Liu v Stephen Grubits and Associates (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 13 March 2019
• Neutral Citation: [2019] FCAFC 42
• Date: 13 March 2019
• Court: Full Federal Court (Australia)

FEDERAL COURT OF AUSTRALIA

Liu v Stephen Grubits and Associates (No 2) [2019] FCAFC 42

Appeal from:	Liu v Stephen Grubits and Associates (No 2) [2018] FCCA 842
File number:	NSD 783 of 2018
Judges:	REEVES, KERR AND LEE JJ
Date of judgment:	13 March 2019
Legislation:	Fair Work Act 2009 (Cth) s 570 Federal Circuit Court of Australia Act 1999 (Cth) s 79
Cases cited:	Cross v Harbour City Ferries Pty Ltd t/as Harbour City Ferries (No 2)[2017] FCCA 1713 Liu v Stephen Grubits and Associates [2019] FCAFC 24 Liu v Stephen Grubits & Associates (No 2) [2018] FCCA 842 Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72
Date of hearing:	Heard and determined on the papers
Date of last submissions:	1 March 2019
Registry:	New South Wales
Division:	Fair Work Division
National Practice Area:	Employment & Industrial Relations
Category:	No Catchwords
Number of paragraphs:	23
Counsel for the Appellant:	Mr I Chatterjee
Solicitor for the Appellant:	AHL Legal
Counsel for the Respondent:	Mr C Lambert
Solicitor for the Respondent:	Michael Green Legal

ORDERS

		NSD 783 of 2018
BETWEEN:	YUNLONG LIU Appellant
AND:	STEPHEN GRUBITS & ASSOCIATES Respondent

JUDGES:	REEVES, KERR AND LEE JJ
DATE OF ORDER:	13 March 2019

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

THE COURT:

1. On 12 February 2019 the Court delivered reasons for dismissing an appeal from a costs order made in the Federal Circuit Court of Australia (FCCA): Liu v Stephen Grubits and Associates [2019] FCAFC 24 (Grubits). That costs order had been made in relation to an application under the Fair Work Act 2009 (Cth) (FW Act). The unsuccessful appellant had contended that the FCCA had no power to make such an order.

2. The parties were given leave to file written submissions on the question of costs of the appeal. Both filed written submissions. Their submissions were considered by the Court.

3. On 5 March 2019 the parties were advised that the Court had determined that there be no order as to costs. The parties were advised that a sealed copy of the Court’s orders would be available the following day. Orders were made accordingly. The parties were advised that the Court did not propose to publish formal reasons in respect of costs unless so requested.

4. On 7 March 2019 the Court was made aware of a request. These are our reasons.

5. As a general rule, in an appeal determined by this Court costs follow the event. However, as we observed in Grubits at [13], s 570 of the FW Act provides that a party may be ordered to pay costs with respect to matters arising under that Act only in the circumstances set out in subs (2) (a), (b), or (c) of that section. That constraint applies to this appeal.

6. Section 570 is in the following terms:

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) or section 569 or 569A.

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:

(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

(c) the court is satisfied of both of the following:

(i) the party unreasonably refused to participate in a matter before the FWC;

(ii) the matter arose from the same facts as the proceedings.

The parties’ submissions The appellant’s submissions

7. The appellant submits that he has not engaged in any unreasonable acts or omissions causing the respondent to incur additional costs. He accepts that his notice of appeal as initially filed was not in the correct form, but submits that prior to the hearing of the appeal his contentions were “reduced to cogent grounds” after he had obtained legal representation.

8. The appellant submits that, although the appeal was dismissed, it was not brought vexatiously or without reasonable cause, and was at least arguable. In that regard, he submits that a judge of this Court had granted him leave with respect to the issue; that the construction of s 570 of the FW Act contended for by the appellant was consistent with the decision in Cross v Harbour City Ferries Pty Ltd t/as Harbour City Ferries (No 2)[2017] FCCA 1713; and that his contention that s 570 (and equivalent predecessors) operates as a restriction on a general power to award costs rather than as a source of power was consistent with the reasoning of numerous decisions of this Court (both single judge and Full Court), although in a different context.

9. The appellant submits that costs orders are compensatory, citing Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 per Gaudron and Gummow JJ at 89. In circumstances where the respondent’s proposed construction of s 79 of the Federal Circuit Court of Australia Act 1999 (Cth) was rejected, and the issues that were dispositive of the appeal were not identified by the respondent prior to the hearing, the appellant submits it is inappropriate that an order for costs be made.

The respondent’s submissions

10. The respondent submits that the appeal is the culmination of proceedings improperly conducted and maintained by the appellant, which from the outset had no reasonable prospects of success. The respondent would not have been put to the cost of defending the appeal, despite the fact that the dispositive issues were not initially raised, if the appellant had not pursued proceedings entirely lacking prospects of success. The respondent submits that the Court should have regard to the appellant’s course of conduct from the commencement of the proceedings before the Fair Work Commission in October 2016, given that the appeal “springs entirely” from misconceived applications to the FCCA and to this Court.

11. The respondent submits that the appellant acted unreasonably in the proceedings before the primary judge, citing [18]-[38] of his Honour’s reasons: see Liu v Stephen Grubits & Associates (No 2) [2018] FCCA 842. The respondent contends the appellant expressed personal enmity towards the respondent’s legal representatives and defamed both the respondent and its counsel. The respondent submits that the proceeding before the primary judge lacked any prospect of success, citing [47]-[51] of his Honour’s reasons.

12. The respondent notes that the appellant initially sought to apply for an extension of time using a FCCA form bearing the FCCA file number (being the file number allocated to the proceeding from which he sought to appeal). The grounds of appeal identified therein contained “verbose ramblings” and sought to introduce new evidence on appeal....