Grofski v Peabody Energy Australia PCI Mine Management Pty Ltd (No 2) [2026] FCA 124

This was a Federal Court costs ruling in a larger employment and whistleblower proceeding. Ms Holly Grofski had brought claims that included relief under Part 3-1 of the Fair Work Act and under the whistleblower protection provisions in Part 9.4AAA of the Corporations Act. The judgment says those claims arose from alleged adverse action connected with her employment at the Coppabella Coal Mine in central Queensland.

The decision did not resolve those underlying allegations. Instead, the Court was dealing with a narrower but commercially important question: when can respondents recover costs in a Fair Work and whistleblower case despite the usual statutory protection against adverse costs?

The immediate dispute concerned an interlocutory application filed on 26 August 2025. Through that application, Ms Grofski sought leave to file and serve a further amended originating application and a further amended statement of claim. If permitted, that pleading would have been the fifth version of the statement of claim served on the respondents.

The respondents said they had already spent considerable time trying to help identify defects in the pleading and had asked Ms Grofski to wait for the Court’s written reasons from an earlier hearing before pushing ahead with more case management steps. They argued that two aspects of her conduct were unreasonable: first, filing the amendment application when she did, and second, serving an extraordinary volume of changing material over the following weeks.

The timeline is central to understanding the result.

From as early as 14 May 2025, solicitors for the first to fourth and sixth to tenth respondents had told Ms Grofski there were fundamental deficiencies in her pleading. At that stage, the amended statement of claim was already 47 pages long with 140 paragraphs and annexures in table format. Those solicitors indicated they intended to provide more detailed criticism after other interlocutory issues were determined, with the aim of avoiding a strike-out application.

On 23 July 2025, the Court heard two separate interlocutory applications by Ms Grofski, one concerning joinder and another seeking to restrain MinterEllison from acting for certain respondents. The judge dismissed those applications and indicated that written reasons would follow. The transcript recorded that the parties might benefit from receiving those reasons before any further programming orders were made. Ms Grofski signalled agreement with that suggestion and later acknowledged it in writing.

Even so, in late July 2025 she made proposals about ongoing case management. By 8 August 2025, both sets of respondents’ solicitors had written to say they thought it appropriate to wait for the publication of the Court’s reasons before entering into further discussions, and that they would respond within seven days after the reasons were published.

On 18 August 2025, Ms Grofski wrote that, because nearly four weeks had passed since the hearing, she considered it appropriate to progress procedural matters that did not depend on the reserved reasons. She sought consent either to transfer related Supreme Court proceedings to the Federal Court or to amend her pleading to include claims under the Coal Mining Safety and Health Act that were then the subject of the Supreme Court matter. She said that if consent was not provided she would file an application for leave to amend on 25 August 2025.

On 22 August 2025, both sets of respondents’ solicitors again said they would await the Court’s reasons before responding. On 25 August 2025, Ms Grofski wrote to the judge’s associate saying she had filed the amendment application and explaining that, although she had said she would await the reasons, she considered it appropriate to progress procedural matters because the proceedings had already been on foot for over twelve months. The Court’s reasons from the July hearing were published on 26 August 2025.

That same day, Ms Grofski served the amendment application, a four-page written submission, an affidavit and a proposed further amended statement of claim that was 248 pages long. On 10 September 2025, respondents’ solicitors sent detailed critiques of the draft pleading. On 15 September 2025, the Court ordered that the final version of the draft pleading on which Ms Grofski wished to rely be provided by 3 October 2025.

On 3 October 2025, she served an amended interlocutory application, a second draft further amended statement of claim of 252 pages, a 24-page affidavit and 31 pages of written submissions. The Court later noted that the amendments were not shown in the manner required by rule 16.59 of the Federal Court Rules. After respondents asked for Word versions to compare the drafts, Ms Grofski refused but instead provided a 356-page comparison document. The respondents then filed written submissions on 31 October 2025 based on the second draft.

On 14 November 2025, Ms Grofski served yet another package: a further amended originating application, reply submissions, a third draft further amended statement of claim of 267 pages, and a 373-page comparison document. The Court treated that step as critical because it came after the respondents had already prepared submissions on the earlier version and because it was inconsistent with the order requiring the final version by 3 October 2025.

The Court set out the statutory framework in some detail. Section 570 of the Fair Work Act says a party to proceedings in relation to a matter arising under that Act may be ordered to pay another party’s costs only in limited circumstances. One of those circumstances is where the Court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs. Section 1317AH of the Corporations Act is in similar, though not identical, terms for certain whistleblower proceedings.

The judge emphasised that the bar is set relatively high. The reason is that section 570 curtails the ordinary costs discretion and operates as an access to justice provision. The Court referred to authority explaining that the discretion should be exercised cautiously and that the case for costs should be clear, because the policy is to avoid discouraging people with genuine grievances and arguable claims from commencing or continuing proceedings.

The Court also said that the principles developed under section 570 are equally applicable to section 1317AH. So the respondents could not succeed merely by showing that the litigation had been difficult, expensive or irritating. They needed to identify an unreasonable act or omission and show that it caused the costs they sought.

The Court split the respondents’ complaint into two parts and reached different conclusions on each.

First, the Court rejected the argument that filing the interlocutory application itself on 26 August 2025 was unreasonable. The judge accepted that the respondents had genuinely tried to assist and that, if Ms Grofski had waited for their detailed criticism after the earlier reasons were published, some costs might have been avoided. But the Court also accepted that she was self-represented, was reluctant to rely on advice from opponents, and felt pressure because the proceeding had already been on foot for a long time. In those circumstances, filing the application was described as, at most, unwise rather than unreasonable within the meaning of section 570 or section 1317AH.

Second, the Court accepted the respondents’ complaint about the volume and nature of the material later served. The problem was not just that the documents were long. The Court identified a series of defects: amendments were not made in the manner required by the Rules, additional causes of action may have been introduced without being clearly identified, respondents were renumbered, numbering systems differed within the document, cross-references contained errors, and schedules or annexures were used in a confusing way. The judge described the pleading as incoherent and incomprehensible.

The Court also considered the broader context. Ms Grofski had told the Court she was enrolled in a law degree to assist with the case, had access to pleading texts and had been assisted by exemplar pleadings. Even so, the Court recognised that she had set herself a very difficult task and was trying to pursue not only personal adverse action claims but also broader objectives concerning the Coal Mining Safety and Health Act. That context explained some of the complexity, but it did not excuse indefinite procedural non-compliance.

The decisive point was 14 November 2025. By then, Ms Grofski had already been ordered to provide the final version of the draft pleading by 3 October 2025. Although she had served a draft on 3 October, it was not in fact the final version on which she intended to rely. She then served a third draft on 14 November 2025 after all respondents had already filed written submissions on the second draft. The Court held that this was unreasonable conduct that caused the respondents to incur unnecessary costs.

The resulting order was limited and precise. The applicant was ordered to pay the respondents’ costs of and incidental to the interlocutory application filed on 26 August 2025, but only from 14 November 2025 onward. Those costs were to be assessed on a lump sum basis.

For employers and other respondents, the main lesson is procedural discipline. In Fair Work and whistleblower litigation, costs are not awarded in the ordinary way. If the other side serves defective or changing pleadings, your best protection is a careful record rather than broad complaints. Keep the chronology. Preserve every letter identifying deficiencies. Track each version of the pleading. Record when your lawyers had to redo work because the target moved. If there is a breach of orders, note exactly when it occurred and what extra work followed.

This case also shows the value of a targeted costs application. The respondents did not persuade the Court that the entire amendment process from August 2025 onward was unreasonable. They succeeded only from the point where the applicant served a further draft in breach of orders after submissions had already been prepared. That kind of narrow, evidence-based approach is often more persuasive than asking for everything.

For claimants, including self-represented ones, the message is equally practical. Costs protection under section 570 and section 1317AH is significant, but it is not a shield for endless amendments or non-compliance with court directions. If your case is complex, that may explain some drafting difficulty, but it does not remove the need to identify changes clearly, comply with pleading rules and stop the document from becoming a moving target.

Businesses should also note what this case does not say. It does not mean that a long pleading is automatically unreasonable. It does not mean a self-represented litigant will usually be ordered to pay costs. And it does not decide the merits of the underlying employment or whistleblower allegations. The decision is about the point at which litigation conduct itself became unreasonable enough to justify a limited costs order.

The judgment is especially useful because it identifies the kinds of documents and conduct that can matter on a costs application in this jurisdiction.

First, correspondence mattered. The respondents were able to point to letters showing they had identified deficiencies early, had proposed to provide detailed criticism after the Court’s reasons were published, and had warned that future interlocutory applications might force them to seek costs under section 570(2)(b). That helped show they were not simply complaining after the event.

Second, court orders mattered. The order of 15 September 2025 requiring the final version of the draft pleading by 3 October 2025 became a key reference point. Once the applicant later served another draft on 14 November 2025, the respondents could point to a concrete breach and to the work they had already done on the earlier version.

Third, the form of the pleading mattered. The Court did not criticise length alone. It focused on practical defects that made the document difficult to answer: non-compliance with the Rules, unclear introduction of possible new causes of action, renumbering of respondents, inconsistent numbering systems, cross-referencing errors, and confusing use of schedules or annexures. For businesses, that is a reminder that a costs argument is stronger when tied to objective procedural problems rather than subjective frustration.

Fourth, causation mattered. The applicant argued that the respondents had not shown what portion of their costs was caused by the allegedly unreasonable conduct. The Court did not accept a broad costs order from the date of filing the application, but it did accept that the later service of the third draft and associated materials caused unnecessary costs from 14 November 2025 onward. That is a practical example of how courts may confine costs to the period clearly linked to the unreasonable step.

This page is based on the Federal Court of Australia judgment in Grofski v Peabody Energy Australia PCI Mine Management Pty Ltd (No 2) [2026] FCA 124, delivered by Derrington J on 20 February 2026. The judgment is a short costs ruling in the Fair Work Division.

Because the reasons focus on costs, they provide only a limited picture of the underlying employment and whistleblower dispute. Readers should treat this as an explanation of the costs ruling and the statutory tests applied, not as a complete account of the broader proceeding.