to issues of importance and general application concerning disqualification by reason of
apprehended bias. Had either circumstance been established, he submits, it was likely that
permission to appeal would have been granted. In support of these propositions, Captain Lucas
submits that:
(1) It is an accepted principle that, where a later proceeding (notwithstanding that it
involves the same parties) will require the decision-maker to consider an issue
about which they had ruled in an earlier proceeding, this may be sufficient to give
rise to an apprehension of bias. This principle afforded reasonable cause for the
making of the application for permission to appeal. In this case, the issue decided
in an earlier proceeding before Commissioner Ryan was the admissibility of legal
advice received by the AIPA. That issue could have arisen in the proceedings
before the Commissioner in which the decision under appeal was made,
notwithstanding that Captain Lucas had not filed the advice as part of his
evidentiary case in those proceedings. Contrary to the conclusions in the appeal
decision, this legal advice did not constitute only a minor aspect of Captain Lucas’
evidentiary case, and he had identified the logical connection between the
Commissioner’s ruling on the admissibility of the advice in the earlier matter and
the feared deviation from the course of deciding the matter before him on its
merits.
(2) Although not accepted by the Full Bench, the argument and other grounds raised
by Captain Lucas in his notice of appeal articulated, at least, a reasonable cause
for the application for permission to appeal.
[9] Captain Lucas submits that the Commission is not in a position to find that it should
have been reasonably apparent to Captain Lucas that his application for permission to appeal
had no reasonable prospect of success because:
(1) The application was not made without reasonable cause.
(2) The grounds of appeal were not contrary to any authority. As stated in the appeal
decision, the application of the apprehended bias principle necessarily turned on
[2023] FWCFB 147
4
the particular facts and circumstances of the relevant matters. It was a question
about which reasonable minds might reasonably differ.
(3) There is no evidence that Qantas put Captain Lucas on notice that his application
for permission to appeal was manifestly untenable or groundless or so lacking in
merit or substance as to be not reasonably arguable
[10] As to the exercise of the discretion if it arises, Captain Lucas submitted that the award
of costs in the amount claimed would not be fair and just (see s 577 of the FW Act) because:
(1) If the application for permission to appeal was so lacking in merit or substance as
to be not reasonably arguable, then it must necessarily follow that relatively little
work was reasonably required to respond effectively to it – certainly not 19 hours
of counsel’s time. The hearing in fact only took one hour.
(2) There is no information contained in the itemised schedule as to the work done,
and claimed, by counsel. In that circumstance, the Commission is not in a position
to assess whether it would be fair and just to make an award in respect of those
costs.
[11] Captain Lucas therefore submits that any award of costs should be for the hearing and a
limited amount of preparation.
[12] We are satisfied, for the purpose of s 611(2)(a) of the FW Act, that Captain Lucas’
appeal application in this matter was made without reasonable cause because the grounds of
appeal, and the grounds upon which permission to appeal was sought, were untenable and
manifestly groundless. In the appeal decision, we concluded for the reasons there set out that
Captain Lucas’ case in his appeal that the Commissioner was disqualified from further dealing
with the matter before him was ‘completely without merit’ and that his appeal raised no
arguable case of appealable error.8 Those conclusions meet the threshold required by s
611(2)(a). We do not, as Captain Lucas’ submissions invite us to, propose to revisit those
conclusions now. Because we have reached the requisite state of satisfaction in respect of s
611(2)(a), it is not necessary for us to consider whether s 611(2)(b) also applies.
[13] We consider that we should exercise our discretion in favour of making an award of
costs in Qantas’ favour. Qantas was put to unnecessary expense in responding to the appeal,
and we consider that it was reasonable having regard to the nature of the issues raised by the
appeal that Qantas obtain legal representation for the hearing of the appeal. In this respect, we
take into account that Qantas sought permission for legal representation under s 596(2) of the
FW Act at the commencement of the hearing, that Captain Lucas did not oppose this
application, and that we accordingly granted permission.
[14] The appeal hearing only ran for a short period, as submitted by Captain Lucas, and
concerned only the preliminary issue of permission to appeal. We consider therefore that costs
should be awarded as appropriate for a short interlocutory hearing. Item 1301 of Sch 3.1 to the
FW Regulations treats counsel’s fees as a disbursement which may be charged at ‘[a]n amount
that the FWC considers to be fair and reasonable according to the circumstances of the case and
the seniority of counsel.’ We are guided as to what is fair and reasonable by the Federal Court
[2023] FWCFB 147
5
of Australia’s ‘National Guide to Counsel’s Fees’, which may be applied to the taxation of costs
in the Court. This guide allows for an amount in the range of $370.00 – $2,125.00 to be awarded
for junior counsel briefed in a short interlocutory hearing. Taking into account that the matter
was an application for permission to appeal before a Full Bench, and the Court’s guide has not
been updated since 2013, we propose to award the maximum amount in the range of $2,125.00.
In respect of Item 11, the attendance at the hearing by counsel’s instructing solicitors, Qantas
claims an amount of $442.00 for the attendance of two solicitors (charged at one hour each)
pursuant to item 1109 of Sch 3.1. We consider that the attendance of two solicitors was
unnecessary, so we will award an amount of $221.00.
[15] In respect of the pre-hearing costs claimed (including an unspecified proportion of
counsel’s costs), Qantas did not file a Form F53 notice to either advise it had engaged legal
representatives for the conduct of the appeal, as required by rule 11(1) of the Fair Work
Commission Rules 2013 (Cth), or to inform the Commission that it would be seeking permission
to be represented at the appeal hearing pursuant to rule 12A(1).
[16] However, when considering whether Qantas had placed Captain Lucas on notice prior
to the hearing that it was incurring costs for which he might potentially be liable,9 we note there
was confirmation from Qantas that it had engaged legal representation for the appeal which was
provided to the Commission and Captain Lucas in an email sent at 5.24 pm on 20 April 2023.
Further, this confirmation was provided within the following context:
(1) The appeal was lodged on Friday 14 April 2023 and almost immediately followed
another appeal (C2023/1931) arising out of the proceeding before Commissioner
Ryan, which was heard on Monday 17 April 2023 (the first appeal);
(2) In the first appeal, Qantas sought and was granted permission to be legally
represented by the Commission and its application was not opposed by Captain
Lucas;10
(3) The addressees listed in the Commission’s Notice of Listing for the appeal dated
18 April 2023 included the instructing solicitor and counsel for Qantas;
(4) Captain Lucas copied the instructing solicitor and counsel for Qantas into
correspondence sent to the Commission on 18 April 2023, in which reference was
made to ‘the Respondent’s representatives’;
(5) Both the Commission’s response to Captain Lucas sent on 19 April 2023, and its
further correspondence to the parties sent on 19 April 2023 with access to the
appeal book, copied in the instructing solicitor and counsel for Qantas; and
(6) Further correspondence from Captain Lucas to the Commission sent at 3.03 pm
on 20 April 2023 also copied in the instructing solicitor and counsel for Qantas.
[17] Additionally, Captain Lucas has conceded that if there is any award of costs, it should
be for the hearing and a limited amount of preparation. We therefore consider it appropriate to
award some costs in respect of pre-hearing work undertaken by Qantas’ legal representatives
[2023] FWCFB 147
6
because while Qantas did not obtain permission for legal representation until the
commencement of the hearing and the Commission made no direction requiring Qantas to take
any specific step prior to the hearing on 21 April 2023, the appeal nonetheless required a
response and some preparation.
[18] However, we are not persuaded that costs in the amount sought by Qantas are
appropriate, having regard to the following matters:
(1) There is no evidence, as Captain Lucas submitted, that Qantas took any step to
advise him that it considered that his appeal was not reasonably arguable and
untenable, or place him on notice that it might seek to recover costs from him if
his appeal failed. In our view, this is a matter to be weighed because parties
sometimes unreasonably initiate proceedings on the basis of flawed legal advice,
and such a notice may cause such a party to reconsider their position and seek
further or alternative legal advice.
(2) In respect of the claim for counsel’s fees, Qantas has not provided any particulars
of the pre-hearing work undertaken by counsel which would permit us to make an
assessment of the reasonableness of the incurrence of such costs.
[19] As to the itemised schedule of costs submitted by Qantas:
- Item 1 is a claim for perusing the Form F7 Notice of appeal in the amount of
$408.00 representing perusal by two solicitors pursuant to item 601 of Sch 3.1 to
the FW Regulations. We consider that perusal by two solicitors was unnecessary,
so we will award an amount of $204.00.
- Item 4 is a claim for perusing the letter from Captain Lucas to the Commission
dated 18 April 2023 in the amount of $144 representing perusal by two solicitors
pursuant to item 601 of Sch 3.1 to the FW Regulations. Regulation 6.06(4) of the
FW Regulations outlines that a folio equates to 72 words and a note in regulation
6.06(4) suggests there are generally three folios per page. The letter therefore
comprises approximately 18 folios and item 601(a)(ii) of Sch 3.1 allows $4.00 per
folio. Having regard to these factors, and our view that perusal by two solicitors
was unnecessary, we will award an amount of $72.00.
- Item 5 is in respect of a letter prepared but not sent. We decline to award an
amount for this.
- Item 6 is a claim for perusing the letter from the Commission to Captain Lucas
dated 19 April 2023 in the amount of $32 representing perusal by two solicitors
pursuant to item 601 of Sch 3.1 to the FW Regulations. Item 601(a)(i) of Sch 3.1
allows $16.00 for the perusal of a document of up to three folios. Having regard
to these factors, and our view that perusal by two solicitors was unnecessary, we
will award an amount of $16.00.
- Item 7 is a claim for perusing the appeal book in an amount considered reasonable
by the Commission (item 601(b) of Sch 3.1). We have however noted the appeal
[2023] FWCFB 147
7
book comprises material from the various proceedings involving Captain Lucas
and Qantas that the parties were already familiar with. We therefore consider item
701 of Sch 3.1, which covers the examination of an appeal book, to be appropriate
and will award an amount of $74.00 for a half hour examination by a solicitor.
- Item 8 is a claim for perusing the letter from Captain Lucas to the Commission
dated 20 April 2023 in the amount of $32, representing perusal by two solicitors
pursuant to item 601 of Sch 3.1 to the FW Regulations. Item 601(a)(i) of Sch 3.1
allows $16.00 for the perusal of a document of up to three folios. Having regard
to these factors, and our view that perusal by two solicitors was unnecessary, we
will award an amount of $16.00.
- Item 9 is a claim for drawing the bundle of authorities of Qantas pursuant to item
301 of Sch 3.1 to the FW Regulations in an amount considered reasonable by the
Commission. We therefore consider item 501 of Sch 3.1, which covers the
copying of documents at the rate of $2.00 per page, to be appropriate and will
award an amount of $86.00 for the 43 pages.
- Item 10 is a claim for drawing an ‘Overview of evidence’ document pursuant to
item 301 of Sch 3.1 to the FW Regulations, which was filed with the Commission.
Regulation 6.06(4) of the FW Regulations outlines that a folio equates to 72 words
and a note in regulation 6.06(4) suggests there are generally three folios per page.
The document comprises nearly seven folios and Item 301 of Sch 3.1 allows $8.00
per folio. Having regard to these factors, we will award the amount of $56.00
claimed.
- Item 12 is a claim for general care and conduct by the solicitors for Qantas
pursuant to item 1201 of Sch 3.1 to the FW Regulations. Item 1201 provides that
if the case or circumstances warrant it, an allowance may be claimed in addition
to any other item that appears in Sch 3.1, for general care and conduct in relation
to the complexity of the matter and the difficulty and novelty of questions raised,
the importance of the matter to the party and the amount involved, the skill, labour,
specialised knowledge and responsibility involved in the matter on the part of the
solicitor, the number and importance of the documents prepared or perused,
without regard to length, the time taken by the solicitor, research and
consideration of questions of law and fact. Pursuant to item 1201 the Commission
may allow an amount the Commission considers reasonable in the circumstances
of the case. In circumstances where Qantas has provided no particulars in relation
to these considerations, and noting this was a matter in which counsel was briefed,
we decline to make an award for item 12.
- Items 2 and 3 are claims for drawing a necessary document for counsel,
comprising a research note for counsel in relation to the Commission’s powers to
order a stay. We decline to order the amounts claimed on the basis that we are not
persuaded the document was necessary in the circumstances of this proceeding.
[20] As to counsel’s costs, the amount claimed (item 13 of the schedule of costs) is comprised
of 19 hours at the rate of $900.00 per hour inclusive of GST. We have already determined to
[2023] FWCFB 147
8
award $2,125.00 for the attendance of counsel at the hearing. The ‘National Guide to Counsel’s
Fees’ also allows for an amount for preparation time in the range of $265.00 – $530.00 per hour.
Consistent with our determination for the appearance at the hearing, we propose to award an
hourly rate at the maximum amount in the range. However, there are no particulars provided as
to work constituting the total hours claimed by counsel. We are therefore not persuaded the
total fees of counsel were reasonably incurred. We will however award an amount representing
four hours’ preparation, equating to $2,120.00.
[21] Accordingly, we award costs in Qantas’ favour to the amount of $4,990.00 pursuant to
s 611(2) of the FW Act. An order11 to give effect to this decision is published together with this
decision.”
Lucas v Qantas Airways Limited [2023] FWCFB 147 delivered 23 August 2023 per Hatcher J, Clancy DP, and Lee C