| [2020] FWC 3586 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Anthony Stuckey
v
Prosegur Australia Pty Limited
(U2019/11055)
and
Prosegur Australia Pty Limited
COMMISSIONER PLATT |
ADELAIDE, 13 JULY 2020 |
Application for costs pursuant to ss.400A, 401 and 611 of the Fair Work Act 2009 –– unreasonable act – vexatious – no reasonable prospects of success – costs awarded against Applicant and Legal Representative.
[1] This is an application by Prosegur Australia Pty Limited (Prosegur) seeking an order for costs against Mr Anthony Stuckey pursuant to ss.400A and 611 of the Fair Work Act 2009 (the Act), and against his legal representative, Campbell Law, pursuant to s.401 of the Act.
[2] The application is made following the dismissal of an earlier application made pursuant to s.394 of the Act by Mr Anthony Stuckey. 1 The reasons for that decision are recorded in Anthony Stuckey v Prosegur Australia Pty Limited.2
[3] Directions were issued for the filing of submissions and replies by all parties. The following documents were received:
• Form F6 Application for Costs which included details of costs incurred dated 16 March 2020
• Submissions by Prosegur in respect of Mr Stuckey dated 3 April 2020
• Submissions by Prosegur in respect of Campbell Law dated 3 April 2020
• Reply submissions by Prosegur in respect of Mr Stuckey dated 30 April 2020
• Mr Stuckey’s submissions contained in emails dated 27 and 29 April 2020 (including attachments)
• Campbell Law’s submissions dated 24 April 2020
[4] A hearing was conducted via telephone conference on 4 May 2020. Prosegur was represented by Ms Simone Caylock of counsel, Mr Stuckey represented himself and Campbell Law was represented by Mr Tim Campbell of counsel. Leave was granted pursuant to s.596(2)(a) of the Act based on complexity and efficiency.
[5] On 4 May 2020, Mr Stuckey gave the following evidence about the interaction between the substantive matter and the South Australian Employment Tribunal (SAET) underpayment of wages claim:
“MS CAYLOCK: The offer was that you withdraw your claim and Prosegur would not make a cross-application like it's making now against you. That was the offer?---Yes, but if you offered no money, how did I know what the offer was?
The offer was that if you discontinued your claim Prosegur would agree not to make an application that you pay the costs that it had incurred up to that date, which is the application it's making now?---Okay. I remember that because there was no figure attached to that whole correspondence.
Do you remember your solicitors on your behalf replied, saying the only basis that you would settle your claim is if you were paid all of your outstanding - basically the wage underpayment claim that you had in the South Australian employment tribunal?---Okay, yes, I remember that, yes.”
[6] And shortly thereafter:
“MS CAYLOCK: Yes, thank you, Commissioner. Mr Stuckey, in response to that letter you did not have your solicitors advise the company that you would resolve or settle or discontinue your unfair dismissal claim if it paid you the amounts that you are describing for long-service leave and notice, did you?---At the time I believed they were - the unresolved case, they were trying to leverage against the company to do the right thing. That's as I understood it.
THE COMMISSIONER: Sorry, could you say that again, Mr Stuckey?---I believe that the outstanding case at the time, which was the unpaid wages through that period of time, of my suspension, was the leverage I suppose they were trying to make the company to do the right thing by a settlement offer.”
[7] Mr Stuckey then gave the following evidence concerning advice he was given by Campbell Law:
“THE COMMISSIONER: Okay. Mr Stuckey, did Campbell Law, at any stage, give you an assessment as to the likelihood of your success?---No. I've dealt with a lot of lawyers over the last four years and no one does that. No one does that.
Whereabouts - - -?---Not one company or not one lawyer has ever said what the likelihood or what the success rate or any sort of factor at all. They do not do that.
So let me just ask about the unfair dismissal in particular?---Yes.
And Campbell Law - - -?---Yes.
- - -in particular. Did Campbell Law ever give you an assessment of the prospects of success of your case?---No. (emphasis added)
[8] Mr Campbell objected and advised that:
“It now appears that Mr Stuckey is waiving privilege and if that's the case and he’s now giving evidence and waiving privilege we cannot proceed because this is new evidence. It is now something that is now that I need to respond to in terms of taking - giving evidence myself as to how Campbell Law acted.” 3
[9] Mr Campbell sought an adjournment so interalia he could give evidence to refute what Mr Stuckey had said. The matter was adjourned to 29 May 2020.
[10] On 29 May 2020, Campbell Law was represented by Ms Michelle Hamlyn of counsel. Mr Stuckey gave further evidence. No further evidence was presented by Campbell Law, nor was Mr Stuckey’s evidence of 4 May 2020 concerning Campbell Law challenged or refuted.
[11] Campbell Law filed Mr Stuckey’s unfair dismissal application on 2 October 2019. 4 The factual background of the substantive matter is detailed in paragraph [8] of the decision.5 The evidence was summarised in paragraphs [10]-[12] of the decision.6 The submissions of Mr Stuckey are summarised at paragraph [16] and Prosegur at paragraph [18].7
[12] I determined that the dismissal of Mr Stuckey was not harsh, unjust or unreasonable and that he was not unfairly dismissed, with my reasons detailed at paragraphs [24]-[58]. 8
[13] I found that, Mr Stuckey lacked the capacity to perform the duties of his role with Prosegur. The gap between the role requirements and Mr Stuckey’s capacity was substantial and ongoing. During closing submissions Ms Boland of Campbell Law, on behalf of Mr Stuckey, conceded that Mr Stuckey was unable to fulfil the inherent requirements of the role. This concession was consistent with the evidence and submissions of Mr Stuckey. There were no procedural defects in the dismissal.
[14] Mr Stuckey’s substantive case appeared solely grounded in his contention that the dismissal was harsh, unjust or unreasonable as a result of:
• the lengthy period of unjust behaviour which included him not being paid,
• the failure of Prosegur to modify his duties or provide alternative employment,
• the fact that his work performance and/or history had not been questioned,
• suffering considerably on a personal level.
[15] Some of these issues were sought to be litigated in other actions but none proceeded to finality for a variety of reasons.
[16] Prosegur submits that Mr Stuckey’s application was brought vexatiously and for a collateral purpose in that it was brought to further the pursuit of his underpayment of wages claim before the SAET. Whilst giving evidence during the costs hearing, Mr Stuckey admitted that the application was being used as ‘leverage’ for his underpayment of wages claim. 9
[17] Prosegur’s submissions are substantially the same in respect to each s.611(2)(a) and s.611(2)(b).
[18] Prosegur submits that a reasonable person in Mr Stuckey’s position would have determined the application had no reasonable prospects of success at or before the time the application was made because:
• Mr Stuckey had been absent from work for more than 4 years prior to the time the application was made.
• It was evident to Mr Stuckey that he had no capacity to perform his role.
• On Mr Stuckey’s own evidence, it was apparent the application was doomed to fail.
• Costs should be awarded from the date of lodgement of the application.
[19] Prosegur submits that:
• On a proper assessment of Mr Stuckey’s case in relation to liability and the relief sought, it was (or should have been) apparent to Mr Stuckey that his application had no reasonable prospects of success and that its commencement and continuation was an unreasonable act.
• Mr Stuckey’s application was dismissed based on undisputed evidence and the application of established legal principles.
• If the material filed by the parties had been appropriately assessed, it would have led to the conclusion that Mr Stuckey’s claim was unlikely to succeed. This included Mr Stuckey’s evidence that he was unfit for work and Prosegur’s unchallenged evidence that it did not have any alternative roles available.
[20] Prosegur submits that the Commission may award costs against a lawyer or paid agent under s.401 of the Act and that the jurisdictional requirements have been met in this instance.
[21] Prosegur submits that costs should be awarded against Campbell Law on the basis that:
• Campbell Law caused Prosegur to incur costs because it encouraged Mr Stuckey to start and continue the unfair dismissal application when it should have been reasonably apparent that it had no reasonable prospect of success.
• Campbell Law acted for Mr Stuckey on a ‘no win no fee’ basis which further supports the above proposition.
• Campbell Law were intimately familiar with and involved in the events which preceded the making of Mr Stuckey’s unfair dismissal application, including receiving correspondence associated with Mr Stuckey’s dismissal on his behalf and representing Mr Stuckey in an underpayment of wages claim.
• Mr Stuckey was represented by two legally qualified professionals and as such Campbell Law should be measured against a higher standard that that which would apply to an unrepresented party.
• Campbell Law acted unreasonably in advising or encouraging Mr Stuckey to refuse to explore any basis for settlement.
[22] Prosegur’s position is that costs should be awarded from 2 October 2019, the date of lodgement of the Application.
[23] In the alternative, Prosegur submits that costs should be awarded from 11 October 2019, the date it filed its Form F3 Employer Response.
[24] In the second alternative, Prosegur submits that costs should be awarded from 4 December 2019, the day after Mr Stuckey rejected Prosegur’s offer to settle 10 (which included an assertion that the case had no reasonable prospects of success) made on 3 December 2019.
[25] In the third alternative, Prosegur submits that costs should be awarded from 12 December 2019 when Prosegur filed its detailed submissions and witness statements.
[26] Prosegur seeks that the Commission exercise its discretion to award indemnity costs or in the alternative party-party costs.
[27] Mr Stuckey made a submission and gave evidence at the hearing.
[28] Mr Stuckey gave evidence that he did not receive an assessment of his prospects of success by Campbell Law. This evidence was unchallenged. Mr Stuckey did not provide any further information as to any legal advice that he had received.
[29] Mr Stuckey provided details of his Centrelink income and his expenses which, whilst modest, exceeded his income.
[30] Section 611(1) of the Act provides that ordinarily each party bears their own costs subject to the exceptions contained in s.611(2) of the Act.
[31] Campbell Law contends that it did not cause Prosegur to incur costs because it encouraged Mr Stuckey to start and continue his application when it should have been reasonably apparent that it had no reasonable prospects of success, nor did it cause costs to be incurred by an unreasonable act or omission with respect to the conduct or continuation of the application, and as a result the application should be dismissed.
[32] Campbell Law contend that Mr Stuckey’s application was neither speculative nor without some reasonable prospect of success because:
• the dismissal was motivated (in whole or at least in part) by Mr Stuckey’s underpayment of wages claim and this was a breach of the General Protections Provisions.
• The procedural process undertaken by Prosegur.
• The conduct of Prosegur between 2015 and 2019.
• The failure of Prosegur to comply with its obligations under the Disability Discrimination Act 1992 to make reasonable adjustments (provide alternative duties).
• The impact of the dismissal on Mr Stuckey.
• Despite the rejection of Mr Stuckey’s workers compensation claim he continued to identify an injury which limited his physical abilities.
[33] The fact that the application was not successful does not mean it was made without reasonable cause.11
[34] The Commission should be cautious in the exercise of its discretion to award costs.12
[35] The assessment or reasonableness should be made at the point in time the proceedings were instituted.13
[36] Prosegur has not advanced any facts which establish that Campbell Law positively encouraged14 Mr Stuckey to commence or continue with his application.
[37] It should be assumed that a person is acting on advice and they make their own decisions with the solicitor taking instructions and following them.
[38] If there were no legal representatives willing to act on a ‘no win no fee’ basis a key objective of the Act (low cost access for industrial justice) would not be met.
[39] There was nothing objectionable about seeking a settlement to resolve all proceedings (and potential proceedings). Seeking compensation for unpaid wages as part of an unfair dismissal process is not a collateral purpose.15 In Cheng v Western Pursuits Trust (No.2)16 Justice Driver declined to award costs where a settlement offer was rejected as it was a ‘walkaway’ offer.
[40] The relevant authority as to the application of s.611(1) is Church v Eastern Health.17
[41] In its reply submissions Prosegur contended that:
• The Commission found that Mr Stuckey was not dismissed because he made the underpayment of wages claim.
• No procedural deficiencies were found.
• The conduct between 2015 and 2019 pre-dated the dismissal.
• The impact of the Disability Discrimination Act 1992 had never been raised.
[42] The power to award costs is discretionary and subject to specified statutory prerequisites. The presumption under the Act is that each party bears their own costs.
[43] Section 611 of the Act provides as follows:
“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.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).” (emphasis added)
[44] The test is an objective one, where the Commission must discern whether it would have been apparent to a reasonable person in the position of Mr Stuckey that the application had no reasonable prospects of success.18
[45] The relevant authority as to the application of s.611(1) is Church v Eastern Health.19
[46] Section 400A of the Act provides as follows:
“400A Costs orders against parties
(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.” (emphasis added)
[47] A decision to award costs pursuant to s.400A of the Act requires a consideration of whether Mr Stuckey, by some unreasonable act or omission, caused Prosegur to incur costs.
[48] Section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 states:
“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.
169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.” (emphasis added)
[49] Section 401(1A) of the Act provides as follows:
“401 Costs orders against lawyers and paid agents
…
(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:
(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or
(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under this section only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.”
[50] At paragraph 1611 of Explanatory Memorandum to the Fair Work Bill 2008 it states:
“1611. These provisions are designed to deter lawyers and paid agents from encouraging others to bring speculative unfair dismissal claims, particularly claims they know have no reasonable prospects of success, or to unreasonably encourage a party to defend a claim or make a jurisdictional argument where there is no prospect of the argument succeeding.”
[51] There is no dispute that the Commission has power under s.401 of the Act to make a costs order against a lawyer or paid agent (the representative).
[52] The fact that Campbell Law may have acted on a ‘no win, no fee’ basis does not appear to be relevant to any of the matters I am required to consider in this application.
[53] There is no information before me that establishes that Campbell Law encouraged Mr Stuckey to start or continue the matter. There is no evidence before me that supports the contention that Campbell Law advised or encouraged Mr Stuckey to refuse to settle the matter.
[54] There is, however, evidence before me that Campbell Law omitted to provide Mr Stuckey with any advice as to the prospects of success of his application, despite Mr Campbell being given approximately 4 weeks to put any evidence to contest Mr Stuckey’s evidence he was not given an assessment of prospects of success of his claim. That Campbell Law did not provide Mr Stuckey with an assessment of his prospects of success is extraordinary. In my view the failure to provide an assessment represents an unreasonable omission. It may also represent a breach of the Australian Solicitor Conduct Rules.
[55] A proper assessment of the information provided by Mr Stuckey (reinforced when Prosegur’s submissions were received) should have resulted in Mr Stuckey being advised that the lodgement and continued pursuit of his application was at best speculative. In my view this omission on the part of Campbell Law enlivens a discretion to award costs.
[56] The meanings of the terms ‘vexatiously’ and ‘without reasonable cause’ were discussed in Church.20 The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain a collateral advantage.3
[57] The meaning of the term ‘vexatious’ was considered by Asbury C in Mokomoko v Zennforce Protection Group Pty Ltd:21
“[13] The circumstances in which an application will be found to have been made vexatiously were discussed by Justice North in Nilsen v Loyal Orange Trust as follows:
“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceedings. It is an alternative ground to the ground based on lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceedings. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.”
[14] In Attorney-General v Wentworth Roden J observed that litigation may be regarded as vexatious on objective or subjective grounds and that the test could be expressed as follows:
“1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought;
2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the Court adjudicate on the issues to which they give rise.
3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless...” (citations omitted)
[58] Mr Stuckey gave unequivocal evidence that the unfair dismissal application was being used as a leverage to secure a resolution in an underpayment of wages claim in the SAET. 22 This description when considered in light of the facts and the lack of prospects of success of his claim appears to be correct.
[59] Whilst it is not unusual for claims to be pursued simultaneously in the SAET and the unfair dismissal jurisdiction and for settlement discussions to occur in an effort to resolve both matters, Mr Stuckey clearly described the substantive claim was ‘leverage’ in respect of the SAET underpayment of wages proceedings.
[60] Mr Stuckey’s admission in relation to his purpose in pursuing the claim is not analogous to the seeking of a settlement to resolve all proceedings, which might include seeking compensation for unpaid wages as part of a meritorious unfair dismissal claim. In my view, the use of an unmeritorious unfair dismissal claim as leverage is vexatious when considered against the description of collateral purpose in Attorney-General v Wentworth, and enlivens my discretion to award costs against Mr Stuckey.
[61] Mr Stuckey was advised in writing of the basis of his impending termination on 22 August 2019 by way of a ‘show cause’ letter. He was represented by a lawyer at the time. No response was provided and he was dismissed on 12 September 2019.
[62] As can be seen in the summary of the substantive proceedings, there was no contest that Mr Stuckey was unable to perform the inherent requirements of his role. The gap in respect of those requirements was considerable. Whilst Mr Stuckey contended that his dismissal was harsh, unjust or unreasonable, the basis for that argument was not supported by any previous authority.
[63] Mr Stuckey is not well versed in employment law and appears to have relied on the expertise of Campbell Law. Campbell Law failed Mr Stuckey in omitting to appraise him of the prospects of success of his case.
[64] Whilst it appears that Mr Stuckey was aware at the time the application was lodged that he was, at the time of dismissal and thereafter, unable to fulfil the inherent requirements of the role, I accept that he reasonably believed the dismissal was harsh.
[65] In my view it would not be appropriate to hold Mr Stuckey accountable for the flaws in his view that the dismissal was harsh at the time the application was lodged in light of his lack of knowledge of the law and reliance on his legal advisors.
[66] Mr Stuckey was put on notice on 3 December 2019 about Prosegur’s view that his case had no prospects of success.
[67] However, at the point that Prosegur’s evidence and submissions were provided to Mr Stuckey (allowing a week to review and consider the material), Mr Stuckey should have realised that his application had no reasonable prospect of success and that the continued pursuit of his application was speculative.
[68] In my view the continuation of this claim beyond 19 December 2019 was an unreasonable act in connection with the conduct and continuation of the matter that enlivens my discretion to award costs.
[69] I have considered the contentions made by Campbell Law which suggest that the claim had some prospect of success as a result of the matters raised in paragraph [32].
[70] In the substantive decision I did not find that the dismissal was motivated by Mr Stuckey’s underpayment of wages claim. I found no fault with the procedure adopted nor with the conduct of Prosegur between 2015-2019.
[71] Prosegur’s compliance with the Disability Discrimination Act 1992 was not raised at the substantive hearing.
[72] The fact that Mr Stuckey continued to identify an injury which limited his physical abilities was not in dispute and contributed to my finding that Mr Stuckey was unable to fulfil the inherent requirements of the role.
[73] I rely on the observations made in paragraphs [62]-[67] above.
[74] For the same reasons I find that Mr Stuckey should have reasonably been aware that the application had no reasonable prospect of success from 19 December 2019 (after the provision of Prosegur’s material and allowing one week for review). This enlivens my discretion to award costs from 19 December 2019.
[75] Having considered all of the circumstances in this matter (including Mr Stuckey’s personal position), I believe it is an appropriate exercise of my discretion to award costs. That a party is in a poor financial position does not insulate them from an award of costs, but may influence the amount of time granted to pay any award.
[76] Prosegur have contended it is appropriate for the costs to be calculated on an indemnity basis.
[77] The authority in Stanley v QBE Management Services Pty Limited T/A QBE23 is relevant on the basis that the proceedings were commenced for an ulterior motive, or a party persists in what is, when properly considered, a hopeless case.
[78] It is extremely rare for the Commission to order indemnity costs and therefore a high level of caution must be exercised. I agree with the remarks of Mortimer J in Ryan v Primesafe24 in relation to s.570 of the Act, which I note is almost identical to s.611 of the Act:
“[64] … The reason for caution is the potential for discouraging parties’ pursuit in a complete and robust way of the claims for contravention which they seek to make under the Fair Work Act, or the defence of such claims. The policy behind s 570 is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular, in my opinion) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision. Insofar as it operates to the benefit of respondents, it is designed to ensure respondents feel free to pursue arguable legal and factual responses to the claims made against them.”
[79] A Full Bench of the AIRC in Goffett v Recruitment National Pty Ltd25 set out the principles generally adopted when considering an application for costs on an indemnity basis:
“[49] In Australian Transport Insurance Pty. Ltd. v Graeme Phillips Road Transport Insurance Pty. Ltd Woodward J dealing with a costs application in the Federal Court of Australia isolated the following principle in relation to indemnity costs:
“Courts in both the United Kingdom and Australia have long accepted that solicitor and client costs can properly be awarded in appropriate cases where ‘there is some special or unusual feature in the case to justify the court exercising its discretion in that way’ (Preston v Preston (1982) 1 All ER 41 at 58). It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but in all the cases I have considered, there has been some further factor which has influenced the exercise of the court’s discretion - for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties: see Andrews v Barnes (1888) 39 Ch D 133; Forester v Read (1870) 6 LR Ch App Cases 40; Christie v Christie (1873) 8 Ch App Cases 499; Degmam Pty Ltd (In Liq) v Wright (No 2) (1983) 2 NSWLR 354.” (emphasis added)
[50] In Oshlack v Richmond River Council, Gaudron and Gummow JJ said:
“It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a ‘solicitor and client’ basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.”“ (emphasis added)
[80] In Colgate-Palmolive Co v Cussons Pty Ltd,26 Sheppard J set out some useful examples of circumstances that warrant the exercise of the discretion to award indemnity costs:
“… it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in I-Corp (supra); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Keng (unreported, Court of Appeal, NSW, Kirby P, Priestley JA, Cripps JA, No 40744/1992, 27 September 1993) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records (supra)).” (emphasis added)
[81] I further note Mortimer J’s remarks in Primesafe about Colgate-Palmolive:
“[114] One theme which might be said to run through the factors listed by Harper J in Ugly Tribe, and by Sheppard J in Colgate-Palmolive 46 FCR 225, is a level of blameworthiness which involves conscious or deliberate choices to flout the norms by which litigation is usually conducted, and courts expect it to be conducted. I cannot be satisfied on the evidence before me that Mr McDonald’s conduct is attended by that level of disregard. His choice to name Mr Humphery-Smith was unusual. He failed to articulate a proper factual and legal basis for it in his pleading, or in particular when sought. Whether he did so with some ulterior motive or purpose, or wilfully closing his eyes to his professional obligations, are not conclusions I am prepared positively to reach on the evidence before me.” (emphasis added)
[82] I have found that Mr Stuckey’s claim was vexatious and I have found that from 19 December 2019 his claim had no reasonable prospect of success.
[83] I believe that Mr Stuckey’s desire to use the unfair dismissal proceedings as leverage for another matter represents the delinquency described in Oshlack.
[84] In respect of Campbell Law, I have found that the delinquency is present as a result of its failure to give Mr Stuckey an assessment of his prospects of success.
[85] Accordingly, I have determined that it is appropriate to award indemnity costs from 19 December 2019.
[86] Pursuant to s.611(2)(a), s.611(2)(b), and s.400A in respect of Mr Stuckey and s.401 in respect of Campbell Law, I order Prosegur’s costs be paid by both Mr Stuckey and Campbell Law on an indemnity basis from 19 December 2019. The quantum of these costs has been calculated from the table of costs provided as $9,071.50.
[87] I award costs in that amount.
[88] As a result of my finding against both Mr Stuckey and Campbell Law, it is appropriate that I determine the percentage allocation of the costs.
[89] Both Mr Stuckey and Campbell Law have contributed equally and accordingly the cost apportionment shall be divided equally, that is $4,535.75 each.
[90] The costs are to be paid within a timeframe agreed or in the absence of agreement - in the case of Mr Stuckey (in light of his financial position) - 56 days from the date of this decision and for Campbell Law - 14 days of the date of this decision.
[91] An Order giving effect to this decision will be issued.27
COMMISSIONER
Appearances:
Ms S Caylock of counsel on behalf of Prosegur Australia Pty Limited.
Ms M Hamlyn of counsel on behalf of Campbell Law.
Mr A Stuckey on his own behalf.
Hearing details:
2020.
Adelaide:
May 4, 29.
Printed by authority of the Commonwealth Government Printer
<PR720842>
1 U2019/11055.
3 Transcript 4 May 2020, PN55.
4 See Form F2 Unfair Dismissal Application.
9 Transcript 29 May 2020, PN136-139.
10 See Form F6 Notice to Appeal attachment 2,
11 One Tree Community Service Inc v United Voice [2020] FCA 500, [3].
12 Ryan v Primesafe [2015] FCA 8 and Explanatory Memorandum to Fair Work Bill 2008 in relation to s.401.
13 Sun Health Foods Pty Ltd v Just Relations – Consultants [2014] FWC 2280.
14 Khammaneechan v Nanakhon Pty Ltd ATF Nankhan Trading Trust T/A Banana Tree Café [20110 FWA 651, [22].
15 Holland v Nude Pty Ltd T/A Nude Delicafe [2012] FWCFB 6508.
16 [2017] FCCA 659.
17 [2014] FWCFB 810 (‘Church’).
18 Walker v Mittagong Sands (T/A Cowra Quartz) [2011] FWA 2225 at [43].
19 [2014] FWCFB 810 (‘Church’).
22 See PN122, 136, 137
24 [2015] FCA 8 (‘Primesafe’).
26 (1993) 46 FCR 225 at 233.