1
Fair Work Act 2009
s.604—Appeal of decision
Roy Morgan Research Ltd
v
K Baker
(C2013/6194)
SENIOR DEPUTY PRESIDENT WATSON,
DEPUTY PRESIDENT HAMILTON
COMMISSIONER LEE MELBOURNE, 14 MARCH 2014
Appeal against decision [[2013] FWC 6694] of Deputy President Gooley at Melbourne on
6 September 2013 in matter number U2013/539 - application for costs - costs ordered.
[1] On 6 September 2013 Deputy President Gooley handed down a decision1 and order2
dismissing jurisdictional objections made by Roy Morgan Research Ltd (Roy Morgan), and
granting an application for an unfair dismissal remedy made by Ms K Baker under s.394 of
the Fair Work Act 2009 (the Act). The Deputy President ordered Roy Morgan to pay
Ms Baker the amount of $37,000 in compensation.
[2] On 30 September 2013 Roy Morgan lodged an appeal against the decision and order,
and applied for a stay of the decision.
[3] On 2 October 2013 Senior Deputy President Watson handed down a decision3 and
order4 staying the decision under appeal.
[4] On 20 November 2013 this Full Bench refused permission to appeal and dismissed the
appeal.5
[5] On 4 December 2013 Ms Baker made an application for costs she incurred in the Full
Bench hearing of the appeal, and for the costs of the costs application under both s.611 and
s.400A of the Act.
[6] This is a decision in relation to this application. It should be noted that the time limits
for a costs application are met.
1 [2013] FWC 6694.
2 PR541442.
3 [2013] FWC 7706.
4 PR542815.
5 [2013] FWCFB 8936.
[2014] FWCFB 1175
DECISION
[2014] FWCFB 1175
2
Section 400A
[7] Section 400A of the Act provides:
“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.”
[8] The Explanatory Memorandum refers to this section and to s.401 in the following
terms:
“Parts 3 and 4 of Schedule 6 to the Bill enhance the FWC’s ability to order costs against
a party and/or their representative in unfair dismissal matters. The new ‘party costs’
provision applies where a party to an unfair dismissal matter (either an employee or
employer) has caused the other party to incur costs by an unreasonable act or omission.
Under section 401 of the FW Act, lawyers and paid agents may currently be exposed
to costs orders if FWA has granted permission for a person to be represented in an
unfair dismissal matter. The Bill will provide for the FWC to order costs against a
lawyer or paid agent whether or not the FWC has given permission for a person to be
represented.
The amendments strike a balance between the need to protect workers from unfair
dismissal, and to provide a deterrent against unreasonable conduct during proceedings.
The amendments will enable costs orders to be more easily made in the case of
unreasonable conduct but will not prevent genuine claims from being pursued. They
will discourage frivolous and speculative claims and assist in the efficient resolution of
claims by encouraging all parties to approach proceedings in a reasonable manner.
These measures are reasonable and proportionate to address the time and expense that
an unreasonable conduct by a participant and/or their representative may cause another
party to incur.”6
[9] The phrase “unreasonable act or omission” was used in s.170CJ(3) of the Workplace
Relations Act 1996 (the WR Act). Sections 170CJ(1), (2) and (3) as they applied in March
2006 provided:
“170CJ Commission may order payment of costs
(1) If the Commission is satisfied:
6 Fair Work Amendment Bill 2012 - Explanatory Memorandum at p. 7.
[2014] FWCFB 1175
3
(a) that a person (first party):
(i) made an application under section 170CE; or
(ii) began proceedings relating to an application; and
(b) the first party did so in circumstances where it should have been
reasonably apparent to the first party that he or she had no reasonable
prospect of success in relation to the application or proceeding;
the Commission may, on application under this section by the other party to
the application or proceeding, make an order for costs against the first party.
(2) If the Commission is satisfied that a party (first party) to a proceeding relating
to an application under section 170CE has acted unreasonably in failing:
(a) to discontinue the proceeding; or
(b) to agree to terms of settlement that could lead to the discontinuance of
the application;
the Commission may, on an application under this section by the other party to
the proceeding, make an order for costs against the first party.
(3) If the Commission is satisfied:
(a) that a party (first party) to a proceeding relating to an application made
under section 170CE caused costs to be incurred by the other party to
the proceeding; and
(b) that the first party caused the costs to be incurred because of the first
party’s unreasonable act or omission in connection with the conduct of
the proceeding;
the Commission may, on an application by the other party under this section,
make an order for costs against the first party.”
[10] The unreasonable act or omission phrase in s.170CJ(3) of the WR Act was considered
in Goffet v Recruitment National Pty Ltd,7 which concerned a failure to attend conciliation
proceedings. In that matter the Full Bench stated:
“[35] In the absence of medical evidence of Ms Goncalves and an opportunity for the
Appellant to be heard on the point no weight should attach to the affidavit of
Ms Goncalves claim that she was ill on the day of the conciliation on 5 November
2008. The notice of listing for the 5 November 2008 conciliation was sent to the
Respondent by fax on 20 October 2008. The matter was listed for 11.30am. The
Respondent only notified the Commission that it would not be attending the
conciliation when the Commissioner’s associate telephoned the Respondent to inquire
7 [2009] AIRCFB 626.
[2014] FWCFB 1175
4
of its whereabouts at the time of the conciliation. Assuming Ms Goncalves was ill, as it
is submitted that she was, no explanation appears to be given for the failure of the
Respondent to inform the Appellant or the Commission of the fact prior to the
scheduled commencement time of the conciliation or at all at the initiative of the
Respondent. That represents conduct in our view, which caused the Appellant and her
representative an unnecessary attendance at the Commission for which we think she
should have her costs. The failure to initiate contact with the Commission and/or the
Appellant prior to the scheduled start time for the conciliation to inform it or them of
the non-attendance of the Respondent was unreasonable. If the act was intentional it
would be an unreasonable act. If unintentional it would be an unreasonable omission.
There is no evidence that the Respondent’s conduct in this regard was an intentional
act. We are satisfied that the Respondent’s conduct in respect of the conciliation on
5 November 2009 was an unreasonable omission which caused the Appellant to incur
costs.”
[11] The Full Bench continued:
“[47] The Respondent’s failure to take steps to inform the Appellant of its intentions
immediately after the issue of the notice of listing was either a deliberate or reckless
act that could not be regarded as anything other than unreasonable. Alternatively, to
the extent that the failure might be regarded as an omission, it was equally
unreasonable. That those unreasonable acts or omissions caused the Appellant to incur
the costs in connection with the conduct of the proceeding is unquestionable. We are
satisfied that the Respondent must be ordered to pay the Appellant’s costs of and
incidental to the submissions and preparation for arbitration. We allow also the costs
on an indemnity basis in respect of the costs application.”
[12] A Full Bench considered the former ss.170CJ(2) and (3) of the WR Act in Brazilian
Butterfly Pty Ltd and Charalambous.8 The Full Bench discussed authorities and said:
“[39] Very strong prospects of success will not always justify a failure to participate
in settlement negotiations initiated by a serious settlement offer from the other party.
For example, where reinstatement is not sought and the amount offered by a
respondent is equivalent to the statutory cap on compensation that can be ordered
pursuant to s.170CH, it will likely be unreasonable for an applicant to fail to agree to a
settlement on those terms, irrespective of how strong the applicant’s case is. Of course,
even then, it is possible to conceive of circumstances where a failure to agree terms of
settlement on the basis of such an offer would not be unreasonable. For example,
depending upon the circumstances, it may be entirely reasonable for an applicant to
insist upon a withdrawal of the dismissal and acceptance of a resignation in its stead if
this were necessary to repair substantial damage done to an applicant’s professional
reputation and future professional job prospects as a result of the dismissal.
[40] On the other hand, modest or even poor prospects of success on liability or
remedy will not necessarily always make it unreasonable for a party to fail to agree
terms of settlement that may lead to the discontinuance of the application. For
example, an applicant who was a long term employee close to retirement may have
very substantial contingent superannuation entitlements that will be lost unless he or
8 PR968915 on 25 August 2006.
[2014] FWCFB 1175
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she obtains reinstatement. The difference between the value of those contingent
entitlements and the amount offered by the respondent as a monetary settlement may
be so great as to make it reasonable for the applicant to refuse the respondent’s offer,
notwithstanding that the applicants’ prospects of success are only modest or even
poor. Again, each case will turn on its own facts.” [references omitted]
[13] The Full Bench continued:
“[43] A reasonable person, who is a party to proceedings pursuant to s.170CE, when
confronted with an offer of settlement from the other party, will determine whether,
and if so, how to respond to such an offer after considering all the circumstances of the
case, including:
the terms of the settlement offered in relation to the relief sought;
the relative strengths of the parties’ cases (and thus their relative prospects of
success) in relation to both ‘liability’ and the relief sought;
any assessment of the merits in the certificate issued by the Commission pursuant
to s.170CF(2);
the likely length and cost of proceeding to a hearing if the matter does not settle;
and
any adverse consequences that will accrue to a party if they accept a settlement on
particular terms rather than successfully prosecute or defend the primary
application, as the case may be.
[44] This list is not intended to be exhaustive. All of the circumstances are relevant
and, as is made clear in the joint judgment in Blagojevch, there is no basis in the Act
for giving primacy to any particular factor in every case.
[45] In many, if not most, cases there will be contested facts or contested
interpretations of particular facts. What knowledge in this regard is to be attributed to
the reasonable person considering whether, and if so, how to respond to an offer of
settlement? The passage in Abbey, upon which the Commissioner relied was, clearly
enough, an attempt to grapple with that problem. However, there is a tension between
the way in which that passage is expressed and the apparent acceptance by the
majority in Blagojevch that a party can act reasonably in responding to an offer of
settlement by reference to that party’s “genuine perception or recollection of events”.
The Full Court’s formulation is to be preferred although, even then, it is not to be seen
as a substitute for the words of the Act. Of course, there is an issue as to what
constitutes a “genuine” perception. The Full Bench in Kangan Batman TAFE
observed, we think correctly, that:
‘A party cannot simply disregard matters that should have been reasonably
apparent and then claim that such matters were not apparent to them.’”
[references omitted]
[2014] FWCFB 1175
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[14] A Full Bench in Stagno v Frews Wholesale Meats said:9
“This last extract introduces a point of distinction between s.170CJ(1) and s.170CJ(2).
The former refers to ‘without reasonable cause’, the latter to ‘acted unreasonably’.
This anomaly, as it was described, is noted by a full bench in K.M. Lloyd v.
International Health and Beauty Aids Pty Ltd t/as Elly Lukas Beauty College [Print
Q5446] and, by inference, the bench is of the view that the tests are different in
s.170CJ(1) and (2). That there is a different formula is clear but we are of the view that
the formulations are based on the stage of proceedings at which they occur. Section
170CJ(1) relates to the initiation of proceedings. Section 170CJ(2) relates to the failure
to discontinue or the discontinuance of the matter. In each case what attracts the
discretion to award costs is unreasonable action or the absence of sufficient reason for
the action taken. What is considered to be without reason is determined by reference to
the stage that the proceeding has reached. We note that this leaves open the possibility
that proceedings may commence which are with reasonable cause but may, in
particular circumstances at a later stage, be further prosecuted unreasonably.
‘We are of the view that a party to a proceeding commenced under s.170CE of
the Act in which the Commission has begun arbitrating has acted unreasonably
in failing to discontinue the matter if when, at the relevant time, upon the facts
apparent to the applicant there was not substantial prospect of success.’”
Attempts by Ms Baker and Roy Morgan to Settle the Appeal and Appeal Costs Proceedings
[15] On 24 October 2013 Ms Baker made an offer10 to Roy Morgan to settle the appeal
proceedings on the basis that Roy Morgan pay an amount of $35,000 in compensation, the
appeal be withdrawn, and the parties bear their own costs. The letter of offer drew attention to
the statements in the stay decision already quoted which pointed to the weakness of the
appeal.
[16] The letter of offer stated that the offer was open until 25 October 2013, after which
time Ms Baker would incur further expense in preparation of the matter for hearing on
13 November 2013. A statement of costs of the appeal proceedings to date was attached to the
letter, which claimed that $11,541 in costs had been incurred to date, in addition to
disbursements to counsel of $990 and $3,920.11
[17] Roy Morgan responded with an offer that each side bear their own costs.12
[18] On 13 February 2014 Ms Baker made an offer to settle the appeal costs proceedings
by discounting her claim for professional costs including barrister’s fees by 25%. The offer
was open for acceptance until 14 February 2014.
[19] On 14 February 2014 Roy Morgan stated that it did not accept the offer, and that
“there are tenable grounds on which the applicant’s costs ought to be . . . reduced significantly
or refused altogether”.13
9 (1998) 84 IR 270.
10 Application for Costs at Attachment O.
11 Application for Costs at Attachments P, Q, R.
12 Application for Costs, at para 49 and Transcript of 17 February 2014 at para 758.
[2014] FWCFB 1175
7
Decision on s.400A Application
[20] We have not had regard to events which occurred before the appeal was instituted, as
there are proceedings underway with respect to those events before Deputy President Gooley.
[21] The first issue that arises is the significance of the warning or otherwise to Roy
Morgan contained in the stay decision. On 2 October 2013 Senior Deputy President Watson
handed down a decision14 and order15 staying the decision under appeal. In that decision Roy
Morgan was warned that its appeal was barely arguable and weak:
“[7] With considerable hesitation I am satisfied that the Appellant has advanced an
arguable case in the appeal in respect to the findings of Deputy President Gooley as to
both s.389(1)(a) and (b). In both instances, the appeal is brought on the basis that the
ultimate findings made by Deputy President Gooley were not available on the evidence
before her. The Appellant pointed to very limited evidence to support its position in
either case for the purposes of the stay. I am satisfied that its appeal is arguable, albeit,
on the submissions in the stay, barely so.
[8] I am also satisfied that the balance of convenience favours the making of an
order staying the order of Deputy President Gooley but in circumstances where the
arguable case as to the merits is weak, I will qualify the order to require payment of
the compensation ordered by Deputy President Gooley into Ms Baker’s solicitor’s
trust account. I have taken this course given the weakness of the arguable case
advanced in the stay and having regard to the failure of the Appellant to institute its
appeal within a time which permitted the hearing and determination of the stay order
application prior to the date upon which compliance with the order of Deputy
President Gooley was required.” [emphasis added]
[22] The subsequent appeal decision confirmed the appropriateness of those warnings. The
Full Bench said that Roy Morgan had put “no evidence” to substantiate its claim that
Ms Baker was terminated because of the changed operational requirements of the enterprise
within s.389(1)(a) of the Act:
“[26] It is sufficient, for the purposes of the current appeal, to draw from those
authorities, that s.389(1)(a) of the Act requires the Commission to consider the
evidence in relation to the changes in operational requirements relied on by the
employer and reach a conclusion as to whether the changes were such that it no longer
required the employee’s job to be performed by anyone. A positive finding in relation
to s.389(1)(a) would require satisfaction by the Commission on the evidence and
material presented to it by the parties, that the employer no longer required the
employee’s job to be performed by anyone because of changes in the operational
requirements of its enterprise.
[27] As was noted by Deputy President Gooley, the Appellant is entitled to
restructure its HR team. However, if it wishes to contest an application for relief in
13 Exhibit B1 and Transcript of 17 February 2014 at paras 732-735.
14 [2013] FWC 7706.
15 PR542815.
[2014] FWCFB 1175
8
respect of the termination of an employee made redundant as a consequence on the
basis that the redundancy was due to the changed operational requirements of its
enterprise (ss.385(d) and 389(1) of the Act), it must produce evidence to the
Commission to support such a proposition, including evidence of the changed
operational requirements.
[28] We have carefully considered the evidence brought by the Appellant before
Deputy President Gooley, including that of the decision maker, Mr Schwarz and
Ms Levine, who approved the restructure proposed by Mr Schwarz.
[29] Having regard to that evidence before Deputy President Gooley, we find that
the Appellant put no evidence about changes in the operational requirements of the
business which supported the creation of the Learning and Development Lead position
and the abolition of the job being performed by the Respondent (whether the
ASTEROID Trainer position or the position of a generalist trainer and/or supporting
the HR team in an administrative capacity). No evidence was given as to competency
gaps within the HR team which supported the creation of the Learning and
Development Lead position in order to meet operational requirements. No evidence
was brought as to the business’ training needs or the competencies of the existing HR
staff. No evidence was given as to the sustainability of the Respondent’s position at
the time of the restructure, in addition to the Learning and Development Lead position,
having regard to the operational requirements of the Appellant. As noted in Village
Cinemas, what evidence will suffice to support a finding will vary from case to case
depending on the circumstances. In the current case, we find that the evidence brought
by the Appellant in respect of its operational requirements and the restructure was
extraordinarily limited and barely addressed the proposition that the Appellant no
longer required the Respondent’s job to be performed by anyone because of changes
in the operational requirements of its enterprise. It did not provide an evidentiary basis
for a finding to that effect.
[30] We find that Deputy President Gooley applied the right approach to the
question arising under s.389(1)(a) of the Act and reached the right conclusion in
rejecting the proposition that the Appellant no longer required the Respondent’s job to
be performed by anyone because of changes in the operational requirements of its
enterprise. No error, significant or otherwise, is evident in the decision of Deputy
President Gooley in relation to s.389(1)(a). The matter was correctly decided. No basis
for permission to appeal has been made out.” [emphasis added, footnotes omitted]
[23] Further the Full Bench found that there was “no consultation at all” in relation to the
restructuring and redundancy as required by s.389(1)(b) of the Act:
“[36] The Respondent submitted that the appropriate time for consultation under
clause 33 in the Roy Morgan Agreement in the current case, was after the employer
had made a definite decision to undertake a restructure but before particular decisions
had been taken as to the new positions to be created and the employees or positions to
be made redundant. In this case the decision was made to restructure and at the same
time to make the position of the Respondent redundant. The Respondent was only
advised of the decisions after they had been made. The evidence shows that there was
no consultation at all in relation to the restructure and the redundancy of the
Respondent’s position and there is no evidence of the provision of the particular
[2014] FWCFB 1175
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information required to be provided, verbally or in writing, to the Respondent under
clause 33 of the Roy Morgan Agreement. Deputy President Gooley was right to find
that the Appellant had not complied with its obligation to consult with the Respondent
under the Agreement.” [emphasis added]
[24] The necessarily preliminary assessment made in the decision on the stay was that Roy
Morgan’s case on appeal was weak and barely arguable. On appeal, once the full material was
heard, the Full Bench found that Roy Morgan had put no evidence to support its claim that it
met the requirements of s.389(1)(a) of the Act, and that there had been no consultation at all
as required by s.389(1)(b). None of the appeal grounds were substantiated and there was no
basis on which permission to appeal could be granted.
[25] Roy Morgan is entitled to engage in hard bargaining. However, its conduct goes
beyond hard bargaining and into the realm of a refusal to reasonably assess and respond to a
clear statement from the Fair Work Commission (the Commission) in the stay order decision
that its prospects on appeal were weak and barely arguable. Further, Roy Morgan knew or
should have known that the prospects on appeal were not merely weak and barely arguable,
but that there was no evidence put during the proceedings to support its contention that the
requirements of ss.389(1)(a) and (b) of the Act were satisfied.
[26] Roy Morgan responded to the offer to settle made by Ms Baker on 24 October 2013
with an offer for each side to bear their own costs, despite being expressly warned by the
Commission about the strength and prospects of its case, and despite this knowledge. There is
no tenable relationship between the offer made by Roy Morgan and the strength, or lack
thereof, of its case.
[27] Roy Morgan submitted that it was “genuinely aggrieved” by the decision at first
instance, and that it “took comfort from the decision in the stay application”. It submits that
its argument was “worthy of consideration” in the circumstances.16 We accept that it may
have been genuinely aggrieved, but such a grievance must be based on some form of
reasonable argument to be put if it is to be persuasive in the context of these proceedings.
There was in our view little or no basis on which it could take comfort from the decision in
the stay, which was a clear warning that prospects on appeal were poor unless there was
something additional to be put. It became clear that there was nothing additional to be put,
and Roy Morgan knew or should have known this. Finally, there is no basis on which Roy
Morgan can submit that its arguments were “worthy of consideration” in the circumstances.
[28] Given the poor prospects of an appeal the course of conduct Roy Morgan engaged in
was unreasonable conduct which led Ms Baker to incur substantial costs. In the circumstances
we have decided that it is appropriate to order Roy Morgan to pay the costs incurred by
Ms Baker after the stay decision and order were issued, and the costs of the costs proceedings.
[29] The second issue for consideration is the decision of Roy Morgan to institute an appeal
knowing as it did the state of the evidence. It is now clear that Roy Morgan instituted and
continued an appeal without there being any evidence before the Commission to substantiate
its firm and continuing contention that s.389(1)(a) or (b) of the Act were satisfied. The appeal
was not one where there was a fine balance in the evidence, or discretionary decision, or an
issue of law as there was in for example New England and Western Tenants Advice and
16 Exhibit RMR1, at paras (a) and (b).
[2014] FWCFB 1175
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Advocacy Service Inc v Doherty.17 In this case the Full Bench found that there was no
evidentiary basis on which a decision could be made favourable to Roy Morgan in relation to
its contentions with respect to s.389 of the Act.
[30] The institution and continuation of an appeal were unreasonable acts in connection
with the conduct or continuation of the s.394 application made by Ms Baker, and caused
Ms Baker to incur costs. The requirements of s.400A of the Act are satisfied.
[31] In the circumstances we have decided that it is appropriate to order Roy Morgan to
pay the full costs of the appeal and the appeal costs proceedings.
The s.611 Application
[32] Given our decision in relation to the s.400A application it is unnecessary to consider
the s.611 application with respect to conduct after the stay proceedings. However, in the
alternative, we make the following findings.
[33] Section 611 of the Act provides as follows:
“611 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).”
[34] In Church v Eastern Health18 a Full Bench of the Commission reviewed the
authorities in the following terms:
“[27] In the context of s.570 and its legislative antecedents courts have observed that
an applicant who has the benefit of the protection of a provision such as s.570(1), (ie
17 [2014] FWCB 150 at para 8.
18 Ross J, President, Hatcher VP, Wilson C, [2014] FWCFB 810 on 4 February 2014 at paras 27-33.
[2014] FWCFB 1175
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the general rule that parties bear their own costs), will only rarely be ordered to pay
costs and that the power should be exercised with caution and only in a clear case. In
our view a similarly cautious approach is to be taken to the exercise of the
Commissions powers in s.611 of the FW Act.
. . .
[29] The question of whether an application was made ‘vexatiously’ looks to the
motive of the applicant in making the application. It is an alternative ground to the
ground that the application was made ‘without reasonable cause’ and may apply where
there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust
(Nilsen) North J observed that this context requires the concept of vexatiousness to be
narrowly construed. His Honour went on to state that an application will be made
vexatiously ‘where the predominant purpose ....is to harass or embarrass the other
party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar
observation in Hamilton v Oades in which they said:
‘The terms “oppressive” and “vexatious” are often used to signify those
considerations which justify the exercise of the power to control proceedings to
prevent injustice, those terms respectively conveying, in appropriate context,
the meaning that the proceedings are “seriously or unfairly burdensome,
prejudicial or damaging” and “productive of serious and unjustified trouble and
harassment.”’
[30] We now turn to the expression ‘without reasonable cause’. A party cannot be
said to have made an application ‘without reasonable cause’, within the meaning of
s.611(2)(a), simply because his or her argument proves unsuccessful. The test is not
whether the application might have been successful, but whether the application
should not have been made. In Kanan v Australian Postal and Telecommunications
Union., Wilcox J put it this way:
‘It seems to me 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 proceeding, there was no substantial
prospect of success. If success depends upon the resolution in the applicant’s
favour of one or more arguable points of law, it is inappropriate to stigmatise
the proceeding 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 proceeding lacks a reasonable cause.’
[31] In the context of an appeal the question becomes whether, having regard to the
arguments available to the appellant at the time of instituting the appeal, there was no
substantial prospect of success. As Wilcox CJ (with whom Madgwick J agreed)
observed in Imogen Pty Ltd v Sangwin:
‘The prospect must be evaluated in the light of the facts of the case, the
judgment appealed from and the points taken in the notice of appeal. If having
regard to those matters, there was not insubstantial prospect of the appeal
achieving some success, albeit not necessarily complete success, then it would
seem to me it cannot be fairly described as having been instituted “without
[2014] FWCFB 1175
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reasonable cause”. This is so even if, in the result, the appeal proved
unsuccessful.’
[32] In the same matter Ryan J said:
‘The existence of ‘‘reasonable cause’’ within the meaning of s 347 falls to be
determined at the time when the relevant proceedings were instituted. The fact
that the party instituting the proceedings later discontinues them is therefore
not a matter to be taken directly into account in the application of the section.
However, an appeal stands in somewhat different case from proceedings at first
instance in that discontinuance may bear indirectly on the discretion conferred
by s 347 by tending to confirm an impression derived from the grounds of
appeal and the reasons for judgment below that the prospects of success on the
appeal were slight.
Not without significance to an assessment of the reasonableness of the
institution of an appeal are the amount at issue and the nature of the points
raised by the notice of appeal. Where, as here, the appeal is essentially against
findings of fact made by the trial judge after a two day hearing resulting in a
judgment for $16,900 and raises no important or distinctive point of law or
principle, the Court may more readily conclude that it was not reasonable in the
circumstances to have instituted it. On a fairly fine balance of the relevant
considerations and not without hesitation, I have been led to reach that
conclusion in this case and agree with the Chief Justice and the orders which he
has proposed.’
[33] In construing s.570 and its legislative antecedents courts have observed that the
test imposed by the expression ‘without reasonable cause’ is similar to that adopted for
summary judgement, that is ‘so obviously untenable that it cannot possibly succeed’,
‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot
succeed.’” [Footnotes omitted]
Decision on s.611 Application
[35] We refer to our earlier observations with respect to this matter, which it is unnecessary
to repeat. In this case Roy Morgan instituted an appeal against a decision and order in
circumstances in which we have found that there was no evidentiary basis before the member
at first instance on which a decision could be made favourable to Roy Morgan in relation to
its contentions with respect to s.389 of the Act. There cannot be reasonable prospects of
success in such circumstances, or in fact any prospects of success in the absence of error. In
our view the appeal was made without there being any reasonable prospects of success. The
requirements of s.611 of the Act are satisfied. In the circumstances we consider that an order
of costs against Roy Morgan for the costs of the appeal, and the appeal costs proceedings is
warranted.
Conclusion
[36] We will make an order requiring Roy Morgan to pay costs incurred by Ms Baker in
respect of both the appeal instituted by Roy Morgan and the costs application instituted by
Ms Baker. We direct the parties to:
[2014] FWCFB 1175
13
1. confer as to the quantum of costs to be included in the order; and
2. if the quantum of costs is agreed, to advise Deputy President Hamilton, who
will issue an order on behalf of the Full Bench;
3. if the quantum of costs is not agreed, to advise Deputy President Hamilton,
who will settle the order.
SENIOR DEPUTY PRESIDENT
Appearances:
J Yeatman for the Appellant.
N Campbell of Counsel for the Respondent.
Hearing details:
2014.
Melbourne:
February 17.
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