Background
Gunilla Rindeklev brought two proceedings against the Commonwealth, her former employer. The proceedings were dismissed after trial in Rindeklev v Commonwealth of Australia (No 2) [2026] FCA 764. The Court then determined the Commonwealth’s application for costs on the papers.
The Commonwealth argued that Ms Rindeklev had commenced the claims without reasonable cause, pursued them in a confusing and prolix way, and unreasonably rejected settlement offers. Each offer proposed that the proceedings end with no payment or other relief to Ms Rindeklev and each side bearing its own costs.
The Court’s Holding
Justice Colvin held that the costs discretion was constrained by s 570 of the Fair Work Act 2009 (Cth), which permits a costs order only in specified circumstances, including where a party’s unreasonable act or omission caused the other party to incur costs. The Court rejected the Commonwealth’s contention that the entirety of both proceedings, or their continuation after the offers, was unreasonable.
However, Ms Rindeklev had unreasonably persisted with significant parts of the case to trial and presented aspects of it in a discursive and obscure manner. While some claims were reasonably brought or pursued, the Court found unreasonable conduct in relation to several claims and in the way Claim 5 was pursued. It ordered her to pay 50% of the Commonwealth’s specified trial-attendance and counsel-preparation costs.
Key Takeaways
- Section 570 protects Fair Work litigants from ordinary costs consequences, but does not shield objectively unreasonable conduct.
- Rejecting a settlement offer can be unreasonable, but must be assessed at the time of the offer without hindsight.
- Self-represented parties remain subject to procedural obligations and may face a targeted costs order for unreasonable conduct.
Why It Matters
The decision illustrates the Federal Court’s cautious, claim-by-claim approach to costs under s 570. An unsuccessful employee will not automatically pay costs, even after rejecting settlement offers.
But the protection has limits: pursuing hopeless allegations or presenting a case in an unnecessarily unclear and unfocused way may justify a proportionate costs order tied to the resulting expense.