Costs in the Fair Work Commission

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One of the major considerations which the Fair Work Commission has regard to when determining whether to order an unsuccessful party to pay the other party’s costs of proceedings is whether or not the unsuccessful party “had no reasonable prospects of success” Here is the case law explained in an extract from a recent Fair Work Commission case on the point.

“Meaning of ‘no reasonable prospects of success’ (s 611(2)(b))

[14] The High Court in Spencer v Commonwealth of Australia (2010) 241 CLR 118 considered the meaning of the phrase ‘no reasonable prospects of success’, albeit in the context of s 31A of the Federal Circuit Court of Australia Act 1976. The plurality (Hayne, Crennan, Kiefel and Bell JJ) said:

‘59 In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like “clearly”, “manifestly” or “obviously”) as “frivolous”, “untenable”, “groundless” or “faulty”. But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word “reasonable”, in the phrase “no reasonable prospect”, be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a “frivolous”, “untenable”, “groundless” or “faulty” claim.

60 Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.’

[15] In Baker v Salva Resources Pty Ltd [2011] FWAFB 4014, the Full Bench said at [10]:

‘[10] 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 as to be not reasonably arguable.’

See also: Qantas Airways Limited v Carter [2013] FWCFB 1811 (‘Qantas v Carter’).”

Roche v Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga (2020) FWC 326 22 January 2020 per