1
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Ruben Galea
v
Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans
(U2016/10194)
DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 20 JUNE 2017
Application for relief from unfair dismissal; s.400A and s.611; application for costs.
Introduction
[1] On 31 March 2017 I issued a decision1 (Decision) which dealt with an unfair dismissal
remedy application by Mr Ruben Galea (Applicant) made under s.394 of the Fair Work Act
2009 (Act). I determined that the dismissal of the Applicant by Billabong Custom Caravans
Pty Ltd (Respondent) was harsh, unjust and unreasonable. I also concluded that reinstatement
of the Applicant to his former position with the Respondent was inappropriate and instead I
ordered the Respondent pay the Applicant compensation in the amount of $15,051 gross plus
9.5% superannuation with deduction of any taxation required by law. On 7 April 2017, the
Applicant (Costs Applicant) applied for an order for costs against the Respondent (Costs
Respondent) in relation to the unfair dismissal remedy application. The Costs Applicant relies
on both ss.400A and 611 of the Act to found his application for costs.2 Both parties filed
submissions and have consented to the costs application being dealt with on the papers
without the need for a hearing.
Background
[2] On 11 August 2016, the Costs Applicant lodged his unfair dismissal remedy
application. On 14 September 2016, the matter was the subject of conciliation where the Costs
Respondent offered the Costs Applicant 2 weeks’ pay to settle the matter, the offer was
rejected by the Costs Applicant and consequently, the matter was not resolved.3 Later that
day, the Costs Applicant’s solicitor sent a letter to the Costs Respondent on a ‘without
prejudice save to costs’ basis (14 September 2016 letter).4 The 14 September 2016 letter, inter
alia, indicated that the Costs Applicant believed he had a strong case and that he would be
prepared to settle the matter and accept 12 weeks’ pay ($13,680.00) inclusive of legal costs
1 [2017] FWC 562.
2 F6 – Application for Costs Submissions dated 7 April 2017 at [2].
3 Ibid at [8].
4 Ibid at [9].
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DECISION
E AUSTRALIA FairWork Commission
[2017] FWC 2943
2
and interests.5 The 14 September 2016 letter encouraged the Costs Respondent to engage an
experienced legal representative and also indicated that if the Respondent failed to accept the
offer, the Costs Applicant would later seek an order for costs against the Costs Respondent in
accordance with the principles stated in Calderbank v Calderbank6.7 The Costs Respondent
was given 10 days to accept the offer.8 The Costs Respondent did not provide a response to
the Costs Applicant’s 14 September 2016 letter. The offer lapsed.
[3] On 23 September 2016, directions for the conduct of the principal proceeding were
issued and the matter was set down for hearing. On 7 October 2016, the Costs Applicant’s
solicitor sent a letter to the Costs Respondent reinstating the earlier offer (7 October 2016
letter).9 The 7 October 2016 letter was mistakenly dated 14 September 2016.10 The 7 October
2016 letter, inter alia, indicated that this was the Costs Respondent’s “final chance” and that
the offer was strictly open until 5.00pm on Tuesday, 11 October 2016 and that failing
agreement, the Costs Applicant would prepare its evidentiary case.11
[4] On 10 October 2016, Mr Fortunato Salce, Director of the Costs Respondent sent a
letter to the Costs Applicant’s solicitor rejecting the offer (10 October 2016 letter).12 The 10
October 2016 letter indicated that Mr Salce would only be willing to offer 2 weeks’ pay and
that he would not be seeking legal representation as he believed the Costs Respondent had
enough evidence for the Fair Work Commission (Commission) to make a “fair judgement”.13
[5] On 9 November 2016, the parties received notice that the matter had been set down for
a one day hearing on 30 November 2016.
[6] On 29 November 2016, the parties received urgent advice from the Commission that
the application appeared to have been lodged out of time, and that no hearing had been set
down to address the question whether a further period should be allowed under s.394(3) of the
Act. Consequently, the hearing listed for 30 November 2016 was solely directed to that
question.
[7] On 30 November 2016, Mr Nicholas Shiels, Solicitor, sought permission to appear on
behalf of the Costs Applicant pursuant to s.596 of the Act. Mr Shiels was granted permission
on efficiency grounds having regard to the complexity of the matter, the Costs Applicant’s
non-technical grasp of English and taking into account fairness as between the Costs
Applicant and the Costs Respondent.14 The Costs Respondent did not have any legal
representation.
5 Attachment ‘A’ to F6 – Application for Costs Submissions dated 7 April 2017.
6 [1975] 3 All ER 333.
7 F6 – Application for Costs Submissions dated 7 April 2017 at [12], Attachment ‘A’.
8 Ibid.
9 F6 – Application for Costs Submissions dated 7 April 2017 at [15].
10 Ibid.
11 Attachment ‘B’ to F6 – Application for Costs Submissions dated 7 April 2017.
12 F6 – Application for Costs Submissions dated 7 April 2017 at [17].
13 Attachment ‘C’ to F6 – Application for Costs Submissions dated 7 April 2017.
14 PN47.
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[8] On 5 December 2016, I determined that there were exceptional circumstances to allow
a further period outside the 21 days (Jurisdictional Decision).15 In the Jurisdictional Decision,
I also determined the date of termination to be the date asserted by the Costs Applicant.
[9] On 9 December 2016, the Costs Applicant’s solicitor sent the Costs Respondent
another letter of compromise in the amount of $24,000 (9 December 2016 letter).16 The 9
December 2016 letter referenced paragraphs from the Jurisdictional Decision and highlighted
weaknesses in the Costs Respondent’s case. The 9 December 2016 letter also stated that the
Costs Applicant would be relying on Brett Haigh v Bradken Resources Pty Ltd17in that if it
was not for the dismissal, the Costs Applicant would have been employed for a period of 12
months. The offer was open until 4.00pm on 14 December 2016. The offer lapsed. The Costs
Applicant did not refer to this offer in his submission, presumably because he does not rely on
it for the purposes of this application.
[10] The matter was then set down for hearing on 19 December 2016. At the outset of the
hearing, I asked the parties whether there was any prospect of, or any willingness on the
parties, to enter into discussions with a view to seeking a resolution of the matter.18 The Costs
Respondent did not wish to engage in these discussions.19
Consideration
Legislation
[11] Section 400A of the Act provides as follows;
“400A Costs orders against parties
(1) The FWC may make an order for costs against a party to a matter arising under
this Part (the first party) for costs incurred by the other party to the matter if the
FWC is satisfied that the first party caused those costs to be incurred because of an
unreasonable act or omission of the first party in connection with the conduct or
continuation of the matter.
(2) The FWC may make an order under subsection (1) only if the other party to the
matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.”
[12] Relevantly, s.400A was inserted into the Act by of the Fair Work Amendment Act 2012.
The Explanatory Memorandum to the Fair Work Bill 2012 provides;
“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a
party to an unfair dismissal matter (the first party) if it is satisfied that the first party
caused the other party to the matter to incur costs by an unreasonable act or omission
in connection with the conduct or continuation of the matter.
15 [2016] FWC 8611.
16 Costs Respondent’s Submissions dated 9 May 2017.
17 [2014] FWCFB 236.
18 PN407.
19 PN408.
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169. As with the new power to dismiss applications under section 399A, the power to
award costs under section 400A is not intended to prevent a party from robustly
pursuing or defending an unfair dismissal claim. Rather, the power is intended to
address the small proportion of litigants who pursue or defend unfair dismissal claims
in an unreasonable manner. The power is only intended to apply where there is clear
evidence of unreasonable conduct by the first party.
170. The FWC's power to award costs under this provision is discretionary and is only
exercisable where the first party (whether the applicant or respondent) causes the other
party to incur costs because of an unreasonable act or omission. This is intended to
capture a broad range of conduct, including a failure to discontinue an unfair dismissal
application made under section 394 and a failure to agree to terms of settlement that
could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that
the act or omission by the first party was unreasonable. What is an unreasonable act or
omission will depend on the particular circumstances but it is intended that the power
only be exercised where there is clear evidence of unreasonable conduct by the first
party.”
[13] 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).”
Consideration – s.611
[14] Section 611 of the Act sets out some of the circumstances in which an order for costs
might be made in relation to a matter before the Commission.20 The primary position in
relation to costs of a matter before the Commission is that each person involved in a matter
must bear their own costs.21 The policy which underpins this provision seems clear. It is
20 The Commission may also make an order for costs under sections 376, 400A, 401 and 780.
21 Section 611(1).
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designed to enable a person to make or defend an application without being burdened with the
risk that an order for costs might be made against the person.
[15] In Church v Eastern Health,22 a Full Bench of this Commission said of s.611 of the
Act the following:
“Ascertaining the meaning of s.611 necessarily begins with the ordinary and grammatical
meaning of the words used. These words must be read in context by reference to the language
of the Act as a whole and to the legislative purpose.
There are some similarities between s.611 and s.570 of the FW Act. Section 570 deals with
the circumstances in which a party to proceedings in a court in relation to a matter arising
under the FW Act may be ordered to pay costs incurred by another party to the proceedings.
Section 570 states:
‘570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or
Territory) in relation to a matter arising under this Act may be ordered by the court to pay
costs incurred by another party to the proceedings only in accordance with subsection (2)
or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or
Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
the court is satisfied that the party instituted the proceedings vexatiously or without
reasonable cause; or
the court is satisfied that the party’s unreasonable act or omission caused the other
party to incur the costs; or
the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.”
Given the similarities between s.611 and s.570, in particular the common use of the expression
‘vexatiously or without reasonable cause’, judgements which have construed s.570 and its
legislative antecedents are relevant to our consideration of s.611.”
In Heidt v Chrysler Australia Ltd Northrop J said of s.197A of the Conciliation and
Arbitration Act 1904 (Cth), a predecessor provision to s.570 of the FW Act:
“The policy of s.197A of the Act is clear. It is designed to free parties from the risk of
having to pay the costs of an opposing party. At the same time the section provides a
protection to parties, defending proceedings which have been instituted vexatiously or
without reasonable cause. This protection is in the form of conferring a power in the
22 [2014] FWCFB 810.
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court to order costs against a party who, in substance, institutes proceedings which in
other jurisdictions may constitute an abuse of the process of a court.”
The application of these observations to the construction of s.611 requires some qualification.
Section 570 deals with the ordering of costs in court proceedings in relation to matters arising
under the FW Act. In court proceedings the usual practice is that an order for costs follows the
outcome of the substantive proceedings. As we have mentioned the Commission context is
different. The Commission’s power to order costs only arises in the context of ss.376, 400A,
401, 611 and 780 of the FW Act. There is no general practice of cost following the event.
Despite these differences the observations of Northrop J in Heidt are apposite to s.611.
Section 611 sets out a general rule - that a person must bear their own costs in relation to a
matter before the Commission (s.611(1)) - and then provides an exception to that general rule
in certain limited circumstances. The Explanatory Memorandum confirms this interpretation
of the section, it is in the following terms:
“2353. Subclause 611(1) provides that generally a person must bear their own costs in
relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain
limited circumstances. FWA may order a person to bear some or all of the costs of
another person where FWA is satisfied that the person made an application
vexatiously or without reasonable cause or the application or response to an
application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the power to
order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal
with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies must not
contravene a term of the order.”
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 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.”23 [Endnotes
omitted]
[16] As earlier indicated, the general position as to costs in relation to matters before the
Commission is that each person must bear his, her or its own costs.
[17] However, the legislature has recognised that there will be circumstances in which an
order for costs directed to a person might be appropriate. Therefore, the Commission may
exercise discretion to make an order that a person bears some or all of the costs of another
person in relation to an application to the Commission, if the Commission is satisfied that:
(a) a person made an application, or responded to an application, vexatiously or
without reasonable cause; or
23 Ibid at [21]-[27].
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(b) it should have been reasonably apparent to a person that that person’s application
or response to an application had no reasonable prospect of success.24
[18] Before the Commission begins to consider whether to exercise its discretion to make
an order for costs, it must first be satisfied that one of the circumstances set out in the
preceding subparagraphs is engaged in relation to an application or a response. Subparagraph
(a) above is directed to an examination made of the circumstance at the time the application or
response is made, while the existence of a circumstance in subparagraph (b) above may be
discerned at various points in time during the conduct of a matter before the Commission and
does not appear to be confined to the time at which a person makes, or responds to an
application.
Vexatiously
[19] A person will make or respond to an application vexatiously if the person’s
predominant purpose or motive is to harass or embarrass another person, or to gain a
collateral advantage.25 The issue which must be examined in determining whether a person
acted vexatiously in making, or responding to, an application, is the person’s purpose or
motive. In my view, it is not sufficient to point to a weakness in a person’s application or
response and to conclude from this weakness that the application or response was made
vexatiously. Evidence must be led or elicited which is directed to the person’s purpose and
from which it can be concluded that a person was motivated to make, or respond to, an
application by an intention or desire to harass or embarrass another person, or to gain some
collateral advantage.
[20] As to “vexatiously”, the Full Bench in Church observed as follows:
“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’.”26 [Endnotes omitted]
Without reasonable cause
24 Section 611(2)(a) and (b).
25 See Qantas Airways Limited v Carter [2013] FWCFB 1811; Nilson v Loyal Orange Trust (1997) 76 IR 180 at 181.
26 [2014] FWCFB 810 at [29].
http://www.fwc.gov.au/decisionssigned/html/2013fwcfb1811.htm
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[21] An application or response will not have been made without reasonable cause simply
because it fails or is not accepted.27 Considering whether an application or response was made
without reasonable cause requires an examination of the nature and strength of the application
or response. In Hatchett v Bowater Tutt Industries Pty Ltd (No 2)28 von Doussa J described
the test that is imposed by the expression “without reasonable cause” as similar to that applied
by a court on an application for the exercise of summary power to stay or to strike out a
proceeding. His Honour said that, to illustrate the test in that context, expressions such as
“frivolous”, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless”
and “bad beyond argument” had been used.29 In my opinion, these expressions are also apt to
describe the test to determine whether an application or response has been made “without
reasonable cause” within the meaning of s.611(2)(a) of the Act, but the test is by no means
limited to these expressions.
[22] The phrase “without reasonable cause” has been engaged to support costs orders
against an applicant whose application was “misconceived”,30 although an application or
response need not be properly described as “misconceived” for it to have been made without
reasonable cause.31 In Kanan v Australian Postal and Telecommunications Union,32 Wilcox J
considered that one way of testing whether a proceeding is instituted without reasonable cause
is to ask:
“whether, upon the facts apparent to the applicant at the time of instituting the preceding, there
was no substantial prospect of success. If success depends upon the resolution in the
applicant’s favour one or more arguable points of law, it is inappropriate stigmatise the
preceding as being “without reasonable cause”. But where, on the applicant’s own version of
the facts, it is clear that the proceeding must fail, it may properly be said that the preceding
lacks a reasonable cause”.33
[23] I respectfully adopt His Honour’s formulation as an appropriate means by which to
determine whether an application or response has been made “without reasonable cause” for
the purposes of s.611(2)(a) of the Act. Fundamentally, the decisions to which I have referred,
show that careful scrutiny is required by the Commission of an application or response in
order to ascertain whether that application or response was made without reasonable cause.
Ultimately, “it is a matter of judgment, sometimes of fine judgment, in all the circumstances
of a particular case whether a proceeding is brought without reasonable cause”.34
[24] In similar vein, the Full Bench in Church said:
“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
27 See R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473.
28 (1991) 28 FCR 324.
29 Ibid at 327.
30 See Standish v University of Tasmania (1989) 28 IR 129.
31 See Thompson and Ors v Hodder and Ors (1989) 31 IR 300.
32 (1992) 43 IR 257.
33 Ibid at 264-265.
34 See Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations
Commission and Anor (2006) 156 FCR 275 at 290.
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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.”
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 reasonable cause’. This is so even if, in
the result, the appeal proved unsuccessful.”
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.
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
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possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court
is satisfied cannot succeed’.”35 [Endnotes omitted]
It should have been reasonably apparent to a person
[25] An assessment of whether the circumstance described in s.611(2)(b) existed is not
limited to the time at which a person makes an application or response, although it may arise
at that time. Knowledge gained by a person during the course of a proceeding and after
making an application or response might lead to a conclusion that it should have been
reasonably apparent to a person that the person’s application or response had no reasonable
prospect of success. This knowledge could be gained, for example, at a time after the person
has received an opposing party’s evidentiary material, or during the course of the hearing.
[26] Section 611(2)(b) directs attention to that which should have been “reasonably
apparent to a person”. In this context, whether something should have been “reasonably
apparent to a person”, is not to be determined by reference to the subjective views of the
person. Rather, the question must be objectively determined.36
No reasonable prospects of success
[27] Section 611(2)(b) also directs attention to the substance of an application or response.
A conclusion that a particular application or response “had no reasonable prospect of success”
is one that should only be reached with extreme caution in circumstances where the
application or response is manifestly untenable or groundless, or so lacking in merit or
substance, so as to be not reasonably arguable.37
[28] In Spencer v The Commonwealth of Australia,38 the majority (Hayne, Crennan, Kiefel
and Bell JJ) of the High Court of Australia considered the meaning of the phrase, “no
reasonable prospect,” in the context of s.31A of the Federal Court of Australia Act 1976. In
that case, their Honours said the following:
“In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the
proceeding could be described with or without the additional intensifying epitaphs like
“clearly”, “manifestly” or “obviously” as “frivolous”,” untenable”, “groundless” or “faulty”
but none of these expressions alone or in combination should be understood as providing a
sufficient chart of the metes and bounds of the powers given by section 31A nor can the
content of the word “reasonable” in the phrase, “no reasonable prospect” be sufficiently, let
alone completely illuminated by drawing some contrast with what would be a frivolous,
untenable, groundless or faulty claim.
Rather, full weight must be given to the expression as a whole. The Federal Court may
exercise power under section 31A if, and only if, satisfied that there is no reasonable prospect
of success. Of course it may readily be accepted that the power to dismiss an action summarily
is not to be exercised lightly but the elucidation of what amounts to no reasonable prospect can
best proceed in the same way as content has been given through a succession of decided cases
35 Ibid at [30]-[33].
36 See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Wodonga Rural City Council v Lewis (2005) 142 IR 188.
37 See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Smith v Barwon Region Water Authority (2009) 187 IR 276 at
[48].
38 (2010) 241 CLR 118.
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to other generally expressed statutory phrases such as “just and equitable” when it is used to
identify the ground for winding up of a company. At this point in the development of the
understanding of the expression and its application, it is sufficient but important to emphasise
that the evident legislative power as revealed by the text of the provision would be defeated if
its application is read as confined to cases of a kind which fell within the earlier different
procedural regimes.”39
[29] In Spencer, the High Court was saying that one should not make the mistake of only
concluding that a proceeding has no reasonable prospect of success if it is frivolous,
untenable, groundless or faulty and that full expression should be given to that phrase. It
seems to me that the observations in Spencer are apt to apply to the construction and
application of the phrase “had no reasonable prospect of success” as it appears in s.611 of the
Act.
The Costs Applicant’s case
[30] The Costs Applicant submits that following receipt of the Jurisdictional Decision, it
should have become clear to the Costs Respondent that its response had no prospects of
success and that the Costs Respondent was continuing vexatiously.40
[31] The Costs Applicant also relies on [32] of the Jurisdictional Decision which reads as
follows:
“No warning that dismissal might occur had been given to the Applicant by the Respondent, and
dismissal by telephone whilst on annual leave has a tenor of unfairness about it.”
The Costs Applicant says that it should have become clear to the Costs Respondent that the
Cost Applicant’s application was likely to succeed and that the Costs Respondent’s defence
had no reasonable prospect of success.41
[32] One of the matters to be taken into account in considering whether there are
exceptional circumstances in connection with an application lodged outside of the prescribed
time is the merits of the case. The Costs Applicant relies on [32] of the Jurisdictional Decision
to make good his point that the Costs Respondent ought to have known that the Costs
Applicant’s application was likely to succeed.
[33] The Costs Applicant says that no evidence was led from “the girls in the office” and
“Spiro” by the Costs Respondent to substantiate the claim that the Costs Respondent was
unaware of the Applicant’s impeding leave.42
[34] The Costs Applicant also relies on [25] of the Decision which reads as follows:
“The Respondent failed to produce any probative evidence to support its contention that the
Applicant was slowing down production and convincing other employees to do the same.”
39 Ibid at [59] - [60].
40 F6 – Application for Costs Submissions dated 7 April 2017 at [29].
41 Ibid at [31].
42 Ibid at [45].
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The Costs Applicant says that the Costs Respondent’s assertion that he failed to train other
employees and slowed down production was the main reason advanced and says that the
Costs Respondent failed to call any employees to substantiate the allegation and further
submits that he did not receive any written warnings to warrant this assertion.43
[35] Further, the Costs Applicant says that pursuant to s.400A(1), the Costs Respondent’s
unreasonable acts in continuing the matter, and the Costs Respondent’s unreasonable
omission in not accepting the settlement offer caused the Costs Applicant to incur costs that
were avoidable.44
[36] The Costs Applicant seeks the following amount on scale as per the Fair Work
Regulations 2009 – Schedule 3.1 in the sum of $10,281.20 for the entire proceeding not
including this application for costs. The following table is an itemised schedule of costs:
Item Date Description Amount
1102 8/08/16 Initial meetingwith client $240
1102 10/08/16 Meeting with client to prepare F2 $240
101 10/08/16 Prepare F2 Application $210
1102 10/08/16 File F2 Application $13
10/08/16 Filing Fee $69.80
1102 18/08/16 Telephone from client $24
1102 18/08/16 Telephone to Fair Work Commission $24
601 18/08/16 Perusal of Response $32
1109 14/09/16 Attendance at Telephone Conciliation 3
hours
$663
804 07/10/16 Special Letter - CalderbankLetter $200
601 11/10/16 Perusal of letter from Respondent $16
806 11/10/16 File incomingletter $7
1102 14/10/16 Meeting with client for instructions 3
hours
$720
301 17/10/16 Prepare Outline of Submissions (1000
words)
$80
301 17/10/16 Prepare Witness Statement of Applicant
(1500 words)
$120
1102 17/10/16 Email to client $24
43 Ibid at [49] – [50].
44 Ibid at [53].
[2017] FWC 2943
13
1102 17/10/16 Email to Fair Work Commission $24
1102 17/10/16 Email to Respondent $24
601 03/11/16 Perusal of 3 Witness Statements from the
Respondent (8 pages)
$124
601 09/11/16 Perusal of Notice of Directions $16
1102 09/11/16 Email to client $24
206 22/11/16 Prepare Form 51 $63
1102 22/11/16 Email to Fair Work Commission $24
901 22/11/16 Service of Form 51 $62
1102 25/11/16 Meeting with Mr. Shadid to prepare
Witness Statement 2 hours
$480
1102 25/11/16 File Witness Statement $24
1102 25/11/16 Serve Witness Statement $24
601 28/11/16 Perusal of email from client $16
1102 28/11/16 Email to client $24
601 29/11/16 Perusal of email from Chambers $16
1102 29/11/16 Prepare for Hearing - 2 hours $480
1102 30/11/16 Attend Hearing at FWC - 5 hours $1005
601 01/12/16 Perusal of transcript $124
601 02/12/16 Perusal of email from Chambers $16
1102 02/12/16 Email to client $24
601 05/12/16 Perusal of Decision $124
601 05/12/16 Perusal of Notice of Listing $16
1102 05/12/16 Email to client $24
1102 16/12/16 Prepare for Arbitration 3 hours $720
1109 19/12/16 Attend Arbitration 5 hours $1005
601 19/12/16 Perusal of Directions $16
1102 19/12/16 Email to client $24
601 20/12/16 Perusal of transcript $124
1102 12/01/17 Prepare final written submissions 5 $1200
1102 12/01/17 Email to Chambers $24
1102 12/01/17 Email to Respondent $24
601 20/02/17 Perusal of 7 emails $124
[2017] FWC 2943
14
601 21/02/17 Perusal of Respondent's Final Written $124
1102 21/02/17 Email to client $24
1102 23/02/17 Prepare Reply to Final Written $720
1102 24/02/17 Email to Chambers $24
601 17/03/17 Perusal of email from Chambers $16
1102 20/03/17 Receive instructions 1hour $240
804 22/03/17 Special Letter to Chambers $50
1102 22/03/17 Amend letter $48
1102 22/03/17 Email to Chambers $24
601 23/03/17 Perusal of email from Chambers $16
1102 23/03/17 Receive instructions 30 minutes $120
804 24/03/17 Special letter to Chambers $50
601 31/03/17 Perusal of Decision $124
Total $10281.80
The Costs Respondent’s case
[37] The Costs Respondent opposes the application for costs and says that at no stage did it
act vexatiously or without reasonable cause.45 It maintains that at the time of the original
offer, the Costs Applicant’s application was out of time and the Costs Applicant had not yet
been granted permission to be represented by a lawyer.46 The Costs Respondent submits that
it did not cause any unreasonable acts or omissions in connection with the conduct or
continuation of the matter.47 It submits that the Costs Applicant was granted permission to be
represented on 5 December 2016.48 It further submits that on 9 December 2016, the Costs
Applicant made an offer to settle the matter in the sum of $24,000, approximately $9,000
more than what the Costs Applicant was awarded.
Did the Costs Respondent respond to the application vexatiously or without reasonable
cause?
[38] As indicated above, s.611(2)(a) is confined to the time at which a person makes, or
responds to an application. I note that the Costs Applicant did not advance any argument to
support any assertion that the Costs Respondent responded to the Costs Applicant’s unfair
dismissal remedy application, vexatiously or without reasonable cause, save at [52] where the
Costs Applicant says that “for reasons outlined from paragraphs 1 to 52 herein, the
Respondent has vexatiously and/or without reasonable cause responded to the application
made by the Respondent”. None of these matters are responsive to s.611(2)(a). I am not
45 Costs Respondent’s Submissions dated 30 May 2017.
46 Costs Respondent’s Submissions dated 9 May 2017.
47 Costs Respondent’s Submissions dated 30 May 2017.
48 Costs Respondent’s Submissions dated 9 May 2017. Note: The Costs Applicant was granted leave to be represented on 30
November 2016.
[2017] FWC 2943
15
satisfied that the circumstances in s.611(2)(a) have been made. There is nothing to which the
Costs Applicant points which would suggest the Costs Respondent’s response was vexatious
in the sense that its purpose was to harass or embarrass the Costs Applicant, or gain a
collateral advantage. Nor was any evidence led by the Costs Applicant directed to this
assertion.
[39] There is also nothing in the submissions which points to or suggests that the Costs
Respondent’s response was made without reasonable case. The Costs Respondent’s response
included the following:
“3.1 What were the reasons for the dismissal?
Employee was required to train people to cover his role whilst on leave. Refusal to do this
resulted in production slowing. He also convinced other employees to slow the production
down even to the point of taking unauthorised breaks during overtime.
3.2 What is your response to the Applicant’s contentions?
The Applicant was notified before he left for holidays that he was not required to return due to
his attitude of slowing production.
He rang here on 6/7/16 to see if we would re employ him or as he stated “does he have a job
when he comes back”. I was unavailable so I rang him back and told him that there was no
change to the original decision. He said he just wanted to know so he could extend his holiday
another couple of weeks. No communication was made after this call.”49
[40] As to the first matter above, the Costs Applicant, as I observed at [20] of the Decision,
conceded that he had refused to train a replacement employee. As to the second, this
ultimately turned on an acceptance by me of a version of events given in preference to
another. It is not suggested that neither the meeting before the leave was taken nor the phone
call during the leave did not occur. Nor is it suggested that even if the matters the Costs
Respondent alleged had been accepted, its case would nonetheless have failed. On no account
therefore, can it be said that the Costs Respondent’s response was made without reasonable
cause.
[41] I therefore do not consider that there is any appropriate basis for an order for costs to
be made on the grounds in s.611(2)(a).
Should it have been reasonably apparent to the Costs Respondent that the application had no
reasonable prospect of success?
[42] The Costs Applicant has on a number of occasions in his submissions indicated that
the Costs Respondent ought to have known that it had no reasonable prospects of success and
that the Costs Applicant’s application was likely to succeed.50
[43] I reject this submission. First, there is a difference between it being reasonably
apparent that the Costs Applicant was likely to succeed and it being reasonably apparent that
the Costs Respondent’s response has no reasonable prospects of success. The existence of the
49 F3 – Employer’s Response dated 17 August 2017 at question 3.1 – 3.2.
50 See for example F6 – Application for Costs Submissions dated 7 April 2017 at [31].
[2017] FWC 2943
16
former does not mean the latter is made out. Secondly, it cannot be said that the Costs
Respondent’s case was manifestly untenable or groundless or so lacking in merit or substance
so as to be not reasonably arguable. It is insufficient in my view to point to conclusions drawn
from facts found in a decision to make good an argument that it should have been reasonably
apparent to the Costs Respondent that his response to an unfair dismissal remedy application
had no reasonable prospect of success. That a response did not ultimately succeed does not
mean that it had no reasonable prospect of success. The determination of an unfair dismissal
remedy application requires the decision maker to consider all of the statutory factors that are
applicable to the application. In particular, a consideration of whether the Costs Applicant’s
dismissal was harsh, unjust or unreasonable is not confined to whether there was a valid
reason for the dismissal. So much is clear from the enumeration of factors that must be
considered by the Commission in determining whether or not a dismissal was harsh, unjust or
unreasonable.51 So much of the Costs Respondent’s case as was consistent with its initial
response was, although not strong, at least arguable and turned on facts which were disputed.
[44] During the merit hearing, the Costs Respondent also relied on a further reason for the
dismissal, that being that the Costs Applicant’s employment was terminated because he took
unauthorised leave, the determination of which required a resolution of competing evidence
and whilst ultimately the Costs Respondent’s evidence in relation to many of the allegations
was either not accepted by me or was insufficient to make good the allegations, it does not
follow that the response founded on those allegations was manifestly untenable or groundless
or so lacking in merit or substance to be not reasonably arguable.
[45] As to the Costs Applicant’s reliance on the Jurisdictional Decision, the hearing was
interlocutory in nature, I did not conclude that the Costs Respondent’s case was untenable and
my observation on an interlocutory basis as to the Costs Applicant’s merit case was prefaced
by the following observations:
“[31] As to the merits of the application, a hearing to consider whether time should be
extended is essentially an interlocutory hearing, which does not generally permit a substantive
testing of the merits of the particular application and so, in most cases the best that can be done
is to take the Applicant's case at its highest and assess the merits from that perspective. That is,
to look at the Applicant's case in the most favourable light and make an assessment about the
merits.”
[46] Although the Jurisdictional Decision ought to have raised reasonable concerns about
the strength of the Costs Respondent’s case, my conclusions therein do not found a proper
basis for a conclusion that it should have been reasonably apparent that the Cost Respondent’s
case had no reasonable prospect of success. I am therefore not satisfied that it should have
been reasonably apparent to the Costs Respondent that his response to the Costs Applicant’s
unfair dismissal remedy application has no reasonable prospect of success.
Did the Costs Respondent cause those costs to be incurred because of an unreasonable act or
omission in connection with the conduct or continuation of the matter?
51 See Section 387.
[2017] FWC 2943
17
[47] The Costs Applicant submits that the Costs Respondent’s unreasonable acts in
continuing the matter, and the Costs Respondent’s unreasonable omission in not accepting the
settlement offer caused the Costs Applicant to incur costs that were avoidable.52
[48] I do not accept the Costs Applicant’s proposition that a failure by the Costs
Respondent to accept a settlement offer prior to hearing is an unreasonable act or omission.
The final award of compensation was in the order of $15,051.00. The first two offers made to
the Costs Respondent were in sum of $13,680. These were made before the parties’
evidentiary cases were filed. In those circumstances, I am not satisfied that at the time of
making the settlement offers described above, the Costs Respondent’s refusal to accept the
offers was an unreasonable act or omission.
[49] The third offer made to the Costs Respondent was in the sum of $24,000. The
settlement offer was made after the Costs Applicant was successful as set out in the
Jurisdictional Decision. The offer was significantly higher, than the amount which was
ultimately awarded to the Costs Applicant. Having regard to the above, I am not persuaded
that at the time of making the settlement offer, the Costs Respondent’s refusal to accept the
offer was an unreasonable act or omission. In any event as I have earlier observed, the Costs
Applicant does not appear to rely on this offer.
[50] The other matters to which the Costs Applicant points relate to the way in which the
Costs Respondent conducted its case and in particular to the absence of some evidence (noted
in my Decision) to support the Costs Respondent’s case. It is, with respect, a long bow to
draw to suggest that an unrepresented litigant, which is unfamiliar with evidentiary
requirements, weight ascribed to particular evidence and inferences that might be drawn from
particular evidence, or the absence of it, should be found to have acted unreasonably because
of the manner in which it conducted its evidentiary case. I am not persuaded that I should so
conclude in this case.
Conclusion
[51] For the reasons given, I am not persuaded that any of the circumstances in s.611(2) or
s.400(A)(1) are engaged. Consequently, there is no basis for a costs order to be made. The
application for costs made under ss.400A and 611 is dismissed. An order dismissing the
application is separately issued in PR593917.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
Price code A, PR593311
52 F6 – Application for Costs Submissions dated 7 April 2017 at [53].
THE FAIR WORK COMMISSION SEAL OF
