1
Fair Work Act 2009
s.394—Unfair dismissal
Rebecca Jones
v
Brite Services
(U2013/6001)
DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 5 JULY 2013
Application for costs.
Introduction
[1] On 29 May 2013 I issued a decision concerning an application by Ms Rebecca Jones
under s.394 of the Fair Work Act 2009 (Act) (UFD Application) in which I decided that the
termination of Ms Jones’ employment by Brite Services on 17 January 2013 was not harsh,
unjust or unreasonable. On 5 June 2013, Brite Services (Costs Applicant) applied for an order
under s.611 of the Act that Ms Jones (Costs Respondent) bear some or all of the costs of the
Costs Applicant in relation to the UFD Application.
The costs application
[2] The Costs Applicant applies for a costs order on the following bases. First it is said
that the UFD Application for a remedy under s.394 of the Act had no reasonable prospects of
success at the outset and should not have been filed. The UFD Application had no reasonable
prospects of success because the Costs Respondent had made a number of misrepresentations
to the Costs Applicant about matters central to the reason for dismissal of the Costs
Respondent and there was extensive evidence against the Cost Respondent’s version of
events.
[3] Secondly, the Costs Applicant submits that the UFD Application was made
vexatiously as it was based on misrepresentations made to the Costs Applicant about whether
any telephone conversation took place between the Costs Applicant and Mr Kelly on
21 December 2012. Thirdly, the Costs Applicant argues that the Costs Respondent acted
unreasonably in failing to discontinue or to withdraw the UFD Application at each or one of
the stages of the proceeding. Finally it is submitted that as the Costs Respondent was aware
that she had a telephone conversation with Mr Kelly on 21 December 2012, would have been
well aware of the substance of that conversation, and knew that she had misrepresented the
fact of the telephone conversation in her file note given to Mr Tant, the UFD Application was
made without reasonable cause. This is because upon the facts apparent to the Costs
Respondent, the UFD Application had no substantial prospect of success and would, on her
own version of the facts, fail.
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DECISION
AUSTR FairWork Commission
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Costs orders under section 611
[4] Section 611 of the Act sets out some of the circumstances in which an order for costs
might be made in relation to a matter before the Fair Work Commission (Commission)1. The
primary position in relation to costs of a matter before the Commission is that each person
involved in a matter must bear their own costs2. The policy which underpins this provision
seems clear. It is designed to enable a person to make or defend an application without being
burdened with the risk that an order for costs might be made against the person. However, the
legislature has recognised that there will be circumstances in which an order for costs directed
to a person might be appropriate. Therefore, the Commission may exercise discretion to make
an order that a person bears some or all of the costs of another person in relation to an
application to the Commission if the Commission is satisfied that:
(a) a person made an application, or responded to an application, vexatiously or
without reasonable cause; or
(b) it should have been reasonably apparent to a person that that person’s
application or response to an application had no reasonable prospect of success3.
[5] Before the Commission begins to consider whether to exercise its discretion to make
an order for costs it must first be satisfied that one of the circumstances set out in the
preceding subparagraphs are engaged in relation to an application or a response.
Subparagraph (a) above is directed to an examination made of the circumstance at the time the
application or response is made, while the existence of a circumstance in subparagraph (b)
above may be discerned at various points in time during the conduct of a matter before the
Commission and is not confined to the time at which a person makes, or responds to an
application.
Vexatiously
[6] A person will make or respond to an application vexatiously if the person’s
predominant purpose or motive is to harass or embarrass another person, or to gain a
collateral advantage4. The issue which must be examined in determining whether a person
acted vexatiously in making, or responding to, an application, is the person’s purpose or
motive. In my view, it is not sufficient to point to a weakness in a person’s application or
response and to conclude from this weakness that the application or response was made
vexatiously. Evidence must be led or elicited which is directed to the person’s purpose and
from which it can be concluded that a person was motivated to make, or respond to, an
application by an intention or desire to harass or embarrass another person, or to gain some
collateral advantage.
1 The Commission may also make an order for costs under sections 376, 400A, 401 and 780
2 Section 611(1)
3 Section 611(2)(a) and (b)
4 See Qantas Airways Limited v Carter [2013] FWCFB 1811; Nilson v Loyal Orange Trust (1997) 76 IR 180 at 181
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Without reasonable cause
[7] An application or response will not have been made without reasonable cause simply
because it fails or is not accepted5. Considering whether an application or response was made
without reasonable cause requires an examination of the nature and strength of the application
or response. In Hatchett v Bowater Tutt Industries Pty Ltd (No 2)6 von Doussa J described the
test that is imposed by the expression “without reasonable cause” as similar to that applied by
a court on an application for the exercise of summary power to stay or to strike out a
proceeding. His Honour said that to illustrate the test in that context, expressions such as
“frivolous”, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless”
and “bad beyond argument” had been used7. In my opinion these expressions are also apt to
describe the test to determine whether an application or response has been made “without
reasonable cause” within the meaning of s.611(2)(a) of the Act, but the test is by no means
limited to these expressions.
[8] The phrase “without reasonable cause” has been engaged to support costs orders
against an applicant whose application was “misconceived”8, although an application or
response need not be properly described as “misconceived” for it to have been made without
reasonable cause9. In Kanan v Australian Postal and Telecommunications Union10, Wilcox J
considered that one way of testing whether a proceeding is instituted without reasonable cause
is to ask:
“whether, upon the facts apparent to the applicant at the time of instituting the
preceding, there was no substantial prospect of success. If success depends upon the
resolution in the applicant’s favour one or more arguable points of law, it is
inappropriate stigmatise the preceding as being “without reasonable cause”. But where,
on the applicant’s own version of the facts, it is clear that the proceeding must fail, it
may properly be said that the preceding lacks a reasonable cause”.11
[9] I respectfully adopt His Honour’s formulation as an appropriate means by which to
determine whether an application or response has been made “without reasonable cause” for
the purposes of s.611(2)(a) of the Act. Fundamentally the decisions, to which I have referred,
show that careful scrutiny is required by the Commission of an application or response in
order to ascertain whether that application or response was made without reasonable cause.
Ultimately “it is a matter of judgment, sometime of fine judgment, in all the circumstances of
a particular case whether a proceeding is brought without reasonable cause”12.
5 See R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473
6 (1991) 28 FCR 324
7 (1991) 28 FCR 324 at 327
8 See Standish v University of Tasmania (1989) 28 IR 129
9 See Thompson and Ors v Hodder and Ors (1989) 31 IR 300
10 (1992) 43 IR 257
11 (1992) 43 IR 257 at 264 – 265
12 See Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations
Commission and Anor (2006) 156 FCR 275 at 290.
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It should have been reasonably apparent to a person
[10] An assessment of whether the circumstance described in s.611(2)(b) existed is not
limited to the time at which a person makes an application or response, although it may arise
at that time. Knowledge gained by a person during the course of a proceeding and after
making an application or response might lead to a conclusion that it should have been
reasonably apparent to a person that the person’s application or response had no reasonable
prospect of success. This knowledge could be gained, for example at a time after the person
has received an opposing party’s evidentiary material, or during the course of the hearing.
[11] Section 611(2)(b) directs attention to that which should have been “reasonably
apparent to a person”. In this context whether something should have been “reasonably
apparent to a person” is not to be determined by reference to the subjective views of the
person. Rather, the question must be objectively determined13.
No reasonable prospects of success
[12] Section 611(2)(b) also directs attention to the substance of an application or response.
A conclusion that a particular application or response “had no reasonable prospect of success”
is one that should only be reached with extreme caution in circumstances where the
application or response is manifestly untenable or groundless or so lacking in merit or
substance so as to be not reasonably arguable14.
Consideration
Did the Costs Respondent make the UFD Application vexatiously?
[13] As I have indicated earlier, the question whether the Costs Respondent made the UFD
Application vexatiously requires an examination of the Costs Respondent’s purpose or motive
in making the application. The Cost Applicant argues that as the Costs Respondent knew:
that she had made a telephone call to Mr Kelly on 21 December 2012;
the substance of the telephone discussion with Mr Kelly; and
she had misrepresented the fact of the telephone call to the Costs Applicant,
the UFD Application “can now only be viewed … as having been a vexatious application
based on the continued misrepresentation by the Costs Respondent”15.
[14] The matters relied upon by the Costs Applicant are not matters which evidence
purpose or motive in making the UFD Application. Consequently the Costs Applicant’s
submission requires purpose or motive to be entirely inferred. The Costs Applicant did not
seek to lead any evidence about the Costs Respondent’s purpose or motive, nor did it cross-
examine the Costs Respondent about her purpose or motive in making the UFD Application
during the substantive hearing. There is no evidence that the Costs Respondent was anything
other than genuinely aggrieved by the manner of her dismissal. Specifically there is no
13 See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Wodonga Rural City Council v Lewis (2005) 142 IR 188
14 See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Smith v Barwon Region Water Authority (2009) 187 IR 276 at
[48]
15 Cost Applicant’s submissions [9]
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evidence of an intention to harass or embarrass the Costs Applicant by making the UFD
Application, nor is there any evidence of the Costs Respondent having some other collateral
purpose or was seeking some collateral advantage. I do not suggest that, in an appropriate
case, purpose or motive may not be inferred from the substantive factual matrix of a matter,
but this is not such a case.
[15] Even accepting the state of the Costs Respondent’s knowledge about the telephone
conversation with Mr Kelly and the contradictory file note provided to Mr Tant, it does not
follow that one should readily infer an improper motive or purpose on the part of the Costs
Respondent. It must be remembered that the Costs Respondent did not only complain about
the absence of a valid reason. Much of her case, as outlined in the UFD Application, relied
upon alleged procedural deficiencies on the part of the Costs Applicant in investigating the
allegations and in effecting the dismissal. Consequently, the matters to which the Costs
Applicant points to support its submission do not provide a proper basis from which to infer
the Costs Respondent’s purpose or motive in making the UFD Application extended beyond
seeking a remedy in relation to a dismissal about which she was aggrieved.
[16] The Costs Applicant also submitted that once the Costs Respondent had reviewed the
witness statements filed by the Costs Applicant, it should have been apparent to the Costs
Respondent that she could not continue to maintain the fact that the telephone call to Mr Kelly
on 21 December 2012 did not occur. It follows, in the Costs Applicant’s submission, that
from this point the Costs Respondent “proceeded to the hearing in hopes that her version of
the substance of the telephone call would be believed over that of the other witnesses”16, and
consequently the UFD Application was vexatious. For similar reasons to those given above, I
do not accept this submission. Again this submission requires inferences to be drawn about
purpose or motive which are not supported by cogent evidence and which ignores other
aspects of the UFD Application. Furthermore, as set out above, whether an application is
made vexatiously is to be judged by reference to the purpose or motive at the time an
application is made. This aspect of the Costs Applicant’s submission focusses on the Cost
Respondent’s purpose or motive at some later point and not at the time the UFD Application
was made.
[17] Consequently, for the reasons given above I am not satisfied that the Costs Respondent
made the UFD Application vexatiously.
Did the Costs Respondent make the application without reasonable cause?
[18] The Costs Applicant submits that based on the facts known to the Costs Respondent at
the time that she made the UFD Application, it was made without reasonable cause. As
discussed above, a consideration of whether the Costs Respondent made the UFD Application
without reasonable cause requires me to consider whether, on the Costs Respondent’s own
version of the facts, it was clear that the UFD Application would fail. It seems to me the Costs
Applicant’s submission might be correct if the only consideration in determining whether the
Costs Respondent’s dismissal was harsh, unjust or unreasonable was whether the Costs
Applicant had a valid reason for the dismissal. But even this proposition must be cautiously
approached as one of the reasons relied upon by the Costs Applicant, namely the
misrepresentation about the telephone call to Mr Kelly, was not a reason given to the Costs
16 Cost Applicant’s submissions [40]
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Respondent by the Costs Applicant as founding a ground for dismissal at the time it was
effected.
[19] However, consideration of whether a dismissal was harsh, unjust or unreasonable is
not confined to whether there was a valid reason for the dismissal. So much is clear from the
enumeration of factors that must be considered by the Commission in determining whether or
not a dismissal was harsh, unjust or unreasonable17. The Costs Respondent’s UFD
Application not only alleges the absence of a valid reason, but also alleges a failure to accord
procedural fairness. This aspect of the Cost Respondent’s application was not without merit.
Indeed I determined as much, at least insofar as the Costs Applicant relied upon the
‘misrepresentation’ ground as a valid reason for dismissal18. It is not infrequently the case,
that a dismissal will be found to have been harsh, unjust or unreasonable on the basis that
there was some procedural irregularity even though there was a valid reason. Indeed as the
High Court observed in Byrne v Australian Airlines Ltd19, a dismissal:
“. . . may be unjust because the employee was not guilty of the misconduct on which the
employer acted, may be unreasonable because it was decided upon inferences which
could not reasonably have been drawn from material before the employer, and maybe
harsh in its consequences for the personal and economic situation of the employee or
because it is disproportionate to the gravity of the misconduct . . .”20
[20] The substance of the Costs Applicant’s submission is that because the Costs
Respondent knew at the time that she had made the UFD Application that the Costs Applicant
had a valid reason for her dismissal, the UFD Application was made without reasonable
cause. This is an overly simplistic analysis. True it is that the Costs Respondent was well
aware of the fact and nature of her telephone discussion with Mr Kelly on 21 December 2011.
She was also well aware that this telephone discussion founded a reason for her dismissal. But
the Costs Respondent also complained about the lack of procedural fairness in conducting the
investigation and in effecting her dismissal. It is also clear, on the face of the UFD
Application, that the Costs Respondent was alleging that insufficient regard was paid to her
“impeccable employment record” and that those effecting the dismissal did not have authority
to do so. This latter point required the determination of the legal question which was disputed
by the Costs Applicant. In the circumstances I am not satisfied that the UFD Application was
bound to fail or was so obviously untenable that it could not proceed. It follows that I am not
satisfied that the Costs Respondent made the UFD Application without reasonable cause.
Should it have been reasonably apparent to the Costs Respondent that the UFD Application
had no reasonable prospect of success?
[21] Inasmuch as the Costs Applicant says that it should have been reasonably apparent to
the Costs Respondent at the time that she made the UFD Application that it had no reasonable
prospect of success, I reject that submission for substantially the same reasons given above. It
cannot be said that at the time the Costs Respondent made the UFD Application it was
manifestly untenable or groundless or so lacking in merit or substance so as to be not
reasonably arguable.
17 See section 387
18 [2013] FWC 3392 at [68]
19 (1995) 185 CLR 410
20 (1995) 185 CLR 410 at 465
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[22] In the alternative the Costs Applicant submits that after the Costs Respondent had
reviewed the Costs Applicant’s witness statements, it should then have been reasonably
apparent to the Costs Respondent that the UFD Application had no reasonable prospect of
success. At this point, so the Costs Applicant submits, it should have been reasonably
apparent to the Costs Respondent that the Costs Applicant was aware that she had
misrepresented the fact of making a telephone call to Mr Kelly. Further the Costs Respondent
should also have been aware of the “extensive evidence” that the Costs Applicant intended to
lead which contradicted the Costs Respondent’s version of events. Consequently it should
reasonably have been apparent to the Costs Respondent that the UFD Application had no
reasonable prospect of success.
[23] The Costs Applicant also relies on a letter sent to the Costs Respondent on 22 April
2013 by the Costs Applicant’s solicitors, in which the Costs Respondent is put on notice that
having regard to the evidence in the Costs Applicant’s witness statements it was unlikely that
the UFD Application had any reasonable prospect of success. The letter invited the Costs
Respondent to withdraw the UFD Application and notified the Costs Respondent in the event
that the UFD Application was unsuccessful, an application for costs would be made. In that
correspondence and in proceedings before me the Costs Applicant relied upon the decision of
Commissioner Deegan in Achieng v Commonwealth of Australia21.
[24] I am not pursuaded by these submissions. Each of the “Costs Respondent’s knowledge
of the true facts”, the “misrepresentation” and the “extensive evidence” points raised by the
Costs Applicant’s submission only advance its argument so far. Even if I accepted that once
the Costs Applicant had provided it’s witness material to the Costs Respondent, combined
with the Costs Respondent’s knowledge and earlier misrepresentation, it would have been
objectively clear that the Costs Applicant had a valid reason for the dismissal, that remains
my view, an insufficient basis to conclude that it should have been reasonably apparent to the
Costs Respondent that the UFD Application had no reasonable prospect of success. As I have
indicated earlier, the consideration of whether a dismissal is harsh, unjust or unreasonable is
multifactorial. The presence of a valid reason is but one factor and by itself is not conclusive.
[25] The evidentiary materials provided by the Costs Applicant to the Costs Respondent,
did not on their face “knockout” the Costs Respondent’s allegation that she was denied
procedural fairness. The materials did not overcome the Cost Respondent’s allegation that the
Costs Applicant’s lacked authority to terminate her employment, nor did they not “knockout”
the Cost Respondent’s allegation that the dismissal was harsh taking into account the Cost
Respondent’s unblemished employment record. Although the Cost Applicant raised issues in
the materials about the Costs Respondent’s conduct and performance, knowledge of which
was said to have been acquired after the Costs Respondent’s dismissal, the truth of these
allegations remained in dispute. The determination of each of these matters required an
assessment and resolution of both legal and factual disputes and a consideration of the weight
that should be given to the Costs Respondent’s employment record. The resolution of these
matters turns on matters of impression or interpretation. The fact that the Costs Applicant
wrote to the Cost Respondent and asserted that based on its evidentiary material the UFD
Application had no reasonable prospect of success, adds little to an assessment that needs to
be objectively made about that which ought reasonably have been apparent to the Costs
Respondent.
21 [2011] FWA 2111
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[26] The Costs Applicant devoted a considerable part of its submissions to the decision in
Achieng. In particular the Costs Applicant submitted that there were a number of similarities
between Achieng and the circumstances in this case. Whilst I note that there are similarities I
am not persuaded that the decision in Achieng is of any assistance in resolving this costs
application. It is apparent on the face of the decision that the Commissioner did not give
consideration to the impact that the totality of the matters that must be taken into account in
determining whether a dismissal was harsh, unjust or unreasonable, would have on an
assessment whether it should have been reasonably apparent to a person that their application
had no reasonable prospects of success. In the present circumstances and for the reasons given
above I am not persuaded that once the Costs Applicant’s evidentiary material had been
provided, it should have been reasonably apparent to the Costs Respondent that the UFD
Application had no reasonable prospect success.
Letter from Costs Applicant’s solicitors to Cost Respondent dated 22 April 2013
[27] As I indicated above the Costs Applicant placed some reliance on its solicitor’s letter
to the Costs Respondent dated 22 April 2013. The Costs Applicant suggests that at this point a
reasonable person in the Costs Respondent’s position would have taken the opportunity to
seek legal advice as to the consequences of the letter. I do not accept this submission and
agree with the Costs Respondent submission that to do so would undermine the object of
Part 3–2 of the Act. Indeed it is expected that parties appearing before the Commission will
generally represent themselves and permission to be represented by a legal practitioner would
only be given in limited circumstances22.
[28] The Costs Respondent also submits that the Act does not contain a provision similar to
s.170CJ of the Workplace Relations Act 1996. It is correct that the Act does not contain in
express terms a costs provision which allows the Commission to award costs if a party has
acted unreasonably in failing to discontinue proceedings or agree to terms of settlement.
However s.400A of the Act permits the Commission to order costs against a party to a matter
arising under Part 3–2 of the Act if it is satisfied that the party caused costs to be incurred by
the other party to a matter because of an unreasonable act or omission in connection with the
conduct or continuation of the matter23. It seems to me that this provision is broad enough to
allow an order for costs in circumstances of an unreasonable refusal or failure to discontinue
an unfair dismissal proceeding. The Costs Applicant’s submission concerning the solicitor’s
letter and the failure of the Costs Respondent to discontinue the UFD Application seem to be
directed to the matters which might support an order for costs under s.400A.
[29] An order under s.400A of the Act may only be made if a party has applied for such an
order in accordance with s.402 of the Act. The Costs Applicant has not made an application
costs under s.400A as required by s.402. This was accepted by the Costs Applicant24.
Consequently no order under that section may be made.
22 See section 596
23 See section 400A
24 Transcript PN 1651 - 1656.
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Conclusion
[30] For the reasons given above the application for costs made under s.611 is dismissed.
DEPUTY PRESIDENT
Appearances:
E. Saw for R. Jones.
N. Dastan for Brite Services.
Hearing details:
2013.
Melbourne:
June 27.
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