[2014] FWC 3946
The attached document replaces the document previously issued with the above code on 18
June 2014.
The document is amended to correct a typographical error in footnote 4 of the decision.
Naomi Snyder
Associate to COMMISSIONER WILSON
Dated 18 June 2014
1
Fair Work Act 2009
s.402 - Application for costs orders against lawyers and paid agents under s.401
Rainshield Roofing Pty Ltd T/A Rainshield Roofing
v
Peter Paerau
and
Garry Dircks T/A Just Relations - Consultants
(U2014/5903)
COMMISSIONER WILSON MELBOURNE, 18 JUNE 2014
Decision varied pursuant to s.603 of the Fair Work Act 2009.
[1] This decision varies the decision issued by the Commission on 6 June 2014 in [2014]
FWC 3777 (the Costs Decision). That decision awarded costs against the Applicant, Mr Peter
Paerau, and his representative, Just Relations, following an earlier decision about the merits of
Mr Paerau’s application for an unfair dismissal remedy against his former employer,
Rainshield Roofing Pty Ltd1.
[2] After the Costs Decision was issued on 6 June 2014, Mr Paerau contacted the Fair
Work Commission claiming that my decision did not take into account submissions he had
made.2 The circumstances of my Chambers’ contact with Mr Paerau in the preparation of the
Costs Decision and on 6 June 2014 are set out below;
1. On 28 April 2014, my Associate contacted Mr Paerau by telephone to confirm the
accuracy of the email and postal address on record. Mr Paerau confirmed the details
recorded were correct. My Associate then asked Mr Paerau why he had not complied
with the Directions issued on 31 March 2014. Mr Paerau initially claimed that he had
not received the Directions. My Associate advised Mr Paerau that the Directions had
been sent by email and by express post, with a hard copy recorded as being delivered
on 3 April 2014. Mr Paerau subsequently said that he may have seen the Directions,
but that he was currently looking for a lawyer. My Associate told Mr Paerau that he
needed to respond to the Directions, even if the response was a request for an
extension to the filing date. Mr Paerau committed to sending a response within 24
hours.
1 [2014] FWC 1524
2 Ibid, see [10]
[2014] FWC 3946
DECISION
E AUSTRALIA FairWork Commission
[2014] FWC 3946
2
2. On 29 April 2014, my Associate emailed all parties (including Mr Paerau)
summarising the content of her conversations with Mr Paerau on 28 April 2014. My
Associate advised that no response had yet been received from Mr Paerau, and wrote
the following:
“Mr Paerau – you are again reminded of the requirement to file submissions in
accordance with the Directions dated 31 March 2014. Failure to do so may
result in a costs decision being issued by the Commissioner without
consideration of your views. The Directions are attached to this email for your
reference.”
3. On the same day, Mr Dircks wrote to Chambers to disclose that Mr Paerau rang him
on the evening of 28 April 2014 to provide advice on what he should do. Mr Dircks
said he provided Mr Paerau with some ‘very basic advice’.
4. My decision was issued on 6 June 2014. That afternoon, my Associate received a call
from Mr Paerau who claimed the decision did not refer to the submissions he provided
on 28 April 2014. My Associate explained that we had not received any further
material from Mr Paerau, and that he should email my Chambers urgently to provide
evidence of when he submitted the material, and a copy of the material submitted. At
3:03 pm on 6 June 2014, Mr Paerau emailed what appears to be a screen shot of his
phone. The screen shot shows an email dated 28 April 2014, sent at 8:56 pm, to
‘UDTRRoster...wc.gov.au’. The full email address of the recipient is not provided,
however I note that the correct address for the unfair dismissal team at the Fair Work
Commission is ‘UDTRosters@fwc.gov.au’. The email states the following:
“To Commissioner Wilson
These are my Submissions.
I rely on my statements and materials in my case i put forward to the
commissioner.
I truly believe i was unfairly dismissed and had a legitimate reason for a case
and did not take the matter lightly.
I Strongly believe i was unfairly dismissed for bringing up my concerns for my
safety and others around me.
Yours faithfully
Peter Paerau”
[3] Having received this communication from Mr Paerau, all parties, including Mr Paerau,
were given an opportunity to provide comments (if any) on the matter by the close of business
on Tuesday 10 June 2014. Following this invitation Just Relations requested additional time
in which to obtain advice and provide its views, and the submission date was moved for all
parties to 5pm on Friday 13 June.
[4] Each party provided submissions about this matter;
[2014] FWC 3946
3
Mr Paerau’s submissions, provided on 10 June, reinforced the views expressed
above, that he had acted reasonably in accordance with his beliefs and questioned the
advice he had received in the course of the merits hearing. The submissions did not
expressly address what should be done by the Commission as a result of it learning
he had endeavoured to make submissions in the course of making the Costs
Decision. While his submissions indicate disagreement with the decision, Mr Paerau
did not expressly advocate variation or revocation of the Costs Decision for the
reason that his earlier submissions had not been taken into account.
Just Relations’ submissions argue that by attempting to file submissions, which were
then not seen by the Commission because they had not been received, Mr Paerau’s
situation may amount to a jurisdictional error. The error may be remedied through
the consideration of the variation or revocation of the Costs Decision through s.603
of the Act. Since there is now a settlement on the costs dispute between Just
Relations and Rainshield Roofing, a varied or revoked decision should remove all
references to Just Relations. If there is to be a varied or revoked decision, the
Commission should be aware of various matters in the Costs Decision that Just
Relations considers to be wrong.
Rainshield Roofing argue that Mr Paerau’s submissions, both on 28 April and 10
Junem add no substance to the matters requiring determination and could not
possibly change the decision. As a consequence, the Costs Decision should not be
varied or revoked. While there has been an offer by Rainshield Roofing to Just
Relations for settlement of the costs dispute, that offer strictly related to quantum
and an agreement to forbear enforcement proceedings, and it is not true the costs
order is not being pursued because the parties reached an agreement, and that has no
bearing on whether the decision should be amended to remove any reference to Mr
Dircks.
[5] Having received the parties’ submissions, a hearing was convened on Monday 16 June
2014 in order to afford each party an opportunity to provide such further material as they
wished. Each party attended and was heard.
[6] Rainshield Roofing sought and was given permission by me to be represented by a
lawyer, Mr Vasilaras. I granted the application pursuant to s.596(2) being satisfied that
representation of the company by a lawyer would enable the matter to be dealt with more
efficiently, taking into account the complexity of the matter now being dealt with; that it
would be unfair to the company not to allow representation because it would be unable to
represent itself effectively; and taking into account the question of fairness between the
parties. In this latter regard, I note the second element in the note to s.596(2), and consider
the circumstances set out therein to be analogous to those here; namely that the company is a
small business with no specialist human resources staff while Just Relations is experienced in
workplace relations advocacy (and I take into account that the matter I am now dealing with is
in relations to a costs application against the advocate itself).
[7] The submissions and hearing identified that a course of action available to the
Commission might be to vary or revoke the Costs Decision, pursuant to s.603 of the Fair
Work Act 2009 (the Act), which can be on the Commission’s own initiative or on application
by a person of a class specified in the Act. While variation or revocation is not available for
[2014] FWC 3946
4
certain classes of decision referred to in s.603(3); the Costs Decision does not fall into one of
those classes.
[8] The material provided by the parties as a result of the Commission’s invitation to
provide comment falls into three categories;
submissions as to why Mr Paerau was justified in commencing and continuing his
unfair dismissal action at first instance, and how the Costs Decision was incorrectly
formed;
submissions about whether Rainshield Roofing and Just Relations have reached
agreement about their costs dispute as a consequence of publication of the Costs
Decision and whether variation or revocation of the decision in relation to Just
Relations is otiose;
submissions about whether Mr Paerau’s submissions dated 28 April might change
the Costs Decision.
[9] The extent to which I can reasonably take account of the first two of these categories is
limited. The Commission has found the following about s.603, which I consider to have
application in this matter;
“[8] Section 603 of the Act empowers the Fair Work Commission to vary or revoke a
decision made under the Act (with certain exceptions), either on its own motion or on
application by a person affected by the decision. There are no legislative criteria
prescribing when or how this power should be exercised. However, as the applicant
acknowledged during the proceedings, it is a power that is rarely exercised and in
many respects is exceptional because it is contrary to the principle regarding the
finality of decisions.
[9] Applications to vary or revoke a decision should not be used to re-litigate the
original case. It would generally be unacceptable, for instance, to allow a party, after a
case has been decided against it, to raise a new argument which, deliberately or by
inadvertence, it failed to put during the original hearing when it had the opportunity to
do so. In this case, the applicant submitted that since the original decision was made,
there has been a change in circumstances such that the applicant can no longer comply
with the original decision. I agree that if there has been such a change this could
constitute a reasonable basis for a variation of the original decision”.3 (references
omitted)
[10] The proposition that the section is rarely used and that there must be some persuasive
basis to its exercise follows the earlier decision of Munro J in Rheem - Rydalmere Plant
Industrial Action Order 2002 in which it was said;
“[36] No issue was taken in the proceeding before me about the availability of that
power to revoke an application to a section 127 order. Nor was any issue raised about
the principles applicable to the exercise of the power. In the circumstances, it is
sufficient for my purpose to note the basic points of principle that I consider to be
3 Re: Endeavour Energy [2014] FWC 198, Hamberger SDP
[2014] FWC 3946
5
applicable to the exercise of the power. It is necessary that the application for exercise
of the power be competently made. The effectiveness of the power confers a discretion
at large, but that discretion should be guided by the principles and considerations that
go to the merits of making or refusing an order made under section 127. The applicant
must satisfy the Commission by clearly showing that the reasons for making the order
sought to be revoked no longer prevail”.4 (emphasis added)
[11] The decision in that matter related to an application to revoke an order made under
s.127 of the Workplace Relations Act 1996, which dealt with “Orders to Stop or Prevent
Industrial Action”.
[12] Having considered the nature of the revocation power, the same decision referred to its
legislative context and what Munro J referred to as being “a principled approach to the
exercise of the power”. These considerations are worth repeating here, for the reason that they
place a context not only around what the power might be used to do, but the approach that
should be taken to their use, and in particular that there is a public interest in the finality of
litigation;
“[38] Each of those powers stemmed from an express power. In a 1931 decision, the
then Court adopted a view that implied a power to revoke orders should be taken to be
inherent to the then jurisdiction, unless a clear prohibition or contrary intention could
be found in the statute. Those observations may be worth reiteration. They set out a
principled approach to the exercise of the power. It is a useful guide to how the more
broadly expressed contemporary power should be exercised:
"The applicant unions submit that the case comes within section 38(o) which
enacts that the Court shall `as regards every industrial dispute of which it has
cognizance, have power ... to re-open any question'. By the re-opening here
referred to is obviously meant a reconsideration of the issue upon which a
previous decision has been given and a possible reversal or modification of that
decision.
Where a Court in the exercise of ordinary legal jurisdiction makes a decision
upon an issue of fact or law in a proceeding it is as a rule functus officio as to
that proceeding and cannot in the absence of express statutory authority re-
open it for the purpose or reconsidering its decision. In the public interest it is
necessary that there should be finality of litigation, subject however in many
cases to a right of appeal to a superior tribunal. ...
Where however this Court is exercising its arbitral powers the essential nature
of its functions is quite different from that of an ordinary Court. Its arbitral
decision prescribes a continuous rule of conduct for the parties in respect of
contracts of employment, a rule which, independently of any existing legal
relationship between them, in effect ordains they cannot make these contracts
except within the limits prescribed. This rule is intended to operate chiefly
upon facts that have not yet arisen and amid circumstances that may in the
4 (2003) AIRC unreported, Print PR929970; see also Arkwood Organic Recycling Pty Ltd T/A Arkwood Organic Recycling v
Transport Workers’ Union of Australia, Union of Employees (Queensland Branch) [2012] FWA 8916, at [20] - [29], per
Asbury C
[2014] FWC 3946
6
future change greatly in character. An award of this Court is therefore an
ordinance rather than a judgment. Moreover, orders of the Court incidental to
the exercise or refusal to exercise arbitral functions such as those under section
38(h), partake of the same character - in making them the Court acts as a quasi-
legislator and not as a Court in the strict sense of the word. The same reasoning
seems to apply to an order setting aside the whole or part of an award. It
resembles the repeal of an ordinance and the repeal of an ordinance by its
maker is certainly no bar to its re-enactment by that maker.
These considerations suggest that in the absence of statutory prohibition the
Court would have power to re-open any of its awards or orders made in the
course of its arbitral functions including an order setting aside an award. They
go to show that the words in section 38(o) as to re-opening any question are
wide enough to cover such an order and they are strengthened by the fact that
no arbitral orders whether positive or negative may be made the subject of
appeal to any other tribunal. Having regard to the quasi-legislative nature of the
Court's activity in making such orders and to the possible need for revoking or
modifying them, the power to revoke or modify should rest somewhere and its
appropriate place is in the Court. ...
... that there is nothing in the Act limiting the power of the Court to deal with
its own orders upon appropriate application and that the power `to re-open any
question' in section 38(o) is given without any qualification, forces the
conclusion that the Court has power to revoke its setting aside orders in these
cases provided that the relevant disputes in respect of which the awards were
made are still in fact existing.
But granting the jurisdiction to revoke, there will nevertheless remain very
important questions as to whether it should be exercised. These vary according
to circumstances and the Court does not think it can indicate here how they
should be dealt with. ...."” (per The Australian Railways Union v Victorian
Railways Commissioners (1931) 30 CAR 766 at 767-769)5
[13] The justification for the commencement and continuation of the original unfair
dismissal matter is the subject of the Costs Decision and it would be improper for me to go
back over that decision making other than to the extent that Mr Paerau’s 28 April submissions
constitute new material that clearly shows the reasons for the original decision no longer
prevail. In exercising my functions, I am bound to act in a judicial manner and to observe
procedural fairness in carrying out functions and exercising powers under the Act.6
[14] The possibility that two of the parties have entered into, or might enter, an agreement
over costs after publication of the Costs Decision is a matter for them. Their discussion of the
subject before me left me with the impression that it is by no means clear that an agreement
5 Ibid, at [38]
6 Allen v Fluor Construction Services Pty Ltd [2014] FWCFB 174, at [22], citing Coal and Allied Services Pty Ltd v Lawler
(2011) 192 FCR 78 at 83; Kioa v Minister for Immigration & Ethnic Affairs (1985) 62 ALR 321 at 347 per Mason J; R v
Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546; Re Australian
Bank Employees Union; Ex parte Citicorp Australia Ltd (1989) 167 CLR 513; 29 IR 148
[2014] FWC 3946
7
has been irrevocably entered into. Just Relations submits that the purported agreement
extinguishes the pre-existing cause of action and cites authority for this.
[15] Curtis v Darwin City Council7 concerned whether there was an agreement to settle the
unfair dismissal proceedings. It was held in first instance, after consideration of the evidence,
that an agreement had been entered into and there was insufficient jurisidiction to proceed and
permission to appeal was subsequently refused.
[16] That decision of the Full Bench followed the reasoning in Australian Postal
Corporation v Gorman8, which related to similar circumstances as Curtis. In Gorman, the
Court considered a case in which an unfair dismissal application was said to have been settled
pursuant to a binding agreement between the parties. The Commission in first instance found
there was such an agreement, a decision which was overturned on appeal in relation to one
person. Besanko J found the following in relation to the matter;
“In his reasons the Senior Deputy President drew a distinction between finding that
there was a binding settlement agreement and a finding that “there had been an
enforceable contract”. It is not entirely clear what he meant by that but I take him to
mean that any action to enforce the contract may need to be taken in another
jurisdiction and that is almost certainly so. However, that circumstance is not a reason
to conclude that FWA cannot recognise a binding settlement agreement. It might mean
that in a particular case FWA will adapt its remedies, that is, a temporary stay rather
than a dismissal, to meet the particular circumstances.
In my opinion, the Full Bench misconstrued s 587(1) of the Act and that error went to
its jurisdiction. That conclusion does not automatically lead to the grant of the relief
sought by the applicant because there was an alternative basis for the Full Bench’s
decision. It is to that alternative basis that I now turn.
The question of whether there was or was not a binding settlement agreement is a
question of fact, although no doubt informed by legal principles. In this case in
considering whether permission to appeal should be granted and in considering the
appeal itself the Full Bench was required to apply s 400 of the Act. I did not
understand the first respondent to contend otherwise. It seems to me that the Senior
Deputy President’s decision was a decision made “under this Part” within s 400(1) and
a decision “in relation to a matter arising under this Part” within s 400(2) despite the
fact that s 587 is in Pt 5-1 of the Act. The Senior Deputy President’s decision was a
decision to dismiss the first respondent’s application made under s 394 for a remedy
for unfair dismissal. That is a decision under Ch 3, Pt 3-2 in the same way as an order
for re-instatement or compensation would be a decision under that Part. Even if
FWA’s general power to dismiss is contained in s 587(3), it is part of FWA’s powers
when it makes a decision under Ch 3, Pt 3-2. The same reasoning applies if regard is
had not to the order but to the ground upon which the order was made, that is, that the
continued pursuit of the application is frivolous or vexatious.”9
7 (2012) 224 IR 174
8 (2011) 196 FCR 126, 211 IR 450
9 Ibid, at [35] - [37]
[2014] FWC 3946
8
[17] With respect, Just Relations’ submission that the purported agreement extinguishes the
pre-existing cause of action is not analogous to either case referred to. The cases refer to a
discretion on the part of the presiding Member, taking into account the facts, to decide to
recognise a binding settlement agreement and not proceed further. In this matter, the Costs
Decision extinguished the claim, not an agreement between two of the parties, whether or not
it has been concluded.
[18] Having considered the views of all parties, I consider it appropriate in all the
circumstances for the Commission to exercise its power under s.603 of the Act to vary the
decision issued in [2014] FWC 3777 on 6 June 2014 so as to take into account the material
Mr Paerau sought, but failed, to bring to the attention of the Commission.
[19] Consideration of that material together with all the other materials provided since
publication of the Costs Decision on 6 June 2014 leads me to varying that decision in the
following manner.
[20] By deleting paragraphs [10] and inserting new paragraphs [10] and [10a] as follows:
[10] Rainshield Roofing and Just Relations responded to the Directions in detail,
with each comprehensively addressing the statutory criteria, the factual circumstances
and the precedents which should be taken into account in forming a decision. On 29
April 2014, Mr Dircks advised to the Commission that he was not instructed to
represent Mr Paerau’s interests in these proceedings. Accordingly I proceed to
consider Just Relations’ submissions and other material as being in relation to Mr
Dircks’ personal interests only and not to those of Mr Paerau.
[10a] Mr Paerau endeavoured to provide submissions by sending material to an
incorrect email address. Mr Paerau’s submissions are short, consisting of only three
substantive sentences, and reiterating that he relied upon what he put in the merits
hearing; and that he held the belief he had been unfairly dismissed.
[21] By deleting paragraphs [33] and inserting new paragraph [33] as follows:
[33] The question of whether something is an unreasonable act or omission, or
whether it had a reasonable prospect of success, requires application of an objective
test, which means it is assessed “by reference to a standard external to the person who,
or the thing which, is being assessed”10 and not with reference to the beliefs of Mr
Paerau or Just Relations. In relation to a provision of the Workplace Relations Act
1996 dealing with the making of costs orders in unfair dismissal matters, the Full
Court of the Federal Court of Australia has held the following about the test of
objectivity;
“The words of s 170CJ(2)(b) of the Act give a clear guide to the task to be
performed by the Commission. The discretion to award costs is only available
if the Commission is satisfied that the party in question acted unreasonably in
failing to agree to terms of settlement.
10 Peter Butt and Peter E Nygh (eds), Butterworths Australian Legal Dictionary (LexisNexis Butterworths, 1997), p 808
[2014] FWC 3946
9
The requirement that the Commission be satisfied means that the Commission
must make an assessment of the actions of the party in question. In undertaking
this assessment it acts objectively, that is to say, it brings its own opinion to the
circumstances which resulted in the failure to agree to the terms of settlement.
Because the Commission must make its own judgment about whether the party
acted unreasonably, the views of that party about the chances of success of the
case cannot be determinative.”11
[22] By deleting paragraphs [62] and inserting new paragraph [62] as follows:
[62] I direct the parties to confer and endeavour to agree on the quantum of such
costs. In the event that there is no agreement about these matters, liberty is given to
Rainshield Roofing to apply within 14 days of the date of this varied decision for a
determination by me of the quantum of costs to be ordered and their apportionment, at
which time Rainshield Roofing is also to file and serve an itemised schedule of costs
reflecting this decision and the apportionment of costs between Mr Paerau and Just
Relations. For the purposes of clarity, the date by which this action is to be taken is
Wednesday 2 July 2014.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
Price code C, PR552015
11 Kangan Batman TAFE Council v AIRC (2006) 160 IR 405, p 415, per Black CJ, North and Mansfield JJ
& THE FAIR WORK - OMMISSION THE SEA
