1
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Dino De Giusti
v
NSW Trains t/a NSW Trainlink
(U2017/4325)
DEPUTY PRESIDENT SAMS SYDNEY, 4 MAY 2018
Application for an unfair dismissal remedy – application dismissed pursuant to s 399A of the
Act – application for costs against applicant – application under s 400A and s 611 of the Act
– ‘general rule’ as to costs – exceptions to ‘general rule’ – no case to answer – principles
considered – whether application instituted without reasonable cause – prospects of success –
numerous unreasonable acts or omissions – failure to attend proceedings or comply with
directions – application a rare example where ‘general rule’ does not apply – costs
application granted.
[1] This decision will determine a costs application filed by NSW Trains t/a NSW
Trainlink (NSW Trains), pursuant to ss 400A and 611 of the Fair Work Act 2009 (the ‘Act’).
Filed on 21 December 2017, the application seeks orders for costs against Mr D De Giusti, an
applicant in unfair dismissal proceedings which were dismissed by the Commission on
15 December 2017 pursuant to s 399A of the Act; De Giusti v NSW Trains [2017] FWC 6742
(the ‘s 399A Decision’). The application also seeks costs in respect to an earlier decision on 8
November 2017 in which NSW Trains was granted permission to be represented by a lawyer,
pursuant to s 596 of the Act; Dino De Giusti v NSW Trains [2017] FWC 5710 (the ‘s 596
Decision’). In accordance with s 402 of the Act, the costs application was filed within 14 days
after the originating unfair dismissal application was dismissed.
[2] The costs application was listed for Mention and Directions on 16 January 2018. Mr T
Woods and Mr A Battagello appeared for NSW Trains. There was no appearance for, or on
behalf of Mr De Giusti (Solicitors, Lander & Rogers). I note the listing was directed to the
email address Mr De Guisti and his partner/representative, Ms Fiona Nash, had previously
used to communicate with the Commission. There was no automatic ‘not received’ reply.
[2018] FWC 1843
DECISION
E AUSTRALIA FairWork Commission
[2018] FWC 1843
2
[3] In order to ensure Mr De Giusti was provided with a reasonable opportunity to
respond to the costs application, I issued further directions as follows:
‘Pursuant to the directions hearing in this matter today, the Fair Work Commission
(the ‘Commission’) directs:
1. The applicant (Mr Dino De Giusti) to file in the Commission, and serve on
the respondent, an outline of submissions, witness statements (if any) and
any other documentary evidence on which he seeks to rely on in opposition
to the respondent’s application that the applicant pay its costs, pursuant to
ss 400A and/or 611 of the Act, by no later than COB on 30 January 2018.
2. The respondent to file in the Commission, and serve on the applicant, an
outline of submissions, witness statements (if any) and any other
documentary evidence on which it seeks to rely on in reply to the
applicant’s material by no later than COB on 6 February 2018.
Either party may request a hearing of the above application. If no such request is
made, it will be determined ‘on the papers’.
The applicant is advised that should he fail to comply with the directions, the
respondent’s application for costs will be determined based on the material already
filed in the Commission and without further recourse to him.’
[4] Mr De Giusti filed no submissions or any material in opposition to NSW Trains’ costs
application. Neither he, or Ms Nash have had any communication with Chambers about this
matter. In addition, I note there was no appeal of either of my earlier decisions. Accordingly, I
propose to determine the costs application ‘on the papers’; being the application and
submissions of NSW Trains.
[5] Solicitors for NSW Trains relied on my two earlier decisions referred to above in
submitting that Mr De Giusti’s conduct since filing his unfair dismissal application in April
2017, was such as to establish exceptional circumstances, warranting the Commission to
exercise its discretion to make an order for costs against Mr De Giusti. To make good this
proposition, NSW Trains set out the relevant extracts from the s 596 Decision and the s 399A
Decision:
‘2.2.4 In its s 596 decision, the Commission made the following relevant comments
regarding Mr De Giusti’s conduct following the filing of his unfair dismissal
application:
[2018] FWC 1843
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“[1] Mr Dino De Giusti (the ‘applicant’) was dismissed from his employment
as a Passenger Service Supervisor by NSW Trains (the ‘respondent’) on 7
April 2017. His dismissal for alleged serious misconduct followed an
investigation of nine allegations - the majority of which concerned the alleged
sexual harassment or inappropriate conduct towards a number of female
colleagues and the travelling public. An investigation concluded that all of the
allegations were substantiated. On 21 April 2017, Mr De Giusti filed with the
Fair Work Commission (the ‘Commission’) an application for an unfair
dismissal remedy, pursuant to s 394 of the Fair Work Act 2009 (Cth) (the
‘Act’); namely that NSW Trains’ decision to dismiss him be ‘overturned’ and
he be reinstated to his former position.
[2] This matter has had some history. The application was originally allocated
to Commissioner Johns. At two earlier listings of the matter for
mention/directions (11 July and 26 July 2017), there was no appearance, for or
on behalf of the applicant at this conference. On 14 July 2017, the Rail Tram
and Bus Union (the ‘Union’) filed a notice of representative ceasing to act for
the applicant. At the second listing (26 July 2017), NSW Trains made an
application to have the application dismissed under s 399A(2) of the Act, for
want of prosecution. This application was withdrawn after the Commissioner
was alerted to problems with the notice of listing being received by the
applicant.
[3] The matter was remitted to me in early September 2017 and listed for
hearing on 27 October 2017. In accordance with my usual practice, I also listed
a conference with the parties on 25 September 2017. There was no appearance
for, or on behalf of the applicant. On 27 September 2017, NSW Trains filed a
further application seeking the dismissal of the unfair dismissal application
under s 399(1)(b) of the Act. That application was listed for mention/directions
on 5 October 2017 and all the extant directions were dissolved. The applicant
was also directed to provide an explanation for his non-attendance at the
conference on 26 September 2017. On 3 October 2017, Ms Nash, the
applicant’s partner, advised that she had been unwell prior to the listing and
had been in hospital when my Associate phoned the applicant for the
conference on 25 September 2017.
[4] At the conference on 5 October 2017, the applicant objected to NSW Trains
being represented by a lawyer. Directions were issued seeking submissions as
to why permission should be granted for NSW Trains to be represented by a
lawyer, pursuant to s 596 of the Act. The directions required the applicant to
file his submission by 19 October 2017 (NSW Trains had filed its submissions
on 11 October 2017).
[5] On 26 October 2017, I had cause to direct the following email be sent to the
applicant:
“Dear Mr De Giusti
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…
His Honour notes that you have not complied with the direction to file
and serve submissions by COB 19 October 2017 as to your objection to
NSW Trains being represented by a lawyer in your unfair dismissal case.
Unless you provide a submission by COB Monday 30 October 2017,
His Honour will proceed to determine the application by NSW Trains
to be represented by a lawyer on the basis of NSW Trains’ submissions
an the material already filed by both parties.
You are reminded that a continuing pattern of non-compliance with the
Commission’s directions, may result in your unfair dismissal
application being dismissed. …”
[6] Ms Nash sent my Chambers an email at 4.50pm on 30 October 2017 stating
that the material was almost complete, but not ready to be filed. Although she
did not specifically explain what the cause of the delay had been, she said it
was as a result of a ‘number of circumstances, situations and unexpected
issues’ beyond their control. She said the submissions would be filed the
following morning, Tuesday 31 October 2017. At 9.29am the following
morning, Ms Nash emailed my Chambers a document with several pages of
text. However, it was in an ineligible font ‘Wingdings’. Once the text had been
converted to a legible font, it was apparent the document was a totally
irrelevant academic essay entitled, ‘The Cutting Edge: Educational Innovation,
Disability Law, and Civil Rights’ by E Moore and P Grossman of the
University of Colorado and United States Department of Education
respectively. At 9.55am that morning, my Associate emailed Ms Nash asking
whether that was the document she intended to file. She responded the
following day at 4.13pm advising that she did not know how that material had
been filed and that she would try to send the relevant material the following
day (2 November 2017). To date, no further material has been provided.”
2.2.5 In the s 399 decision, the Commission made the following further comments
regarding Mr De Giusti’s conduct subsequent to the s 596 decision:
“[2] On 10 November 2017, the Commission listed the matter for mention
and/or directions. There was no appearance for, or on behalf of, the applicant.
Attempts at calling him (which had been successful on 5 October 2017) were
unsuccessful and it seemed the phone number previously advised by the
applicant had been disconnected. As I was satisfied that the applicant was
aware of this listing through email advice, it is regrettable that if the phone
number had been disconnected, the Commission was not informed, nor
alternative arrangements made. On that occasion, NSW Trains was represented
by a solicitor, Mr A Battagello, and Mr P Thompson.
[3] On 13 November 2017, the Commission issued the following direction by
email to the parties:
[2018] FWC 1843
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‘The applicant, Mr Dino De Giusti, is to file in the Commission and serve
on the respondent, an outline of submissions, witness statements (if any)
and any other documentary evidence on which he seeks to rely in
opposition to respondent’s application, pursuant to s 399A of the Fair
Work Act 2009 and filed in 27 September 2017, for the Commission to
dismiss the applicant’s substantive unfair dismissal application by no
later than 4.00pm on Monday, 27 November 2017.’
This direction was not complied with. There have been no communication
from the applicant or his representative, Ms Nash, since 1 November 2017,
when she explained in respect to the nonsense email sent on 30 October 2017
that it was the wrong document and she would send the correct one the
following day. Nothing was sent; see: para [6] quoted in para [1] above.
[4] On 28 November 2017, Mr Battagello sent the following email to Chambers:
‘Dear Associate
We refer to the telephone mention/directions before his Honour on 10
November 2017. The Applicant failed to attend those directions by
phone, despite his Honour being satisfied that the Applicant had been
made aware of the listing.
Subsequent to this mention, his Honour made the attached Order,
requiring the Applicant to file and serve any material in response to the
Respondent’s s 399A application filed 27 September 2017 by 4:00 pm,
27 November 2017. No such material has been received by the
Respondent.
In light of the Applicant’s further failures to attend directions and comply
with the Commission’s orders, the Respondent respectfully requests that
his Honour now determine this matter on the papers on the material
before him. For your assistance, we attach a copy of the Respondent’s s
399A application as previously filed.’
[5] In light of the above narrative, I have decided to dismiss this application for
want of prosecution and a failure to comply with the Commission’s
directions…
…
[8] That said, s 587 of the Act does not limit the grounds on which the
Commission, of its own motion, may dismiss an application. In the present
case, the applicant has demonstrated a persistent unwillingness to properly
engage with the Commission in respect to his application. Despite an earlier,
unsuccessful s 399A application, where the applicant was given the benefit of
the doubt as to incorrect email addresses, he continues to ignore the
Commission’s directions and has now failed on two occasions to file any
material or submissions in respect to the earlier s 596 application by the
[2018] FWC 1843
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respondent, and more lately, its s 399A application. The applicant has made no
attempt to explain these failures, despite being warned of the possible
consequences. Given this history, I have little confidence that the applicant
will, at some future point, seek to desist from this conduct.
…
[10] In my view, it is unfair and unreasonable that the respondent should be put
to more time and cost in defending a matter which is not properly, or at all,
being prosecuted by the applicant.’
[6] NSW Trains submitted that from Mr De Giusti’s unfair dismissal application and
NSW Trains F3 employer response to his application, it should have been reasonably apparent
to Mr De Giusti that his application had no reasonable prospects of success, pursuant to
s 611(2)(b) of the Act; see Baker v Salva Resources Pty Ltd [2011] FWCFB 4014.
[7] It was said that at the time of making his application Mr De Giusti had available to
him a ‘final decision’ letter in which it was made perfectly clear that serious allegations
against him had been substantiated. These were:
(a) ‘engaged in inappropriate conduct of a sexual nature towards his co-workers
(allegations 1, 2, 3, 4 and 7);
(b) engaged in inappropriate conduct of a sexual nature towards members of the
travelling public (allegations 6 and 8);
(c) facilitated the unaccompanied departure of a female passenger at an unscheduled,
unmanned stop in the middle of the night between Coffs Harbour and Grafton
Stations (allegation 5); and
(d) allowed Ms Fiona Nash to travel unaccompanied and unsupervised in the luggage
brake van (containing passenger luggage) of a train service on several occasions
(allegation 9).’
[8] It was pointed out that rather than denying the allegations, Mr De Giusti sought to
argue that NSW Trains investigation was procedurally unfair, due to a number of entirely
irrelevant factors to the question of whether the conduct had occurred. These included:
1. ‘Ongoing police investigation and advised by legal representative not to respond
until police investigation finalised.
2. Being treated for anxiety and depression.
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3. Medication given by treating doctors caused side effects eg drowsiness, memory
lapses and unable to remember dates and incidents.
4. Medical certificates provided to NSW Trainlink advising not fit for work and
requested investigation to be put on hold until Mr De Giusti was well enough to
clearly respond to allegations.
5. NSW Trainlink continued with the investigation when Mr De Giusti was unable to
respond to the allegations.’
[9] NSW Trains submitted that Mr De Giusti’s failure to rebut the substance of the very
serious allegations against him, and about which he was well aware, rendered his application
manifestly untenable, or so lacking in merit, as to have no reasonable prospects of success and
this would have been reasonably apparent to him.
[10] Further, NSW Trains submitted that it had established exceptional circumstances
which would warrant the Commission exercising its discretion to award costs because of a
number of unreasonable acts or omissions for which Mr De Giusti was solely responsible, in
connection with the conduct or continuation of the matter, under s 400A(1) of the Act, over an
eight month period. These included:
‘(a) On 11 July 2017, the Commission issued a Notice of Listing, listing the
substantive matter for Mention/Directions by telephone before Commissioner Johns
on 18 July 2017. Among those notified, the Notice was sent to Mr De Giusti’s then
representatives at the Rail Tram and Bus Union (RTBU), at the email address [address
omitted]. A copy of this Notice of Listing is attached to this application and marked
“Attachment C”.
On 14 July 2017, Mr De Giusti’s representatives at the Rail Tram and Bus Union
emailed the Commission and filed a notice of representative ceasing to act for Mr De
Giusti. Copied into this email was the address [address omitted], being the email
address subsequently used by Mr De Giusti in the substantive proceedings…
Despite the RTBU’s Notice being sent to Mr De Giusti, he failed to take the
reasonable step of contacting the Commission to make enquiries as to the next steps in
pursuing his own unfair dismissal application. Such action would have made him
aware of the telephone conference listed for 18 July 2017. On 18 July 2017, NSW
Trains incurred costs attending the telephone directions before Commissioner Johns,
which could not proceed due to Mr De Giusti’s non-attendance, owing directly from to
his unreasonable omission in failing to contact the Commission.
(b) On 18 July 2017, the Commission issued a further Notice of Listing, listing the
matter for Mention/Directions by telephone before Commissioner Johns on 26 July
2017. On this occasion, the Notice was sent directly to the postal address provided by
Mr De Giusti in his unfair dismissal application, being [address omitted]…
[2018] FWC 1843
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Despite the Notice being sent to the address provided in his own application, and
Mr De Giusti being aware since 14 July 2017 that he would now be required to take
steps personally to prosecute his claim, no attempt was made by Mr De Giusti to
contact the Commission regarding the status of his application. On 26 July 2017, NSW
Trains incurred costs attending further telephone directions before Commissioner
Johns, which could not proceed due to Mr De Giusti’s non-attendance, again owing
directly to his failure to contact the Commission regarding his own application.
(c) On 4 August 2017, the Commission issued directions requiring Mr De Giusti to file
and serve an outline of argument and evidence by 24 August 2017. Direction 5
required that any request for an extension of time to file material must be made prior
to the compliance date...
No outline of argument or evidence was served by Mr De Giusti by 24 August 2017,
nor was any request for an extension of time to file made prior to the compliance date.
On 28 August 2017, after the date for filing and/or requesting an extension had passed,
Ms Fiona Nash emailed the Commission on behalf of Mr De Giusti from the address
[address omitted] seeking an extension for the filing of evidence. Ms Nash indicated
that her own ill health had been the cause of Mr De Giusti’s failure to meet the
deadline of 24 August 2017, but provided nothing by way of medical evidence to
allow the Commission to assess this claim.
On 28 August 2017, NSW trains incurred costs as a result of needing to:
Consider Mr De Giusti’s request for an extension and amendment to the pre-
existing timetable caused by his unreasonable failure to file material or seek
an extension in accordance with the Commission’s directions of 4 August
2017;
Assess the availability of NSW Trains’ representatives in light of the
timetable amendment which would now be required; and
Instruct its representatives to respond to the Commission regarding Mr De
Giusti’s request for an extension of time.
(d) On 7 September 2017, the Commission issued fresh directions for the filing and
service of evidence. These directions required NSW Trains to file its material (outline
of submissions, witness statements and any documentary evidence on which NSW
Trains sought to rely) prior to Mr De Giusti, by 4:00 pm, 28 September 2017…
On 12 September 2017, NSW trains’ representatives sent an email addressed to Mr De
Giusti to [address omitted], seeking a response to a number of questions to allow NSW
Trains to better understand the nature of Mr De Giusti’s claim. In particular, Mr De
Giusti has not made clear in his unfair dismissal application whether he denied the
conduct alleged, or admitted the conduct alleged with the qualifier that procedural
factors rendered the dismissal unfair. Clarification on these matters was crucial, given
NSW trains was now required to file its material first in accordance with the directions
of 7 September 2017, as it directly affected what evidence NSW trains would be
required to prepare, file and serve in the matter, and by extension the costs that would
be incurred in doing so…
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Mr De Giusi never responded to the email from NSW trains’ representatives on 12
September 2017. As a result, NSW Trains was required to prepare its case on the basis
that all factual elements of the allegations would be contested by Mr De Giusti, despite
him never making this point clear.
As a result of Mr De Giusti’s unreasonable act in failing to clarify the basis of his
claim, NSW Trains incurred costs as a result of all its representatives being required to
contact, interview and prepare draft witness statements for 10 witnesses in support of
NSW Trains’ case.
(e) On 11 September 2017, a Notice of Listing was issued, listing the matter for
conference before Deputy President Sams on 25 September 2017. A copy of the notice
was sent to [address omitted]…
On 25 September 2017, NSW Trains incurred costs a result of its representatives
attending the Mention/Directions before Deputy president Sams, which could not
proceed due to Mr De Giusti’s non-attendance, in circumstances where the Notice was
sent to the email address in use by him.
(f) On 5 October 2017, the Commission issued Directions requiring that Mr De Giusti
file and serve submissions by 19 October 2017 as to why NSW Trains’ request to be
legally represented should be refused….
No submissions were filed by Mr De Giusti on 19 October 2017. On 23 October 2017,
NSW trains incurred costs as a result of Mr De Giusti’s unreasonable failure to file
any submissions, by emailing the Commission to provide an update as to the status of
the matter…
(g) On 31 October 2017, Ms Nash on behalf of Mr De Giusti, filed a document said to
be Mr De Guisti’s response to NSW Trains’s 596 application. The document was
several pages of ineligible font “Wingdings”…
On 31 October 2017, NSW Trains incurred costs scanning the ultimately irrelevant
document filed by Ms Nash.
(h) On 8 November 2017, the Commission issued a Notice of Listing, listing the
matter for Mention/Directions by telephone before Deputy President Sams on 10
November 2017. A copy of this Notice was sent to the email [address omitted]….
On 10 November 2017, NSW Trains incurred costs as a result of attending the
Mention/Directions by telephone before Deputy President Sams, which could not
proceed due to Mr De Giusti’s non-attendance, in circumstances where the Notice was
sent to the email address in use by him.
(i) On 13 November 2017, the Commission issued Directions requiring Mr De Giusti
to file and serve an outline of submissions, witness statements, and any other evidence
in response to NSW Trains s 399A application by 4:00 pm on 27 November 2017…
No material was filed by Mr De Giusti on 27 November 2017, nor was any
explanation provided as to reason for this failure. As a result of this unreasonable
[2018] FWC 1843
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failure, NSW Trains incurred costs due to the need to email the Commission on
28 November 2017 regarding the status of the matter…’
[11] Finally, NSW Trains submitted as follows:
‘Mr De Giusti is squarely responsible for substantive unreasonable acts or omissions
in this matter. Mr De Giusti repeatedly failed to attend conferences, mentions and
directions before the Commission and always failed to provide a reason or explanation
for non-attendance prior to doing so, if ever. Mr De Giusti repeatedly failed to lodge
materials in accordance with the directions of the Commission, despite being provided
extensions allowing him to do so. Such conduct has previously been regarded by the
Commission as justifying an order for costs pursuant to s400A (Gary Hathaway v Visy
Primary Packaging T/A Visy Industries Australia Pty Ltd [2015] FWC 8801). NSW
Trains has incurred significant costs as a result of these failures by Mr De Giusti and
has been required to see this matter to conclusion with effectively no indication from
Mr De Giusti that he had any interest in seriously prosecuting his claim. Such
circumstances justify the Commission exercising its discretion to make an order
pursuant to s 400A of the FW Act.’
[12] NSW Trains provided an itemised Schedule of Costs totalling $25,849.30, plus GST
based, where relevant, on the Commission’s Schedule 3.1 of the Fair Work Regulations 2009.
CONSIDERATION
Commission’s power to award costs and relevant principles
[13] This costs application is brought under both s 400A and 611 of the Act. Section 400A
expressly relates to unfair dismissal matters. It reads:
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.
[14] The Commission’s general powers to award costs are grounded in s 611 of the Act
which reads:
[2018] FWC 1843
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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).
[15] The starting point in relation to costs of proceedings before the Commission is that
each person involved in a matter, must bear their own costs; often known as the ‘general rule’.
This statutory imperative is derived from the policy purpose that a person is entitled to make,
or defend an application made under the Act, without the risk that a costs order may be made
against them.
[16] As mentioned, s 611 of the Act sets out the general rule, but sub section (2) makes
obvious that there are exceptions to that rule in certain circumstances; see: Explanatory
Memorandum to the Fair Work Bill 2008 paras [2353]-[2356]. Those circumstances arise if
the Commission is satisfied that:
(a) a person made an application, or responded to an application vexatiously or
without reasonable cause; or
(b) it should have been reasonably apparent to a person that their application or a
person who responded to an application had no reasonable prospects of success.
[17] There is no doubt that (a) above is directed to a consideration of the circumstances
when an application is made, or responded to. Whereas satisfaction of (b) above may be
established at various points of time during the progress of a matter before the Commission,
[2018] FWC 1843
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when it becomes reasonably apparent that the person’s application, or response to the
application, has no reasonable prospects of success. It is important to note that even if one or
both of the legs of s 611 are enlivened, the Commission retains an overall discretion as to
whether an order of costs should follow.
[18] Sections 577 and 578 of the Act is also relevant and states:
577 Performance of functions etc. by the FWC
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its
functions and exercises its powers efficiently etc. (see section 581).
578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of
this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent
and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age,
physical or mental disability, marital status, family or carer's responsibilities,
pregnancy, religion, political opinion, national extraction or social origin.
[19] It follows from ss 577 and 578 that in exercising the discretion to order costs the
Commission must exercise its powers in a manner which is ‘fair and just’ and takes into
account ‘equity, good conscience and the merits of the matter’. The broad nature of these
considerations suggests that the factors which are relevant to the exercise of the discretion are
not confined.
[20] Section 611 contains no positive indication of the considerations which the
Commission must take into account in deciding how to exercise its discretion. The discretion
[2018] FWC 1843
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conferred is expressed in general, unqualified, terms. As the High Court observed
in O’Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 (‘O’Sullivan’) at [216]:
‘Where a power to decide is conferred by statute, a general discretion, confined only
by the scope and purposes of the legislation, will ordinarily be implied if the context
(including the subject matter to be decided) provides no positive indication of the
considerations by reference to which a decision is to be made.’
[21] But, of course, the discretion conferred by s 611(2) must be exercised judicially, that is
to say not arbitrarily, capriciously or so as to frustrate the legislative purpose. Further,
consistent with O’Sullivan, the discretion is also confined by the subject matter, legislative
context and purpose.
Meaning of ‘without reasonable cause’
[22] In Hamilton James and Bruce Pty Ltd v Gray [2011] FWAFB 9235, a Full Bench of
Fair Work Australia, (as the Commission was then styled), said at paras [18]-[19]:
‘[18] The phrase “without reasonable cause” was considered in Kanan v Australian
Postal and Telecommunications Union (‘Kanan’). 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)
[19] In Kanan’s case, Justice Wilcox said in respect of the phrase that:
“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] HCA 51; (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.’
[2018] FWC 1843
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In Standish v University of Tasmania [1989] FCA 166; (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.’
[23] Similarly, the Full Bench of the Commission in Church v Eastern Health t/a Eastern
Health Great Health and Wellbeing FWCFB 810 said at [30]-[33]:
‘[30] We now turn to the expression ‘without reasonable cause’. A party cannot be
said to have made an application ‘without reasonable cause’, within the meaning of
s.611(2)(a), simply because his or her argument proves unsuccessful. The test is not
whether the application might have been successful, but whether the application
should not have been made. In Kanan v Australian Postal and Telecommunications
Union., Wilcox J put it this way:
“It seems to me that one way of testing whether a proceeding is instituted
‘without reasonable cause’ is to ask whether, upon the facts apparent to the
applicant at the time of instituting the proceeding, there was no substantial
prospect of success. If success depends upon the resolution in the applicant’s
favour of one or more arguable points of law, it is inappropriate to stigmatise
the proceeding as being ‘without reasonable cause’. But where, on the
applicant’s own version of the facts, it is clear that the proceeding must fail, it
may properly be said that the proceeding lacks a reasonable cause.”
[31] In the context of an appeal the question becomes whether, having regard to the
arguments available to the appellant at the time of instituting the appeal, there was no
substantial prospect of success. As Wilcox CJ (with whom Madgwick J agreed)
observed in Imogen Pty Ltd v Sangwin:
“The prospect must be evaluated in the light of the facts of the case, the
judgment appealed from and the points taken in the notice of appeal. If having
regard to those matters, there was not insubstantial prospect of the appeal
achieving some success, albeit not necessarily complete success, then it would
seem to me it cannot be fairly described as having been instituted ‘without
reasonable cause’. This is so even if, in the result, the appeal proved
unsuccessful.”
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[32] In the same matter Ryan J said:
“The existence of ‘‘reasonable cause’’ within the meaning of s 347 falls to be
determined at the time when the relevant proceedings were instituted. The fact
that the party instituting the proceedings later discontinues them is therefore
not a matter to be taken directly into account in the application of the section.
However, an appeal stands in somewhat different case from proceedings at first
instance in that discontinuance may bear indirectly on the discretion conferred
by s 347 by tending to confirm an impression derived from the grounds of
appeal and the reasons for judgment below that the prospects of success on the
appeal were slight.
Not without significance to an assessment of the reasonableness of the
institution of an appeal are the amount at issue and the nature of the points
raised by the notice of appeal. Where, as here, the appeal is essentially against
findings of fact made by the trial judge after a two day hearing resulting in a
judgment for $16,900 and raises no important or distinctive point of law or
principle, the Court may more readily conclude that it was not reasonable in the
circumstances to have instituted it. On a fairly fine balance of the relevant
considerations and not without hesitation, I have been led to reach that
conclusion in this case and agree with the Chief Justice and the orders which he
has proposed.”
[33] In construing s.570 and its legislative antecedents courts have observed that the
test imposed by the expression ‘without reasonable cause’ is similar to that adopted for
summary judgement, that is ‘so obviously untenable that it cannot possibly succeed’,
‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot
succeed.’ [citations removed]
[24] For completeness, I refer to the final two paragraphs in Kanan, where Wilcox J said:
‘29. 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. That is the situation in the present case. The qualification of s.347
applies. The Court has power to order costs against the applicant.
30. I see no discretionary reason to withhold such an order. It is not a matter of the
applicant's motives but, rather, that he has put the respondent to the expense of
resisting a claim which was always doomed to failure. There is no question of
punishing the applicant for his unreasonable course of action. The rationale for making
a costs order is that a measure of indemnity should be conferred upon the respondent
for the costs it has been obliged to incur in responding to the unreasonably instituted
proceeding. I propose to order that the principal proceeding be dismissed with costs.
[2018] FWC 1843
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The costs of the motion will be costs in the principal proceeding and so covered by
that order.’
Meaning of ‘no reasonable prospects of success’
[25] The High Court in Spencer v Commonwealth of Australia (2010) 241 CLR 118
considered the meaning of the phrase ‘no reasonable prospects of success’, albeit in the
context of s 31A of the Federal Circuit Court of Australia Act 1976. The plurality (Hayne,
Crennan, Kiefel and Bell JJ) said:
‘59 In many cases where a plaintiff has no reasonable prospect of prosecuting a
proceeding, the proceeding could be described (with or without the addition of
intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous",
"untenable", "groundless" or "faulty". But none of those expressions (alone or in
combination) should be understood as providing a sufficient chart of the metes and
bounds of the power given by s 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.
60 Rather, full weight must be given to the expression as a whole. The Federal Court
may exercise power under s 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, to other generally expressed statutory
phrases, such as the phrase "just and equitable" when it is used to identify a ground for
winding up 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 purpose revealed by the text of the provision will be defeated if its
application is read as confined to cases of a kind which fell within earlier, different,
procedural regimes.’
[26] In Baker v Salva Resources Pty Ltd [2011] FWAFB 4014, the Full Bench said at [10]:
‘[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and
“had no reasonable prospect of success” have been well traversed:
“should have been reasonably apparent” must be objectively determined. It
imports an objective test, directed to a belief formed on an objective basis,
rather than a subjective test; and
a conclusion that an application “had no reasonable prospect of success”
should only be reached with extreme caution in circumstances where the
application is manifestly untenable or groundless or so lacking in merit or
substance as to be not reasonably arguable.’
See also: Qantas Airways Ltd v Cater [2013] FWCFB 1811.
[2018] FWC 1843
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[27] In practical terms, a person may gain knowledge in the lead up to proceedings (when
the opposing party’s evidence is filed) or during the proceedings (e.g. after the cross
examination of a crucial witness) which, when viewed objectively, would satisfy the test of
the person’s case having no reasonable prospects of success. It would be from that point that
costs may be awarded, if the person did not take steps to recognise that their case was
frivolous, untenable, groundless or faulty. For an applicant, this may mean discontinuing the
matter and for a respondent it may mean making offers to settle a matter.
[28] It is telling, I think, that the Union (the RBTU), which had filed Mr De Giusti’s
original unfair dismissal application on 21 April 2017, filed a Notice of Representative
Ceasing to Act on 14 July 2017. This was shortly after there was a telephone conciliation of
the application on 20 June 2017 and a few days before the first listing of the matter for
directions before Commissioner Johns on 18 July 2017 (at which Mr De Giusti did not
appear). It can safely be assumed that the Union was fully aware of the seriousness of the
allegations found to have been substantiated against Mr De Giusti and had received
instructions from him before, and after the filing of the application.
[29] That said, the RTBU has a long and proud history of defending its members interests,
particularly in disciplinary matters, including in unfair dismissal cases, even when they are in
the wrong. In my experience, this Union (like many others) has an honourable and practical
policy of not wasting Union resources and spending members’ money on defending the
indefensible.
[30] Given that Mr De Giusti had been a long standing employee (42 years of service) and
may have been a Union member for a considerable period of time, there must have been a
very good reason why the Union decided to cease representing him before formal
Commission proceedings even commenced. While I have no evidence as to the reason/s, in
my view, a reasonable inference to draw was that the union considered Mr De Giusti’s case to
be one with little, or no prospects of success. While these assumptions are, of course,
speculative and therefore not determinative of whether this costs application should be
granted, I consider this matter to be background to the larger picture painted by NSW Trains
in its submissions on the costs application.
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[31] Section 400A of the Act was passed by the Federal Parliament as part of a package of
amendments to the Act in 2013. The statutory purpose of the amendment was plainly set out
in the Explanatory Memorandum to the Fair Work Act Amendment Bill 2012 at Item 171
where it said:
‘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.’
[32] In my view, this application is one of the rare and exceptional examples of cases
contemplated by s 400A of the Act in which there should be a departure from the ‘general
rule’, that parties to proceedings under the Act, should pay their own costs.
[33] I make this finding based on three primary bases:
1. Mr De Giusti has made no submissions and put no evidence opposing NSW Trains’
costs application;
2. At no time, including in the unfair dismissal application itself, has Mr De Giusti
denied the very serious allegations against him; and
3. Over an eight month period since filing his unfair dismissal application, there have
been numerous acts and omissions by Mr De Giusti , including failures to comply with
directions, which would satisfy the conditions precedent in s 400A(1) of the Act.
[34] I will develop each of these bases in turn.
Mr De Giusti has made no submissions and put no evidence opposing NSW Trains costs
application.
[35] There is no doubt that Mr De Giusti and/or his partner, Ms Nash were aware of this
costs application and received a copy of NSW Trains application on 21 December 2017. It
was sent to the email address they had both previously used when communicating with the
Commission. There was no evidence Mr De Guisti and/or Ms Nash had not received the costs
application.
[2018] FWC 1843
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[36] There was no appearance for, or on behalf of Mr De Giusti at the mention and
directions for the costs application on 16 January 2018. There was no explanation for
Mr De Giusti’s non-attendance. Indeed, there has been no communication, at all, from
Mr De Giusti or Ms Nash with the Commission since 1 November 2017.
[37] For abundant caution I issued further directions on 16 January 2018, the gist of which
was to provide Mr De Giusti with an opportunity to file and serve any submissions and/or
evidence in opposition to the costs application. Nothing was filed (and has not been since).
Given the history of the matter, Mr De Giusti was expressly warned of the consequences of
failing to comply with my directions when he was advised:
‘The applicant is advised that should he fail to comply with the directions, the
respondent’s application for costs will be determined based on the material already
filed in the Commission and without further recourse to him.’
[38] Regrettably, this dilatory conduct is entirely consistent with Mr De Giusti’s approach
to these proceedings, including when in July 2017, he was given the benefit of the doubt as to
a computer problem for not attending the telephone conference convened by Commissioner
Johns.
[39] It is unclear why Mr De Giusti has failed to prosecute his claim with due diligence
(resulting in its dismissal, pursuant to s 399A of the Act) or respond to a costs application
which must have serious financial implications for him. Prima facie, Mr De Giusti’s further
failure to again comply with directions of the Commission and not attend Commission
directed proceedings, without any explanation for not doing so, is a sufficient basis for the
Commission to conclude that these were ‘unreasonable acts or omissions’ in respect to this
matter, such as to warrant an exercise of the Commission’s discretion to award costs.
[40] Mr De Giusti has been provided with all reasonable opportunities to oppose this
application and has failed to do so. The Commission can do no more than afford him with that
opportunity. It cannot force him to take up that opportunity. As Kirby J said in Allesch v
Maunz (2000) 173 ALR 648 at [35] to [39]:
‘It is a principle of justice that a decision-maker, at least one exercising public power,
must ordinarily afford a person whose interests may be adversely affected by a
[2018] FWC 1843
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decision an opportunity to present material information and submissions relevant to
such a decision before it is made.’
…
…it is worth emphasising that the principle just described does not require that the
decision-maker actually hear (or receive the submissions of) the party potentially
liable to be adversely affected. Sometimes, through stubbornness, confusion,
misunderstanding, fear or other emotions, a party may not take advantage of the
opportunity to be heard, although such opportunity is provided. Affording the
opportunity is all that the law and principle require.
Decision-makers, including the courts, cannot generally force people to protect their
own rights, to adduce evidence or other materials, to present submissions or to act
rationally in their own best interests.’
At no time, including in the unfair dismissal application itself, has Mr De Giusti denied
the very serious allegations against him.
[41] It would be difficult to imagine more profoundly serious allegations against an
employee which would justify summary dismissal for gross misconduct, than those that were
found by NSW Trains to have been substantiated against Mr De Giusti. This was not some
‘one off’ explicable incident; it involved a number of similar incidents of appalling and
offensive conduct against female work colleagues and customers of NSW Trains over a three
year period between 2013 and 2016. At least one of these persons filed a Police complaint,
although I am not aware of any criminal charges having been laid against Mr De Giusti, or if
he was ever convicted.
[42] All of those persons named in the allegations had prepared witness statements and
were presumably willing to give evidence in open court and be subject to cross examination.
In this context, Mr De Giusti has never denied the conduct or that the incidents occurred, even
in his unfair dismissal application. Rather, he raises a number of procedural unfairness issues
and a medical reason for not remembering past events. I should observe that the Commission
has never been provided with such medical evidence. In any event, even if there was some
procedural deficiencies in the investigatory or disciplinary process (which I very much doubt),
or any mitigating factors going to the ‘harshness’ of the dismissal (which I also doubt), it is
difficult to comprehend how these factors would be sufficient, either singularly or in
combination, to outweigh the gravely serious allegations Mr De Giusti has never denied.
[2018] FWC 1843
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[43] In my view, any reasonable objective bystander, in the face of all the relevant
background, would conclude that Mr De Giusti’s prospects of success with his unfair
dismissal application were hopeless, manifestly untenable and without any merit. This is a
conclusion I agree with.
Over an eight month period since filing his unfair dismissal application there have been
numerous acts and omissions by Mr De Giusti , including failures to comply with
directions which would satisfy the conditions precedent in s 400A(1) of the Act.
[44] At paragraph [10] of this decision, I set out NSW Trains list of acts or omissions, on
behalf of Mr De Giusti, which is said to justify the exercise of the Commission’s discretion to
award costs against him, pursuant to s 400A.
[45] There was no contradictor to this chronology of events. In any event, to my mind, the
chronology was not able to be disputed. It was a statement of facts. Nevertheless, I agree with
the conclusions NSW Trains asked the Commission to draw from these events, in the context
of a costs application.
[46] For the reasons herein expressed, I am satisfied that this case fits neatly within the
rubric contemplated by ss 400A(1) and 611(2)(a) and (b) of the Act. It is one of those rare
cases, identified by the Parliament, as justifying a costs order in the Commission’s unfair
dismissal jurisdiction.
[47] Accordingly, NSW Trains costs application is granted. The Schedule of Costs
included in the application shall be referred to the Commission’s internal processes for
assessment and final orders.
ORK WORK COMMISSION FAIR THE SEAL OF
[2018] FWC 1843
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DEPUTY PRESIDENT
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PR601590
