1
Fair Work Act 2009
s.604—Appeal of decision
Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga
v
Lorraine Roche
(C2019/3079)
DEPUTY PRESIDENT GOSTENCNIK
DEPUTY PRESIDENT MASSON
COMMISSIONER MCKINNON
MELBOURNE, 24 JULY 2019
Appeal against decision [2019] FWC 2768 of Deputy President Dean at Sydney on 24 April
2019 in matter number U2017/13136 – costs – appealable error identified – public interest
enlivened – appeal upheld – decision to order costs quashed – part of s.400A(1) application
dismissed – remainder of costs application remitted for rehearing.
Introduction
[1] Ms Lorraine Roche (Respondent) commenced employment with the Catholic Schools
Office Wagga Wagga (CSO) on or about 23 April 2012. The Respondent had held the
position of School Support Officer at St Patrick’s Primary School in Griffith, New South
Wales, from May 2013 until her dismissal on 22 November 2017. Her employer was the
Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga (Appellant). Her
dismissal followed an investigation into an incident that occurred on 17 August 2017
involving the Respondent and another staff member of the School. The Respondent applied
for an unfair dismissal remedy by application to the Fair Work Commission (Commission)
under s.394 of the Fair Work Act 2009 (Act). The application was lodged on 11 December
2017.
[2] The Respondent succeeded in her application, with Deputy President Dean
determining on 14 August 2018 that the Respondent’s dismissal was unfair and ordering the
Respondent’s reinstatement, continuity of employment, and payment of wages between the
date of dismissal and the reinstatement.1
[3] The Respondent applied for an order for costs on 28 August 2018 under both
ss.400A(1) and 611(2)(b) of the Act. Section 400A(1) allows the Commission to order costs
against a party to a matter relating to an unfair dismissal remedy application if it is satisfied
that because of an unreasonable act or omission by the party in connection with the conduct or
continuation of the matter, that party caused costs to be incurred by the other party. Section
611(2)(b) allows the Commission to order a party to bear some or all of the costs of another
1 Lorraine Roche v Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga [2018] FWC 3933 at [172],
[178]-[179]
[2019] FWCFB 4684
DECISION
E AUSTRALIA FairWork Commission
[2019] FWCFB 4684
2
party in relation to an application before the Commission if it is satisfied that it should have
been reasonably apparent to the first mentioned party that its application, or its response to the
application, had no reasonable prospects of success.
[4] The Deputy President determined the Respondent’s costs application in her favour
pursuant to s.400A(1), by a decision published on 24 April 20192 (Decision). The quantum of
the costs order is yet to be determined. The Deputy President did not deal with the application
under s.611(2)(b) given her decision under s.400A(1). It is from that decision that the
Appellant seeks permission to appeal and appeals.
The Decision
[5] After setting out some detail as to the nature of the application for costs, some relevant
background matters and summary of relevant evidence and submissions made by the parties
in relation to the application for costs, the Deputy President begins her consideration of the
s.400A(1) aspect of the application with a recitation of some relevant principles. Thereafter,
the Deputy President’s reasoning underpinning her conclusion is set out in the following
paragraphs of the Decision:
“[35] Having considered the evidence and submissions of the parties, I am satisfied that
the CSO’s failure to agree to terms of settlement in the form of the Second Offer was
unreasonable.
[36] While there were some matters which may have supported a view by the CSO
that dismissal was appropriate at the time Ms Roche was dismissed, such as the report
of the workplace investigator (the Tawfiq Report) and the report of the NSW Police,
the CSO could not reasonably have continued to hold the view that Ms Roche’s
dismissal was justified, or that it could defend an order for reinstatement, after the first
two days of hearing. In particular, at the time of the expiration of the Second Offer, it
ought to have been clear to the CSO that there were significant risks in continuing to
defend the application. In this regard, I accept the submissions made on behalf of Ms
Roche.
[37] I do not accept the CSO’s argument that it would have placed itself in breach of
its duty under the WHS Act if it were to reinstate Ms Roche because it alleged Ms
Roche was the cause, or part of the cause, of Ms Culla’s psychological injury. First,
Ms Culla had resigned prior to Ms Roche’s dismissal. Second, the evidence given
prior to the expiration of the Second Offer made it clear that Ms Culla was the
principal cause of the difficulties experienced within the office, and that she was
emotionally volatile and unpredictable.
[38] The CSO did not call Ms Campbell, a key witness, to give evidence. She gave
evidence in response to an order to attend and give evidence which was sought by Ms
Roche. Both Ms Campbell and Mr Morrell had given evidence that was favourable to
Ms Roche, including that Ms Campbell considered Ms Roche to be an “amazing front
of house person”.
2 [2019] FWC 2768
[2019] FWCFB 4684
3
[39] The primary remedy in relation to unfair dismissal is reinstatement. Clearly, Ms
Roche placed great value on her role with the CSO and at no point did she resile from
her stated desire to return to her position. Her willingness to spend a significant
amount of money (more than one year of her annual salary) on legal fees towards
obtaining reinstatement, and her willingness to forgo backpay in both of her offers to
settle, also made it evident that Ms Roche was completely focussed on reinstatement.
[40] The offers put to Ms Roche by the CSO on 21 February and 24 April were both
principally of a financial nature. In light of Ms Roche’s very clear desire to be
reinstated, I do not consider these offers reasonable in the circumstances. At the time
the second financial offer was made by the CSO, their prospects of success were
obviously and significantly diminished. The significantly increased monetary sum the
CSO offered at this time supports a view that the CSO recognised their diminished
prospects of success in defending the application.
[41] In addition, the CSO was represented by experienced Counsel throughout the
proceedings, and was put on notice that Ms Roche would seek costs upon the CSO
failing to obtain a more favourable result than the Second Offer.
[42] I am not satisfied that the CSO’s conduct prior to the expiration of the First Offer
was unreasonable. At the time of the expiration of the First Offer, the hearing had not
commenced and the evidence referred to above had not been given. There is no basis
for me to conclude that its conduct prior to the expiration of the First Offer was
unreasonable in the manner required by s 400A.
[43] I am satisfied that the actions by the CSO in continuing to defend the application
and refusing to accept the Second Offer, were unreasonable from the time of, and
subsequent to, the Second Offer expiring, and that Ms Roche incurred costs as a result
of those actions.
[44] Taking into account the principles guided by the authorities cited, and having
considered the facts and circumstances of the present matter, I am persuaded that,
when viewed objectively, it is appropriate to exercise my discretion and award Ms
Roche her costs on a party/party basis from 4pm on 20 April 2018, being the
expiration of the Second Offer.”3 [Endnote omitted]
[6] As is evident from the extracted paragraphs, the Deputy President reasoned that the
relevant act or omission in which the Appellant engaged, and which caused the Respondent to
incur costs, was the Appellant’s “failure to agree to the terms of settlement in the form of the
Second Offer.”4 The Deputy President also concluded that continuing to defend the
application after rejecting the Second Offer was an unreasonable act.5 The “Second Offer”
was made on 3 April 2018 and lapsed at 4:00pm on 20 April 2018. That offer was to settle the
application on the basis, inter-alia, that the Respondent be reinstated in the role of Assistant
to the Principal or School Support Officer at one of three identified schools operated by the
Appellant but without payment for wages between the date of dismissal and the reinstatement.
3 Ibid at [35]-[44]
4 Ibid at [35], [43]
5 Ibid at [43]
[2019] FWCFB 4684
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[7] At [36] of the Decision, the Deputy President explains why in her view the failure by
the Appellant to accept the Second Offer was unreasonable. In so doing the Deputy President
accepts the submissions made on behalf of the Respondent. Although it is not entirely clear
which submissions were being accepted, the Respondent made a number of submissions
related to the “Second Offer” and the failure to accept as an unreasonable act or omission
causing her to incur costs. These submissions were summarised by the Deputy President at
[16] of the Decision as follows:
“[16] It was submitted in the alternative that Ms Roche should be awarded costs from
the time the Second Offer lapsed. In that regard, Ms Roche relied on the following
matters:
Prior to the Second Offer lapsing, the parties had attended two days of
hearing in Wagga Wagga. After hearing the opening submissions of Ms
Roche’s case, the CSO should have known about the legal risks that it
would face if the matter went on to be determined;
Evidence had been given that Ms Culla was the principal cause for the
breakdown of working relationships within the front office of St
Patrick’s Primary School (including between Ms Campbell and Ms
Culla) and that Ms Culla was emotionally volatile and unpredictable;
Evidence had been given by Ms Campbell and Mr Morrell which was
favourable to reinstatement of Ms Roche into her former position;
Evidence given by Mr Bowyer in cross examination revealed that his
reasons for decision were not quite as set out in the letter to Ms Roche,
and to the extent that he relied on Mr Tawfiq’s investigation report, the
report was affected by serious flaws and was unreliable;
Evidence yet to be given by the remaining witnesses (Mr Bowyer, Ms
Delaney, Ms Price and Mr Tawfiq) was unlikely to assist the CSO and
to the contrary, its case would be further weakened by the cross-
examination of its remaining witnesses;
Ms Roche made a genuine and significant compromise in the Second
Offer in offering to release the CSO from a potential claim for a five
month period of lost wages and a potential claim for legal costs;
The CSO was placed on notice that the Second Offer was made in the
form of a Calderbank offer and that Ms Roche would seek costs upon
the CSO failing to obtain a more favourable result than the Second
Offer;
The CSO was given a reasonable period of time to consider the Second
Offer;
The CSO had the benefit of advice from experienced Counsel on its
legal risks and the inference must be drawn that the CSO had made a
[2019] FWCFB 4684
5
conscious decision to reject the Second Offer and take on the risk of a
reinstatement order;
It should have been apparent to the CSO by this time that Ms Roche
would be reinstated;
“A deliberate decision to refuse a reasonable offer of settlement is a
factor which would normally weigh more heavily in favour of a finding
of unreasonable action than would a mere failure to respond by an
unrepresented litigant.” (Cugura v Frankston City Council [2012] FCA
1299 at [31]); and
The CSO’s “rejection of, or failure to accept the Second Offer and/or
failure to participate in genuine or reasonable settlement negotiations
prior to the expiry of the Second Offer was an unreasonable act or
omission within the meaning of s.400A(1) of the Act, and justifies an
order for costs at least from the date on which the Second Offer
lapsed.”6
[8] Relevant also is the Respondent’s submissions which are summarised at [30] of the
Decision:
“[30] Submissions in reply made on behalf of Ms Roche, in summary, stated:
The CSO’s submissions demonstrate that since at least 24 April 2018, it
was aware of the weakness of its position. The fact that the CSO made
an offer on 24 April which was significantly exceeded the maximum
compensation award available, justifies an inference that the CSO was
aware that it did not have reasonable prospects in resisting Ms Roche’s
unfair dismissal claim. This fortifies the submission that it was
unreasonable conduct by the CSO not to accept the Second Offer which
lapsed two days prior to its offer on 24 April.
Alternatively, the offer of 24 April 2018 indicates that the CSO was
aware at the least that it did not have reasonable prospects of success in
these proceedings. The CSO should have conceded that the dismissal
was unfair and such concession would have made it possible for the
parties to reduce the scope of the proceedings to the question of remedy
only, which would have saved considerable time and expense.
Further, had the CSO confronted the weakness of its position, the
proceedings in the period between 21 and 23 May 2018 would have
been reduced to one hearing day, given much of the cross examination
of the CSO’s witnesses would become unnecessary and closing
submissions can be made orally within the same hearing day.
6 Ibid at [16]
[2019] FWCFB 4684
6
For these reasons, Ms Roche should be entitled to her costs of two
hearing days and her written closing submissions.”7
[9] As is clear from the summary immediately above, the Respondent contended for two
alternative unreasonable acts or omissions of the Appellant which she said caused her to incur
costs. The first was the failure to accept the Second Offer. The second was its failure to
concede that the Respondent’s dismissal was unfair, which concession would have resulted in
the scope of proceedings being narrowed to remedy only. Consequently, the failure to make
the concession caused the Respondent to incur costs in unnecessary hearing time, cross
examination and submissions on the question of whether the dismissal was unfair.
[10] As we have already noted, the Deputy President accepted that the unreasonable act or
omission was the failure to accept the Second Offer and continuing to defend the application
thereafter. The Deputy President therefore did not consider the alternative basis upon which
this part of the application was put.
Grounds of appeal
[11] The Appellant’s notice of appeal contains six appeal grounds.
[12] Ground 1 contends that the Deputy President erred in taking into account an irrelevant
consideration that the Appellant ought to have been aware that there were significant risks in
continuing to defend the application in determining that the rejection of Ms Roche's Second
Offer was unreasonable.
[13] Ground 2 contends the Deputy President erred in finding that after the first two days of
hearing and on or before 20 April 2018, the Appellant could not have reasonably held the
view it could defend the application. This is because the Deputy President is said to have
failed to pay regard to the Appellant's submissions and the evidence of Mr MacLean; relied
upon a factually incorrect submission of Ms Roche that Mr Bowyer had conceded on or
before 20 April 2018 that there were serious flaws with respect to the investigation report of
Mr Tawfiq; and failed to have regard to the evidence of Ms Campbell concerning
impracticability of reinstatement.
[14] Ground 3 contends the Appellant was denied procedural fairness in relation to the
findings that the Appellant should have known that monetary offers without reinstatement
would not be accepted by Ms Roche and that it held certain knowledge about the prospects of
successfully defending the application based on the quantum of its 24 April 2018 settlement
offer.
[15] Ground 4 contends the Deputy President erred in finding that the Appellant recognised
that it had diminished prospects for defending the application given the quantum of its 24
April 2018 settlement offer.
[16] Ground 5 contends the Deputy President erred in finding that the Appellant's offers of
21 February 2018 and 24 April 2018 were not reasonable.
7 Ibid at [30]
[2019] FWCFB 4684
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[17] Ground 6 contends the Deputy President erred in incorrectly applying the Appellant’s
duties under the common law and the Work, Health and Safety Act 2011 (NSW) (NSW WHS
Act).
[18] We deal with the appeal grounds below.
Ground 1
[19] The Appellant contends that central to the Deputy President's decision to order costs,
was her finding that at the time of the expiration of the Second Offer (20 April 2018), it ought
to have been clear to the Appellant that there were significant risks in continuing to defend the
application.8 It says this was an irrelevant consideration.
[20] The Appellant contends that the commencement and the defence of an unfair dismissal
remedy application carries significant risks and it says that what is required to enliven the
discretion to award costs under s.400A(1) of the Act, is something more than the
identification that there were significant, and in this matter, unidentified risks.
[21] The finding made by the Deputy President is informed by her conclusion earlier at
[36], that after the first two days of hearing the Appellant could not reasonably have
continued to hold the view that Ms Roche’s dismissal was justified, or that it could defend an
order for reinstatement.
[22] These conclusions are said by the Respondent to have been open to the Deputy
President and were correct. If that is so, this ground of appeal must fail. Whether the act or
omission of not accepting the Second Offer was unreasonable is to be objectively ascertained.
The Deputy President’s conclusions based on her assessment of the evidence as at the end of
day two of the hearing is plainly relevant to assessing objectively whether the identified act or
omission was unreasonable.
[23] However, we think the conclusion was neither open, nor correct. The Deputy
President’s conclusion is to be assessed by reference to the known state of affairs in the case
as at the end of the second day of a five day hearing. By the end of the second day of hearing,
the Respondent’s evidentiary case had concluded but the Appellant was only part way through
its evidence. The Deputy President observed that “Ms Campbell and Mr Morrell had given
evidence that was favourable to Ms Roche, including that Ms Campbell considered Ms Roche
to be an “amazing front of house person”.”9 But that was not the only evidence given by Ms
Campbell.
[24] Ms Campbell is the Principal of the school at which the Respondent had worked. She
gave evidence that:
the Respondent “struggles with her interpersonal relationships which to me is just as
important to creating good workplaces as technical proficiency”;10
8 Ibid at [36]
9 Ibid at [38]
10 Appeal book at p.768
[2019] FWCFB 4684
8
she had no confidence that the Respondent “would get along with a new supervisor”
and considered “it highly likely” that the Respondent would “struggle to take
direction from anyone given her behaviour”;11
the Respondent’s behaviour “was exhausting for me in my leadership role at the
School and extremely stressful . . .” and that it was clear from the Respondent’s
statement “that she will never accept that she needs to significantly change in order
to work at the School”;12 and
for the first time since “I became Principal I feel the front office is running
smoothly.”13
[25] Ms Campbell also gave evidence that:
there were relationship problems involving the Respondent;14
the Respondent had been passively aggressive at times;15
she would facilitate reinstatement of the Respondent if ordered to do so and would
endeavour to manage the situation but that she “had quite a few of [her] staff
members come to [her] concerned because they have been rebuked by Lorraine
publicly and ignored. That to me is a concern.”;16
reinstatement will not result in the house coming down and the school would get by,
but she will still have to do a lot of work with her staff;17
she was concerned about the relationships between the Respondent and other staff
including teachers and how the relationships would be re-established with those staff
as the front office role is such a vital role;18 and
there would “have to be quite a bit of work done around re-establishing those
relationships” and that would distract “those teachers from the performance of their
duties.”19
[26] All of this evidence is relevant to the question of reinstatement. It is doubtless the case
that by the end of day two of the hearing the Appellant’s prospect of successfully defending
against a finding that the Respondent’s dismissal was unfair had been damaged. But it had not
put on its full case. In any event, the relevant act or omission that the Deputy President found
to be unreasonable was the failure by the Appellant to accept the Second Offer. That offer,
like the first offer, was for reinstatement. The Appellant was resisting reinstatement.
11 Ibid
12 Ibid
13 Ibid
14 Ibid at p.415, PN1997
15 Ibid at pp.429 – 430, PN2164 – PN2167
16 Ibid at p.457, PN2469 – PN2472; see also Appeal book at p.474, PN2665
17 Ibid at p.458, PN2481
18 Ibid at p.475, PN2669 – PN2675
19 Ibid at p.475, PN2673 – PN2675
[2019] FWCFB 4684
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[27] Given the evidence noted above and given that the Appellant had not completed its
evidentiary case, it was simply not open for the Deputy President to conclude that the
Appellant “could not reasonably have continued to hold the view that . . . it could defend an
order for reinstatement.” It is this conclusion that founds that which follows namely, the
Deputy President’s conclusion that it ought to have been clear to the Respondent that there
were significant risks in continuing to defend the application. That conclusion was erroneous
because the underpinning conclusion was not open on the evidence after the second day of a
five day hearing. It follows that by taking that matter into account the Deputy President fell
into error.
[28] Ground 1 of the notice of appeal therefore succeeds.
Ground 2
[29] The Appellant contends that the Deputy President erred in finding that after the first
two days of hearing and on or before 20 April 2018, the Appellant could not have reasonably
held the view it could defend the application. The Respondent contends that whether or not
the Appellant believed it had reasonable grounds for continuing to defend the case is not the
statutory criterion – it is whether there was an unreasonable act, judged objectively. This is
correct, however, it is clear that the Deputy President assessed the unreasonable act of failing
to accept the Second Offer by reference to her conclusion that the Appellant “could not
reasonably have continued to hold the view that Ms Roche’s dismissal was justified, or that it
could defend an order for reinstatement, after the first two days of hearing.”20 The evidentiary
matters which the Appellant says the Deputy President did not take into account, concerned
not just the subjective belief of the Appellant, or its various officers, but concerned objective
factual matters upon which that belief was formed. Some of those matters are relevant in the
assessment of whether the failure to accept the Second Offer and to continue to defend the
prospect of reinstatement were objectively, unreasonable acts.
[30] The Respondent also contends that the Deputy President judged that there was an
unreasonable act, having regard to the findings that were made in the substantive decision and
that this obliterates the allegation of error. This submission cannot be accepted. The effect of
this submission is that if the Deputy President was wrong in her conclusion that the Appellant
could not reasonably have continued to hold the view that it could defend an order for
reinstatement after the second day of hearing, the act of failing to accept the Second Offer was
nonetheless unreasonable by reference to the final outcome.
[31] In any event, this is not what the Deputy President found. As is evident from the
Deputy President’s analysis at [35]–[43] of the Decision, the Deputy President assessed
whether the failure to agree to the terms of settlement in the form of the Second Offer was
unreasonable by reference to the state of affairs as were known at that time. The further
conclusion that continuing to defend the application after refusing to accept the Second Offer
was an unreasonable act was also assessed by reference to the state of affairs known to the
Appellant at the time of the Second Offer expiring.
[32] To make good this appeal ground, the Appellant makes three points. First, it says the
Deputy President failed to pay regard to the Appellant's submissions and the evidence of Mr
20 [2019] FWC 2768 at [36]
[2019] FWCFB 4684
10
MacLean. Secondly, it says the Deputy President relied upon a factually incorrect submission
of Ms Roche that Mr Bowyer had conceded on or before 20 April 2018 that there were serious
flaws with respect to the investigation report of Mr Tawfiq. Thirdly, it contends that the
Deputy President failed to have regard to the evidence of Ms Campbell concerning the
impracticability of reinstatement.
[33] Dealing with the third contention first, we cannot discern any analysis of the evidence
given by Ms Campbell save for the reference at [38] of the Decision that “Ms Campbell...had
given evidence that was favourable to Ms Roche including that Ms Campbell considered Ms
Roche to be an “amazing front of house person”. As our consideration of appeal ground 1
shows, Ms Campbell’s evidence was far more extensive, particularly so far as the question of
the practicality of reinstatement is concerned. It is to be remembered that the Second Offer
was one for reinstatement. It was that offer that was not accepted and the decision not to
accept the offer that is said to be unreasonable, as well as continuing to defend against an
order for reinstatement by reference to the state of the evidence after the second day of
hearing.
[34] Ms Campbell gave evidence favourable to the Respondent on that question, but she
also gave unfavourable evidence. On its face, the Decision discloses that the Deputy President
only took account of the evidence that was favourable. The Decision does not disclose that
she took into account the evidence we have earlier recounted and that was not favourable to
the Respondent. We therefore consider the Appellant has made out the third contention.
[35] Returning then to the first contention, Mr MacLean’s evidence explaining his
reasoning for rejecting the second offer was as follows:
“28. On 3 April 2018, I received a copy of Ms Roche's Second Offer (see Annexure
"MML-3").
29. I considered Ms Roche's Second Offer. I was quite surprised to read within this
letter that Ms Campbell was said to have given evidence at the hearing that Ms Roche
was an ""amazing" front of house person" and that "she has reasonable expectations
that Ms Roche will be able to successfully rebuild her relationship with teachers" as
this was inconsistent with what she told me during our conversation outlined above in
paragraph 24. However, I am aware that the transcript from the cross examination of
Ms Campbell revealed that she held concerns about the impact of a reinstatement
order on other staff members of the school, due to comments made to her by staff
concerning Ms Roche's behaviour following the termination of her employment.
30. Notwithstanding the abovementioned comments regarding Ms Campbell, there
was nothing within this letter that changed any of the concerns I previously held with
respect to the proposed reinstatement of Ms Roche (as outlined above in paragraphs
25-27). In terms of the threat that our case was "doomed to fail", I thought this view
was premature given the CSO was permitted to prepare and file further written
evidence, and that the most senior and specialised witnesses for the CSO had still not
had the opportunity to give evidence at the hearing, namely Mr Tawfiq, Ms Price, Mr
Bowyer and Ms Delaney. For the above reasons I decided not to accept Ms Roche's
Second Offer, and instructed CCER accordingly.”21
21 Appeal book at p.129, [28] – [30]
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[36] Mr MacLean also gave evidence that he understood from his conversation with Ms
Campbell that she held significant concerns about the possibility of the Respondent’s
reinstatement, and that in the Respondent’s absence the interpersonal conflict and tension had
ceased and the front office staff were happy and working cooperatively with each other.22 Mr
MacLean’s evidence about his conversation with Ms Campbell which had occurred on or
around March or April 201823 is consistent with the evidence given by Ms Campbell to which
we have earlier referred.
[37] The Respondent contends that the Deputy President considered Mr MacLean’s
statement, and the opinions expressed therein. The Respondent points to the Deputy
President’s summary of Mr MacLean’s evidence set out at [20] – [26] of the Decision. The
Respondent contends that it cannot be said that the Deputy President somehow overlooked
this material or otherwise did not have a proper basis for the findings that she made. The
Respondent says that the Appellant’s allegation is a mere expression of disagreement with
Deputy President’s conclusions.
[38] This submission must be rejected. Although reasons for a decision need to be read
fairly and as a whole, it is not sufficient to merely set out a summary of evidence that is
material to a question that is to be decided without disclosing whether that evidence was
accepted or rejected or how it was weighed in the balance in reaching the ultimate conclusion.
Mr MacLean’s evidence dealt squarely with the factual basis upon which he decided to reject
the Second Offer. The Deputy President concluded that the failure to accept the Second Offer
was an unreasonable act which caused the Respondent to incur costs. Mr MacLean’s evidence
was not contested. Mr MacLean’s summary of the concerns that Ms Campbell had expressed
to him about reinstatement before she had given evidence, was consistent with the evidence
that she ultimately gave. Although it may be inferred from the Deputy President’s ultimate
conclusion that she did not accept Mr MacLean’s evidence or gave it little or no weight, the
reason why that might be so is not explained. The Deputy President does not engage with Mr
MacLean’s evidence at all. We consider that the Appellant’s first contention is also made out.
[39] As to the second contention in support of this ground of appeal, a review of the
transcript reveals that Mr Bowyer had not concluded his evidence on or before 20 April 2018.
By the end of the second day of hearing, he had given evidence about a 2015 investigation
report prepared by Mr Tawfiq and a related warning to the Respondent about that time.24 He
had not yet traversed findings of misconduct made against the Respondent in a subsequent
investigation report by Mr Tawfiq in 2018, which were relied upon to justify her dismissal.
We would also observe that to the extent that concessions had been made by Mr Bowyer by
the second day of hearing, they were in response to hypothetical scenarios put by the
Respondent. Those scenarios had not yet been established. In our view, Mr Bowyer’s
evidence in this regard cannot fairly be seen as having so comprehensively undermined the
Appellant’s case that it could not hope to establish a valid reason for dismissal.
[40] It follows that the second appeal ground succeeds.
[41] It is convenient that we deal next with ground 4 before returning to ground 3.
22 Ibid at p.128, [26(f)]
23 Ibid at p.127, [24]
24 Appeal Book at p.1531
[2019] FWCFB 4684
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Ground 4
[42] By this appeal ground, the Appellant contends the Deputy President committed an
error of fact in drawing an inference that the Appellant recognised the weakness of its case
after the 2 days of hearing given the size of the settlement offer made after the Second Offer
had lapsed.
[43] The Respondent says that there is a fundamental problem with this appeal ground. The
Respondent correctly points out that whether the Appellant believed that it had reasonable
prospects of success in defending the case is not relevant to whether an inference is available
from the size of the financial offer actually made to the Appellant, bearing in mind that the
statutory criterion is whether there was an unreasonable act, judged objectively. The
Respondent contends the inference was correctly drawn as the Appellant would not have
made such a large offer unless it actually knew that its case was not reasonably defensible.
This contention must be rejected.
[44] The basis upon which an inference of the kind drawn by the Deputy President may be
drawn in civil proceedings was discussed in Transport Industries Insurance Co Ltd v
Longmuir25 as follows:
“In a civil case like this, where there is no direct evidence of a fact that a party bearing
the onus of proof seeks to prove, ‘it is not possible to attain entire satisfaction as to the
true state of affairs’: Girlock (Sales) Pty. Ltd. v Hurrell. In such a case, however, the
law does not require proof to the ‘entire satisfaction’ of the tribunal of fact. A
definition of the sufficiency of circumstantial evidence in a civil case to support proof
by inference from the directly proved facts was given by the High Court in the
unreported case of Bradshaw v McEwans Pty. Ltd. (27 April 1951) in a passage since
repeatedly adopted: e.g. Luxton v Vines; Holloway v McFeeters; Jones v Dunkel;
Girlock's case. The relevant passage in Bradshaw's case is this:
‘Of course as far as logical consistency goes many hypotheses may be put which
the evidence does not exclude positively. But this is a civil and not a criminal
case. We are concerned with probabilities, not with possibilities. The
difference between the criminal standard of proof in its application to
circumstantial evidence and the civil is that in the former the facts must be such
as to exclude reasonable hypotheses consistent with innocence, while in the
latter you need only circumstances raising a more probable inference in favour
of what is alleged. In questions of this sort, where direct proof is not available,
it is enough if the circumstances appearing in evidence give rise to a reasonable
and definite inference: they must do more than give rise to conflicting
inferences of equal degrees of probability so that the choice between them is
mere matter of conjecture: see per Lord Robson, Richard Evans & Co. Ltd. v
Astley. But if circumstances are proved in which it is reasonable to find a
balance of probabilities in favour of the conclusion sought then, though the
conclusion may fall short of certainty, it is not to be regarded as a mere
conjecture or surmise ...’”26
25 [1997] 1 VR 125
26 Ibid at 141
[2019] FWCFB 4684
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[45] The imputed motivation for the size of the Appellant’s settlement offer, was in the
circumstances a matter of conjecture rather than one where the circumstances appearing in the
evidence gave rise to a reasonable and definite inference. It was plainly the case that the
Appellant was resisting reinstatement. Ms Campbell had given evidence about the practicality
of reinstatement. The Respondent had made two offers of settlement each involving
reinstatement consistent with her desire to be reinstated. At the conclusion of the second day
of hearing there had been some evidence which had been favourable to the Respondent and
which had assisted in her merits case. The case had not concluded but there was evidence as
we discussed earlier which was not favourable to the Respondent’s case for reinstatement and
which was favourable to the Appellant’s case against reinstatement. In this context, we
consider there are at least two conflicting inferences available which have essentially equal
degrees of probability. The first is the inference drawn by the Deputy President. The second is
that the Appellant wanted to ensure an outcome that did not involve reinstatement and
structured its financial offer in such a way that might make a financial outcome acceptable to
the Respondent in lieu of reinstatement. That is, the Appellant was motivated to ensure that it
obtained the outcome it was seeking. In the circumstances of the state of the evidence at the
conclusion of day two, deciding which of the two motivated the Appellant is mere conjecture
and is not appropriately the subject of an inference, one way or the other. The Deputy
President erred in so doing.
[46] It follows that this ground of appeal succeeds.
[47] The Respondent also submitted that the fact that the Deputy President had not
examined the evidence of Mr MacLean in greater detail on this point was really a matter of
politeness. She contended that the Deputy President would otherwise have to express impolite
observations about his (in)capacity to correctly judge the merits of the case. This submission
is not helpful and merely speculates about that which the Deputy President might otherwise
have said. We have earlier set out relevant passages of Mr MacLean’s evidence. We consider
that Mr Maclean’s assessment as to the Appellant’s capacity to continue to resist
reinstatement and his reasons for rejecting reinstatement, having regard to the evidence
available to him at the time, was understandable.
Ground 3
[48] By this ground of appeal the Appellant contends that it was deprived of an opportunity
to present a case in relation to the inferences to be drawn from the quantum of its settlement
offer. This is a procedural fairness point. As the Appellant has had a full opportunity during
the appeal to ventilate the issue of the inference drawn by the Deputy President and given our
conclusion on ground 4, we need not deal with this ground.
Ground 5
[49] Appeal ground 5 is concerned with the Deputy President’s finding at [40] of the
Decision that the financial offers of settlement made by the Appellant were not reasonable.
That finding is based on that which is described by the Deputy President as the Respondent’s
“very clear desire to be reinstated.” It seems to us also that a further reason for that conclusion
was her finding that at the time the second financial settlement offer was made by the
[2019] FWCFB 4684
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Appellant, its “prospects of success were obviously and significantly diminished.”27 As we
have earlier pointed out, the evidence given by Ms Campbell as to the difficulties associated
with reinstatement, which were known to the Appellant at the time it made its second offer of
a financial settlement, were relevant to the question whether reinstatement could be resisted.
On the basis of the evidence on that question as at the conclusion of the second day of
hearing, it could not in our view be said that the Appellant’s prospects of successfully
resisting an order for reinstatement “were obviously and significantly diminished” or that
reinstatement was the only likely outcome of the case.
[50] Moreover, it is difficult to understand the Deputy President’s finding that the
Appellant’s financial offers were not reasonable in light of the Respondent’s “very clear
desire to be reinstated”. The fact that one party holds a strongly held desire for a particular
remedy does not render settlement offers of a different kind inherently unreasonable. In this
case, the Appellant had offered financial compensation far in excess of the statutory
maximum available to the Respondent if reinstatement was found to be inappropriate. There
was evidence to support findings both in favour of and against reinstatement, and each was
open to the Deputy President. While reinstatement was clearly the Respondent’s preference,
she had also sought compensation in answer to the question in her initiating application
“[W]hat outcome are you seeking by lodging this application?”
[51] It follows that we do not agree with the Deputy President’s findings in relation to
whether the Appellant’s offers of settlement were reasonable. However, we are not persuaded
the findings had any relevant bearing on her assessment that the Appellant’s rejection of the
Second Offer and its continuing defence of the application were unreasonable acts, warranting
an order for costs. In these circumstances ground 5 has no bearing on the appeal.
Ground 6
[52] Under this ground of appeal, the Appellant contends the Deputy President erred in
incorrectly applying the Appellant’s duties under the common law and the NSW WHS Act.
The Appellant points to Mr MacLean’s evidence that he had a concern about reinstating the
Respondent as it would pose an acceptable risk to all employees.28 It contends that the Deputy
President determined that there was no such risk, firstly for the reason that Ms Culla had
resigned and therefore there was no risk and that this approach ignored the full extent of the
duty and was an error of law.
[53] This submission is rejected. The Deputy President did not find that there was no risk.
Rather, she rejected the Appellant’s contention that reinstatement of the Respondent would
have placed it in breach of its obligations under the NSW WHS Act. To the extent that
reinstatement of the Respondent might have given rise to a risk to the health and safety of
others, it is self-evidently the case that the primary obligation under work, health and safety
law is to provide and maintain so far as is practicable a workplace that is safe and without risk
to health and safety. The elimination or diminution of health and safety risks can be achieved
through a number of means. If reinstatement posed a risk to health and safety, it does not
follow that the Respondent would be in breach of its duty by acting in that way. Rather, it
would then have an obligation to eliminate or diminish the risk by implementing appropriate
27 [2019] FWC 2768 at [40]
28 Appeal book at p.124, [12]
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controls. Resisting the Respondent’s return to the workplace was one example of such a
control, but it was not the only one.
[54] No appealable error is disclosed by this ground of appeal and it fails.
Permission to appeal
[55] As will be apparent from our discussion above, we have identified appealable error
based on a number of the grounds advanced in the notice of appeal. We consider that it is in
the public interest that permission to appeal be granted because the Decision manifests an
injustice by reason of the matters that we have identified.
Conclusion
[56] For the reasons stated, we grant permission to appeal and uphold the appeal on
grounds 1, 2 and 4. As a consequence, the Decision should be quashed. For the reasons stated,
we are not persuaded that the failure by the Appellant to accept the Second Offer or its
decision to continue to defend against an order for reinstatement was an unreasonable act. So
much of the application for costs under s.400A(1) as relies on those two acts must fail.
[57] The Respondent’s application for costs will be remitted to another member for
rehearing for two reasons. Firstly, the Deputy President did not deal with the Respondent’s
alternative argument that the failure to concede that the Respondent’s dismissal was unfair
was an unreasonable act or omission which could have confined the remainder of the
proceedings to dealing only with remedy. Secondly, the Deputy President did not deal with
the application under s.611(2)(b) of the Act. These are matters that are appropriately dealt
with by a single Member at first instance.
Orders
[58] We order as follows:
1. Permission to appeal is granted;
2. The appeal is upheld on grounds 1, 2 and 4 in the notice of appeal;
3. The Decision in [2019] FWC 2768 is quashed;
4. So much of the Respondent’s application for costs under s.400A(1) which relies on
the Appellant’s failure to accept offers of reinstatement or on its continued defence
against an order for reinstatement is dismissed; and
5. The remainder of the Respondent’s application for costs is remitted to the Region 1
Regional Coordinator for allocation.
DEPUTY PRESIDENT
MM ISSION WORK C TH THE SEAL . THE FAIR
[2019] FWCFB 4684
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Appearances:
D O’Sullivan of Counsel for the Appellant.
A Aleksov of Counsel for the Respondent.
Hearing details:
2019.
Melbourne and Sydney (by video):
June 14.
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PR710043
