1
Fair Work Act 2009
s.402 - Application for costs orders against lawyers and paid agents under s.401
Rohan Veal
v
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A
Sundance Marine
(U2012/13624)
(C2013/4599)
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A
Sundance Marine
v
Rohan Veal
(U2013/12263)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN
DEPUTY PRESIDENT HAMILTON
COMMISSIONER GREGORY MELBOURNE, 29 SEPTEMBER 2014
Amended pursuant to paragraph 2(b) of the order of the Federal Court dated 28 August 2014
in matter VID78/2014 by deleting paragraphs 47-71 and 73-74 inclusive.
[1] The decision issued by the Commission on 11 December 2013 [[2013] FWCFB 8960]
is amended with effect from 28 August 2014 pursuant to paragraph 2(b) of the order of the
Federal Court dated 28 August 2014 in matter VID78/2014, which states:
The record contained in the Decision of the Full Bench of the Fair Work Commission
dated 11 December 2013 is amended by deleting paragraphs 47-71 and 73-74
inclusive.
Printed by authority of the Commonwealth Government Printer
Price code C, PR555975
[2013] FWCFB 8960
CORRIGENDUM
E AUSTRALIA FairWork Commission
2
Fair Work Act 2009
s.394—Unfair dismissal
s.402—Application for costs orders against lawyers and paid agents under s.401
Rohan Veal
v
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A
Sundance Marine
(U2012/13624)
(C2013/4599)
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A
Sundance Marine
v
Rohan Veal
(U2013/12263)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN
DEPUTY PRESIDENT HAMILTON
COMMISSIONER GREGORY ADELAIDE, 11 DECEMBER 2013
Applications for costs - ss.400A, 401, 611 - unreasonable act or omission.
[1] This decision deals with two separate costs applications. An initial costs application
was made by Mr Veal (U2012/13624) and, a subsequent costs application (U2013/12263) was
lodged by Sundance Marine Pty Ltd as trustee for the Sundance Unit Trust T/A Sundance
Marine (Sundance Marine) after an appeal made by Mr Veal (C2013/4599). A brief summary
of the background to the applications is set out below.
[2] On 10 May 2013 Bissett C issued a decision1 in which she found that the termination
of Mr Veal’s employment with Sundance Marine, was unfair. Commissioner Bissett awarded
Mr Veal compensation in lieu of reinstatement.
[3] Mr Veal subsequently made the initial application for costs against Sundance Marine
and its legal representatives HR Legal, Mr Krins of HR Legal and Mr Maher, also of HR
Legal. That application was made pursuant to ss.400A, 401 and 611 of the Fair Work Act
2009 (the FW Act).
[2013] FWCFB 8960
DECISION
[2013] FWCFB 8960
3
[4] Mr Veal then lodged an appeal against the Commissioner’s decision. Commissioner
Bissett deferred consideration of the initial costs application pending the determination of this
appeal. The appeal was primarily directed at the Commissioner’s conclusions with respect to
the amount of compensation payable to Mr Veal.
[5] In a decision2 issued on 30 July 2013, this Full Bench refused the appeal. Sundance
Marine then made a costs application (the second costs application), pursuant to ss.400A, 401
and 611 of the FW Act. In this costs application Sundance Marine sought costs on an
indemnity basis, but alternatively, as might otherwise be specified against Mr Veal and/or his
legal representatives, McDonald Murholme.
[6] The two discrete costs applications were referred to this Full Bench by the Fair Work
Commission (FWC) President pursuant to ss.582 and 615 of the FW Act. This referral
followed consultation with the parties. In referring the two matters, the President issued a
direction pursuant to s.615B(3) that the Full Bench must, in dealing with the applications,
take into account:
(a) everything that occurred before the FWC; and
(b) everything that the FWC did;
in relation to the matter before the Full Bench begin dealing with the applications.
[7] Initial Directions relative to the costs applications were issued on 30 August 2013.
Those Directions advised that the Full Bench proposed to deal with both matters through the
consideration of written submissions with an opportunity for submissions in reply. The
Directions invited both parties to indicate if a hearing should be convened relative to the
applications. Both parties have provided written submissions and submissions in reply. No
request for a hearing has been made. On 15 November 2013 the Full Bench invited the parties
to provide further submissions with respect to the application of ss.400A and 401 in their
current form given that the termination of Mr Veal’s employment occurred before 1 January
2013. Both parties have subsequently revised their submissions. We have considered the
applications in the context of these submissions, all of the circumstances of Mr Veal’s initial
application and the appeal proceedings.
The history of the matter
[8] Mr Veal’s application was lodged on 26 September 2012. Mr Veal was represented by
McDonald Murholme. The application was not resolved in a telephone conciliation
conference on 15 October 2012. Shortly after that conference Mr Veal made a conditional
formal settlement offer of $15,392 as part of a without prejudice position except as to costs.
Sundance Marine, represented by HR Legal, responded confirming its preparedness to pay Mr
Veal $12,000 subject to the terms of a proposed deed.
[9] McDonald Murholme and HR Legal then engaged in a series of communications about
whether Mr Krins’ continued representation of Sundance Marine breached the relevant legal
ethics. This issue was not resolved.
[10] A revised settlement proposal was presented by Mr Veal’s representative in December
2012 for some $34,000, again without prejudice save to costs. This settlement proposal was
again presented on the basis that it was subject to arrangements in a specified deed.
[2013] FWCFB 8960
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McDonald Murholme subsequently proposed further FWC mediation. This mediation
proposal and the settlement proposal were rejected. Through its representatives, Sundance
Marine reiterated its preparedness to settle the matter for $12,000 subject to a deed it
proposed.
[11] There followed various correspondence relating to threatened legal action with respect
to Mr Veal’s alleged use of confidential commercial information. Again, we do not
understand that this issue was resolved or ultimately pursued.
[12] We note that the hearing before Bissett C commenced on 4 March 2013 and the
Commissioner’s decision was issued on 10 May 2013.
The relevant costs provisions
[13] Section 400A came into effect on 1 January 2013. Schedule 11 “Application,
transitional and savings provisions”, Part 6 Item 12 provides that this section operates in
relation to dismissals that take effect after that date. The termination of Mr Veal’s
employment took effect before 1 January 2013 and hence this section cannot have application
in these circumstances. Both parties, in their supplementary submissions have recognised this
and do not pursue their respective claims under this section.
[14] Section 401 is also the subject of an amendment which took effect from 1 January
2013 with respect to employment terminations which occurred after that date. Section 401, as
it applied relative to this matter stated:
“Section 401 Costs orders against lawyers and paid agents
401(1) If FWA has granted permission in accordance with section 596 for a person to
be represented by a lawyer or paid agent in a matter arising under this Part before
FWA, FWA may make an order for costs against the lawyer or paid agent if FWA is
satisfied:
(a) that:
(i) the lawyer or paid agent caused costs to be incurred by the other
party to the matter because the lawyer or paid agent encouraged the
person to start or continue the matter; and
(ii) it should have been reasonably apparent that the person had no
reasonable prospect of success in the matter; or
(b) that the lawyer or paid agent caused costs to be incurred by the other party
to the matter because of an unreasonable act or omission of the lawyer or paid
agent in connection with the conduct or continuation of the matter.
401(2) FWA may make an order under this section only if the other party to the matter
has applied for it in accordance with section 402.
401(3) This section does not limit FWA’s power to order costs under section 611.”3
[2013] FWCFB 8960
5
[15] Section 401 refers to the concept of whether it should have been reasonably apparent
that a person had no reasonable prospect of success. We address that concept relative to
s.611(2)(b) but note that, because the section applies to the actions taken or not taken by a
legal representative of a party it seems to us to follow that these actions or omissions by
legally qualified and trained people should be measured against a higher standard than that
which would apply to an unrepresented party, by virtue of the representative’s training and
expertise.
[16] The phrase “unreasonable act or omission” was a component of provisions of s
170CJ(3) of the Workplace Relations Act 1996 (the WR Act). For the sake of completeness
we recite ss.170CJ(1), (2) and (3) as it applied in March 2006.
“Section 170CJ. Commission may order payment of costs
(1) If the Commission is satisfied:
(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;
[2013] FWCFB 8960
6
the Commission may, on an application by the other party under this section,
make an order for costs against the first party.”
[17] The concept of an unreasonable act or omission in s.170CJ(3) was considered in
Goffet v Recruitment National Pty Ltd4 relative to 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 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.”
[18] In terms of subsequent behaviour of a party to an unfair dismissal application, 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.”
[19] A Full Bench considered the former s.170CJ(2) and (3) in Brazilian Butterfly Pty Ltd
and Charalambous.5 It addressed the pre-existing authorities relevant to these provisions
before stating:
“[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
[2013] FWCFB 8960
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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
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 removed)
[20] 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
[2013] FWCFB 8960
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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 removed)
[21] Some additional guidance about the concept of an unreasonable act may be found in
the Full Bench decision in Stagno v Frews Wholesale Meats6 in the following terms:
““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.”“
[22] Section 611 states:
“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
[2013] FWCFB 8960
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(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).”
[23] The concept of vexatious in this context was considered in Holland v Nude Pty Ltd
T/A Nude Delicafe.7 We agree with the approach summarised in that matter:
“[7] We turn to the first issue raised by the appellants’ grounds of appeal. The approach
generally taken by members of the Tribunal as to the meaning to be ascribed to the
word “vexatiously” in s.611(2)(a) is to adopt the comments of Justice North in Nilsen
v Loyal Orange Trust 1 (Nilsen). The Commissioner referenced this case in her
reasons for decision. Nilsen was decided in 1997 when the then Workplace Relations
Act 1996 applied however the relevant provision considered by His Honour was in
terms similar to s.611(2)(a) being whether an applicant “instituted the proceeding
vexatiously or without reasonable cause”. About this provision His Honour said:
“The next question is whether the proceeding was instituted vexatiously. This
looks to the motive of the applicant in instituting the proceeding. It is an
alternative ground to the ground based on a lack of reasonable cause. It
therefore may apply where there is a reasonable basis for instituting the
proceeding. 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 : see Attorney General v Wentworth (1988) 14 NSWLR
481 at 491. The approach of the High Court in an application for a permanent
stay of criminal proceedings on the ground of abuse of process constituted by
improper purpose is instructive. In Williams v Spautz [1992] HCA 34, (1992)
174 CLR 509, at 522, Mason CJ, Dawson, Toohey and McHugh JJ said:
“Bridge LJ identified one difficulty when he said ([1977] 1 WLR, at p
503; [1977] 2 All ER, at p 586):
‘What if a litigant with a genuine cause of action, which he would wish
to pursue in any event, can be shown also to have an ulterior purpose in
view as a desired byproduct of the litigation? Can he on that ground be
debarred from proceeding? I very much doubt it.’ (Emphasis added.)
So would we. But his Lordship, by implication, evidently sees no
difficulty with the case in which the plaintiff does not wish to pursue
his or her cause of action to a conclusion because he or she intends to
use the proceedings for a collateral and improper purpose.”“
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[24] In Read v Gordon Square Child Care Centre Inc T/A Gordon Square Early Learning
Centre8 a Full Bench of the FWC considered the phrase “without reasonable cause” as it
appears in s.611. That Full Bench stated:
“[5] The phrase “without reasonable cause” was considered by Wilcox J in Kanan v
Australian Postal and Telecommunications Union. 5 Section 347(1) of the then
Industrial Relations Act 1988 (Cth) provided that:
“A party to a proceeding (including an appeal) in a matter arising under this
Act shall not be ordered to pay costs incurred by any other party to the
proceeding unless the first-mentioned party instituted the proceeding
vexatiously or without reasonable cause.” [Underlining added]
[6] In Kanan, Wilcox J said in respect of the phrase:
“A proceeding is not to be classed as being launched ‘without reasonable
cause’ simply because it fails. As Gibbs J said in R v Moore; Ex parte
Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at
473, speaking of the Conciliation and Arbitration Act equivalent of s 357 (s
197A):
‘... a party cannot be said to have commenced a proceeding “without
reasonable cause”, within the meaning of that section, simply because
his argument proves unsuccessful. In the present case the argument
presented on behalf of the prosecutor was not unworthy of
consideration and it found some support in the two decisions of this
court to which I have referred. The fact that those decisions have been
distinguished, and that the argument has failed, is no justification for
ordering costs in the face of the prohibition contained in s.197A.’
In Standish v University of Tasmania (1989) 28 IR 129 at 139 Lockhart J
applied the qualification in ordering costs against an applicant whose case he
thought ‘misconceived’, rather than simply unsuccessful. But, as the Full Court
pointed out in Thompson v Hodder (1989) 29 IR 339 at 342, ‘there may be
cases which could not be described properly as “misconceived” but which
would nevertheless be held to have been instituted without reasonable cause’.
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 it appears that,
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.”
The initial costs application
[25] We have summarised the position of the parties with respect to the grounds upon
which Mr Veal’s costs application is now founded.
[2013] FWCFB 8960
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[26] With respect to s.401, Mr Veal asserts that it should have been reasonably apparent to
HR Legal, Mr Krins and Mr Maher as the employer representatives, that Sundance Marine
had no reasonable prospect of success as they provided advice to Sundance Marine
throughout the termination of employment process and the hearing, that Mr Beck’s evidence
confirmed that the termination of employment decision was made before 10 September 2012,
and that no evidence of alleged poor performance was led.
[27] Mr Veal further asserts that HR Legal, Mr Krins’ and Mr Maher’s role in rejecting the
reasonable settlement offers was an unreasonable act given the amount finally awarded. In
these respects, Mr Veal’s position is that Sundance Marine took advice from its lawyers, Mr
Krins and/or Mr Maher before, during and after the termination of his employment. Mr Veal
asserts that the evidence of Mr Beck of Sundance Marine was that the termination of
employment decision was made before discussions with him on 10 September 2012. Further,
that Sundance Marine led no evidence to support its allegations of poor performance on the
part of Mr Veal. Mr Veal’s position is that a settlement offer of $15,392 was formally put to
Sundance Marine after the FWC conciliation conference, that Sundance Marine responded by
confirming its existing $12,000 position and that the Commissioner’s decision resulted in an
order of compensation of $21,237.
[28] The HR Legal, Mr Krins and Mr Maher position with respect to s.401 is that there was
no evidence to support the submission that they encouraged Sundance Marine to pursue the
matter and to not settle the matter in an unreasonable manner or that their advice represented a
failure to advise Sundance Marine that its defence to the application had no reasonable
prospect of success.9 Further, that in any event there was a reasonable prospect of success in
terms of the respondent’s position.
[29] Furthermore, HR Legal, Mr Krins and Mr Maher denied that there was no reasonable
prospect of success relative to the quantum of the compensation. In this respect they noted
that Mr Veal appealed the initial decision.
[30] Finally, HR Legal, Mr Krins and Mr Maher asserted that the respondent, as the
defendant, is entitled to defend its position without punitive costs and is, in this respect
distinguishable from the position of the applicant.
[31] Mr Veal asserts that Sundance Marine, on the advice of Mr Krins and/or Mr Maher
acted vexatiously or without reasonable cause such that costs should be awarded against it
pursuant to s.611. In this respect Mr Veal refers to advice provided by Mr Krins and Mr
Maher, the evidence of Mr Beck to the effect that the termination of employment decision
was made before 10 September 2012, and that there was no evidence led of alleged poor
performance. Mr Veal asserts that Mr Krins and/or Mr Maher should have advised Sundance
Marine that its actions were inconsistent with s.387 and should have promoted settlement of
the matter before the application was filed.
[32] On the same basis, Mr Veal asserts that it should have been reasonably apparent to
Sundance Marine, that its continued opposition to the application in the manner pursued had
no reasonable prospect of success.
[33] In response to Mr Veal’s application in so far as it is made under s.611, Sundance
Marine reiterated that, on the issue of liability at all, there was a reasonable prospect of
[2013] FWCFB 8960
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success. Further, that there was a reasonable prospect of success relative to the quantum of
any compensation and that its actions as the defendant were reasonable.
Findings
[34] We have briefly summarised the findings of the Commissioner in her decision of 10
May 2013. We note that, in our earlier appeal decision10 we identified no error in the
approach adopted by the Commissioner.
[35] The Commissioner referred to a number of factual issues associated with Mr Veal’s
employment arrangements. She addressed allegations of poor performance and concluded that
there was no evidence of minimum performance levels,11 that the evidence of Mr Beck of
Sundance Marine was that Mr Veal’s performance was not satisfactory but there was no
evidence of advice to him to this effect, or to the articulation, to Mr Veal, of performance
expectations.12 With respect to sales, the Commissioner concluded that Mr Veal was meeting
the minimum requirements.
[36] The Commissioner considered the evidence of Sundance Marine managers, Mr J and
Mr D Beck about their concerns over Mr Veal’s approach to increasing sales, including the
matters they raised with him.13 She addressed the Sundance Marine failure to provide
evidence with respect to specific allegations.14 She summarised the Sundance Marine
evidence relative to concerns about Mr Veal’s alleged argumentative behaviour.15
[37] The Commissioner’s conclusion about whether there was a valid reason for the
termination of Mr Veal’s employment was predicated by reference to established authorities
in this respect. The Commissioner reviewed the material before her and concluded:
“Overall I do not consider that the matters which formed the reason for the dismissal of
the Applicant, viewed objectively, either individually or collectively, provide a sound
or defensible basis for the dismissal of the Applicant. I therefore find that there was no
valid reason for the termination of his employment.”16
[38] The Commissioner then considered, and reached conclusions about each of the
remaining factors set out in s.387. She referred to Byrne and Another v Australian Airlines17
before detailing her conclusion:
“[95] In this case I have decided that the dismissal of the Applicant was unjust as there
was no valid reason for the dismissal and unreasonable because of the lack of
evidence, particularly of poor performance, to ground the decision.
[96] There is no evidence of poor performance, low sales, a failure to make a
YouTube video, or undertake some specified training.
[97] Whilst I have found that the Applicant was not without fault in the breakdown in
the relationship (which is related to his argumentative behaviour and refusal to grow
sales as the Respondent required) the relationship had not deteriorated to such an
extent that dismissal was justified. In any event there is scant evidence of the
Respondent raising these issues with the Applicant.
[2013] FWCFB 8960
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[98] I have considered the manner in which the dismissal came about, the failure to
afford the Applicant an opportunity to respond, and the behaviour of the Applicant.
Overall I am satisfied that the dismissal was unjust and unreasonable.”
[39] In terms of remedy, the Commissioner concluded that reinstatement was not
appropriate. She considered the factors in s.392 in the context of the evidence before her
before specifying compensation of $21,237.68. We note that, notwithstanding the
correspondence which was exchanged late in 2012 and early in 2013 regarding Mr Veal’s
alleged use of client information he obtained as a Sundance Marine employee and the
consideration of this issue in the settlement options considered by the parties, this matter did
not arise in the proceedings below. It is significant to note that the Commissioner’s decision
with respect to remedy involved the exercise of discretion: she could have arrived at a number
of different outcomes, having considered the factors in s 392. These conclusions may have
substantially affected the amount of compensation payable.
[40] Notwithstanding that the preconditions for the making of a s.401 application for costs
were met in these circumstances, we are not satisfied, in terms of s.401(1) (a) that the
evidence before us establishes that either HR Legal, Mr Krins or Mr Maher encouraged
Sundance Marine to respond to the matter when it should have been reasonably apparent that
Sundance Marine had no reasonable prospect of success or, alternatively, that HR Legal, Mr
Krins or Mr Maher’s actions represented an unreasonable act or omission.
[41] Sundance Marine presented an arguable case to the Commission. It was not a hopeless
case such that, on its own facts, it was doomed to fail. Further, the settlement offers presented
on behalf of Mr Veal identified monetary compensation and recognition of non-monetary
issues. The $12,000 offer put by Sundance was not an unreasonable offer in the context of this
matter. Satisfactory evidence which establishes the Sundance Marine position represented an
unreasonable act or omission has not been made out to us. We note that we may have arrived
at a different conclusion had Sundance Marine not put any form of settlement offer.
[42] Further, on the evidence before us, we are not satisfied that HR Legal, Mr Krins or Mr
Maher undertook an unreasonable act or omission in connection with the conduct of the
matter for the purposes of s 401(1) (b).
[43] We note the assertion that HR Legal did not properly participate in a separate legal
ethics enquiry relative to this matter but we are not satisfied, on the evidence before us, that
conduct of the character necessary for a finding pursuant to s.401 has been established. In this
respect we note that both parties in the matter were legally represented and observe that the
conduct of the matter may have been substantially expedited had each of those representatives
adopted different approaches. This, however, falls short of the degree of satisfaction required
about an unreasonable act or omission.
[44] On this basis we are not satisfied that the Sundance Marine behaviour, in responding
to Mr Veal’s application involved an unreasonable act or omission.
[45] In terms of s.611, we do not consider that the Sundance Marine position was such that
on its own version of events, it had no case such that it should have settled the matter on the
terms proposed or should have conceded the application. Accordingly, we are not satisfied
that Sundance Marine responded to the application vexatiously, without reasonable cause, or
that its response was such that it should have been reasonably apparent to Sundance Marine
[2013] FWCFB 8960
14
that it had no reasonable prospect of achieving an outcome which would closely approximate
that which it had offered in settlement of the matter.
Conclusion - The Initial Costs Application
[46] For the reasons we have outlined, the initial costs application lodged by Mr Veal is
refused.
Conclusion
[72] We have refused the initial costs application, made by Mr Veal.
Printed by authority of the Commonwealth Government Printer
Price code C, PR544544
OF FAIR WORK GOHIS 1 AUSTRALIA THE SEAL SENIOR DEPUTY PRESIDENT
[2013] FWCFB 8960
15
1 [2013] FWC 2653
2 [2013] FWCFB 5205
3 We note that references to FWA were changed to FWC in the Fair Work Amendment Act 2012
4 [2009] AIRCFB 626
5 PR968915, 25 August 2006
6 1998 84 IR 270
7 [2012] FWAFB 6508
8 [2013] FWCFB 4056
9 Mr Veal’s application, para 4(f)
10 [2013] FWCFB 5205
11 [2013] FWC 2653, paras [43] and [44]
12 [2013] FWC 2653 paras [45] - [47]
13 [2013] FWC 2653 paras [50] - [53]
14 [2013] FWC 2653 paras [54] and [55]
15 [2013] FWC 2653 paras [56] - [58]
16 [2013] FWC 2653 para [73]
17 1995 185 CLR 410
