1
Fair Work Act 2009
s 394 - Application for unfair dismissal remedy
Subeg Singh
v
Sydney Trains
(U2016/12864)
DEPUTY PRESIDENT SAMS SYDNEY, 30 SEPTEMEBER 2019
Application for relief from unfair dismissal – breaches of safety policies and procedures -
substantive application dismissed – application for costs – whether costs incurred because of
an unreasonable act or omission – whether application had no reasonable prospects of
success – indemnity costs refused – unreasonable act established – costs ordered from that
date – party to party costs – further quantification adjourned until appeal outcome known.
[1] On 21 June 2019, I published a decision in Singh v Sydney Trains [2019] FWC 182
(the ‘Decision’). Briefly stated, I determined that Mr Singh’s dismissal by Sydney Trains as a
Team Leader on 30 November 2016 was neither ‘harsh, unjust or unreasonable’, within the
meaning of s 387 of the Fair Work Act 2009 (the ‘Act’) and dismissed his application for
orders for reinstatement, continuity of employment and lost remuneration. I note that the
Decision is subject to an appeal lodged by Mr Singh, which is listed before the Full Bench of
the Commission in November 2019.
[2] On 4 July 2019, through its lawyers, Bartier Perry Lawyers, Sydney Trains filed an
application for costs against Mr Singh, pursuant to ss 400A and 611 of the Act. This decision
will determine that application (the ‘costs application’). On 16 July 2019, I listed the costs
application for a directions hearing and conference. Both parties retained their legal
representation for which permission was granted in the substantive proceedings, pursuant to s
596 of the Act. To the extent necessary, I continue the permission granted in 2017 for both
parties to be represented by lawyers. Ms Amber Sharp, Solicitor with Ms Rachel Miller
appeared for Sydney Trains and Mr Oshie Fagir, of Counsel, appeared for Mr Singh. For
present purposes, I shall adopt the parties’ preferred approach to continue to refer to Sydney
Trains as the respondent and Mr Singh as the applicant. Directions (subsequently amended)
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DECISION
E AUSTRALIA FairWork Commission
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were issued and the parties agreed that the Commission should determine the costs
application ‘on the papers’.
SUBMISSIONS
For the respondent
[3] An order for costs against the applicant in these proceedings, is sought on the
following alternative bases:
(a) the applicant caused the respondent to incur costs because of an unreasonable act
or omission in connection with the conduct or continuation of the matter: s 400A
of the Act; and
(b) further, or in the alternative, it should have been reasonably apparent to the
applicant that the application had no reasonable prospects of success: s 611(2)(b)
of the Act.
[4] It was submitted that at all times following the filing of the original application, and in
the two year period since, the respondent had made repeated, genuine and concerted efforts to
resolve the proceedings. Reliance was had on an affidavit of Ms Amber Sharp, to which was
annexed various, without prejudice, offers of settlement, including the following:
(a) Re-employment in a non-rail safety critical role while maintaining the applicant’s
pay rate as a Team Leader (email dated 16 February 2017; letter dated 7 April
2017 and letter dated 12 May 2017);
(b) Payment of the sum of $50,339.33, being equivalent to 7 months of the
applicant’s base rate of pay, and in excess of the maximum compensation cap
under section 392(5) of the Act (by letter dated 3 November 2017);
(c) Payment of the sum of $69,450, being a sum equal to the maximum compensation
cap under section 392(5) of the Act, which roughly equated to almost 10 months
of the applicant’s base rate of pay (by letter dated 23 March 2018); and
(d) Payment of the sum of $70,000, being a sum in excess of the maximum
compensation cap under section 392(5) of the Act, equal to 26 weeks’ pay at the
applicant’s total remuneration, including overtime; plus provision of a Gold
Travel Pass, and treatment of the termination as a resignation (in the conciliation
conference on 9 April 2018).
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It was noted that the final settlement offer remained open during the eight days of hearing, but
has at all times been rejected by the applicant.
[5] The respondent relied on my comments in dismissing the substantive application at
[346] and [348] as follows:
‘[346] Even if these ‘harshness’ elements tipped the balance in favour of an
unfairness finding, Mr Singh seeks a remedy nothing short of full reinstatement.
Reinstatement, in my view, would be utterly unthinkable in circumstances where he
refuses to accept any responsibility at all for the incidents of 1 August 2015 and casts
the entire blame on Sydney Trains and his fellow employees. There was not a skerrick
of remorse - no regret for his actions - no apology - no contrition.
…
[348] Given Mr Singh’s own evidence, I could not be at all confident that he would
not act in a similar way in similar circumstances, or take a similar cavalier approach to
his responsibilities as Team Leader. He ignored his responsibilities as a PO4 for which
he had been trained. He disregarded the cardinal safety policies and procedures of
Sydney Trains, notwithstanding he claimed he had a good knowledge and awareness
of them. His belligerent denial of any wrongdoing is so gravely concerning, that I am
satisfied the employer’s trust and confidence in him has been permanently destroyed.’
Further, it was observed that I found, inter alia:
(a) the applicant failed to accept responsibility for his actions and sought to blame
others;
(b) the applicant expressed no regret, remorse or contrition;
(c) the applicant was not a witness of truth;
(d) the applicant reconstructed events to meet the evidence filed by the respondent;
and
(e) the manner in which the applicant gave evidence prolonged the hearing.
[6] It was submitted that the applicant’s ‘dogged refusal’ to accept anything short of
reinstatement was an unreasonable act or omission in connection with the conduct or
continuation of the proceedings, or it would have been reasonably apparent to the applicant
that his reinstatement application had no reasonable prospects of success.
[7] The respondent identified seven alternative points in time from which the Commission
could properly exercise its discretion to award costs. These were:
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(a) 27 January 2017, being the date the respondent filed its evidence and submissions;
or, in the alternative;
(b) 16 February 2017, when the parties settled in principle (according to the
respondent); or, in the alternative;
(c) 3 November 2017, when the respondent offered to settle for a sum in excess of the
compensation cap (having regard to the applicant’s base rate of pay) under section
392(5) of the Act and outlined, by reference to the evidence filed, the reasons why
reinstatement was not appropriate; or, in the alternative;
(d) 7 March 2018, being the date upon which the respondent filed its evidence in
reply and submissions; or, in the alternative;
(e) 23 March 2018, being the date upon which the respondent made an open offer to
settle for an amount equal to the compensation cap, being equivalent to
approximately 10 months of the applicant’s base rate of pay; or, in the alternative;
(f) 6 April 2018, being the first day of the hearing when the respondent indicated that
its settlement offer of 23 March 2018 remained open for acceptance; or, in the
alternative;
(g) 9 April 2018, being the second day of hearing following the Commission-directed
conciliation at which the respondent increased its settlement offer and left it open
for acceptance.
[8] The respondent’s submission then set out a detailed chronology of events from 24
October 2016 when the application was first filed. It was said that the issue of the
inappropriateness of reinstatement was well known to the applicant from Mr Bugeja’s
evidence filed on 27 January 2017. There then followed the offer of settlement on 13
February 2017, which essentially provided re-employment to a non-safety critical role with
the same rate of pay. This became the subject of various exchanges between the applicant’s
then legal representatives and his subsequent representative by Mr Michael Lawler, (which
itself became the subject of some controversy and other proposed proceedings). Further
settlement offers were made, over a number of months during 2017, and other proceedings
about the settlement were the subject of appeal. On 7 November 2017, the applicant rejected
the most recent offer of settlement (7 months’ salary) and said:
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(a) ‘I am confident that the evidence will show that I did not commit the misconduct
alleged against me and that [sic] I am confident that I will be reinstated’
(b) ‘I want my job back, and I want to clear my name. For those reasons I will not
accept a purely monetary settlement’
(c) ‘I would be happy to discuss further compromise involving reinstatement’.
[9] On 19 January 2018, the applicant filed his reply evidence and submissions and the
respondent filed its evidence in reply on 7 March 2018, which included evidence
contradicting the applicant’s version of events. After the first day of the hearing, I formed the
view that a Member Assisted Conciliation by Commissioner Riordan may be of some utility.
This proved unsuccessful. The hearing continued and the respondent’s final offer remained
open throughout the hearing.
[10] The respondent highlighted the passages from my decision in which I found the
applicant was not a witness of truth and had reconstructed events to meet the evidence of the
respondent, I set out these extracts below:
‘(c) the applicant was not a witnesses of truth:
‘[320] In my opinion, there were many examples in Mr Singh’s evidence
which were very concerning and satisfies me, his ‘spin’ on the incidents of 1
August 2015, is simply not believable. I do not intend to record all of this
evidence, but highlight some of the difficult to reconcile and implausible
examples to demonstrate the point.
…
[332] I reject Mr Singh’s evidence as to his minimal role in the incidents on 1
August 2015. His evidence is not credible or believable. His testimony is
riddled with unsubstantiated bravado, inconsistencies and improbabilities,
rather than a full, frank and honest account of the events that day.’
(d) the applicant reconstructed events to meet the evidence filed by the respondent:
‘[318] Regrettably, but perhaps understandably, the entirety of the
applicant’s evidence was designed and constructed to support his steadfast
trope in this case; namely, he had done nothing wrong on 1 August 2015;
Sydney Trains was responsible for the systemic failings on the day and all
the other members of the Team, except himself, were culpable and
responsible for any individual personal failings. Indeed, not only had he
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done no wrong, but he claimed his actions in moving from his Lookout
position to warn of another safety breach, averted a more serious incident.
…
[321] It seems to be that these examples (and others) of non-explanations
were in response to Sydney Trains’ evidence which had been filed first in these
proceedings. Mr Singh had to reconstruct his case in order to fit the
narrative of his insistence of innocence and in light of compelling
corroborative evidence which did not help his case.
(e) the manner in which the applicant gave evidence prolonged the hearing:
‘[316] Mr Singh’s viva voce evidence spanned almost three days. He had
the assistance of a Punjabi interpreter. Having observed him in the witness
box and from an objective review of the transcript, the length of Mr
Singh’s cross examination, in my opinion, was in large part due to his
meandering, deflective and numerous argumentative or unresponsive
answers, despite Mr Seck’s valiant, but often futile attempt to get him to
give a straight answer.
[317] While I accept Mr Singh was in unfamiliar and likely stressful
surroundings in court, I have trouble reconciling his performance in the
witness box with the facts that he had 34 years of service, risen to the rank
of Team Leader and had the most senior rail protection level training; all of
which must require good communication skills and more than just a basic
understanding of English. I also found Mr Singh’s oral evidence a far cry
from his statement of evidence which was carefully laid out, well expressed
and meticulously detailed. His statement evidence raised for the first time,
numerous issues and explanations which had not been raised in his interactions
with Ms Walker, the Regulator or in his ‘Show Cause’ response. More about
this shortly.
…
[319] Mr Singh’s dogged refusal to accept any responsibility for the events
that day entirely coloured his approach to answering questions which even
hinted he might have had some culpability. His answers were deflected by
either focussing on criticising the part played by other members of the
Team or avoided entirely, by him giving an answer completely unrelated
to the question. Given the circumstances, it is little wonder Mr Seck’s
cross examination was long, detailed and probing. The applicant would
concede nothing, even including his own Counsel’s submission that at its
highest, he may have made an ‘error of judgment’ in the Allawah
incident.’’ (emphasis as per submissions, footnotes omitted)
[11] The respondent’s submissions set out the relevant statutory provisions of s 400A, the
Explanatory Memorandum to the Fair Work Amendment Bill 2012 and the authorities of the
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Commission, which have dealt with the section; see: NSW Trains v Ayub [2017] FWCFB
4801; Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga v Roche
[2019] FWCFB 4684 (‘Roche’); Blagojevch v Australian Industrial Relations Commission
[2000] FCA 483; and Ferry v GHS Regional WA Pty Ltd t/a GHS Solutions [2016] FWC
3120.
[12] Turning to the respondent’s alternative proposition under s 611(2)(b) of the Act,
reliance was had on Salama v Transport for NSW t/a Sydney Trains & Ors [2018] FWC 5756;
Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB
810 and Kennedy v Australian Taxation Office [2011] FWA 7469 and Baker v Salva
Resources Pty Ltd [2011] FWAFB 4014.
[13] The respondent submitted that this was a case where the ordinary outcome of each
party bearing its own costs, should be departed from. It fell in the small category of cases
which s 400A was designed to address, being where litigants pursue, or defend unfair
dismissal claims in an unreasonable manner. It was further submitted that this case fell in the
rare category of cases where indemnity costs would be awarded; see: Stanley v QBE
Management Services Pty Limited t/a QBE [2012] FWA 10164. Finally, the respondent put
that in the event its costs application was successful, it would seek leave to file further
submissions as to the quantum of costs.
For Mr Singh
[14] Mr Fagir set out a background to the applicant’s dismissal in which he noted:
(a) Mr Singh had been dismissed after 34 years of unblemished service following an
incident in which another Team member failed to observe a train, resulting in a
‘near miss’.
(b) Mr Singh has not worked since and will never work again.
(c) At the time, Mr Singh had volunteered to work overtime.
(d) The investigation into the incident took over a year. These proceedings spanned 3
years, the hearing occupied 8 days and the Commission’s decision ran to 350
paragraphs.
[15] Mr Fagir put that Sydney Trains’ costs submission is devoid of any compelling reason
for a costs order and the true position is that the case was ‘well arguable’. It did not fall into
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the exception to the ordinary rule that each party should pay their own costs; see: Zornada v
St John Ambulance Australia (Western Australia) Inc. (2013) 237 IR 48. Further, a finding
that an application has no reasonable prospects of success should only be reached with
extreme caution and only where a case is ‘manifestly untenable or groundless’; see: Baker v
Salva Resources Pty Ltd [2011] FWAFB 4014 and Deane v Paper Australia Pty Ltd
PR932454 (AIRCFB, Giudice J, Williams SDP, Simmonds C, 6 June 2003).
[16] Further, costs should only be ordered on the basis of an ‘unreasonable act’ where there
is clear evidence of unreasonable conduct; see: Explanatory Memorandum to the Fair Work
Amendment Bill 2012, [171]. Mr Fagir identified seven features of the case relevant to the
costs application.
(1) The case did not involve any patent jurisdictional or legal defects.
(2) Given the length of the investigation and the hearing, the matter involved
substantial questions of fact.
(3) The volume and nature of the evidence demonstrate that there were many difficult
factual questions to be resolved.
(4) These factual questions might have been determined differently, meaning it could
not be said that any party could have, or should have known they might resolve in
favour of one party or another.
(5) The subjective circumstances of Mr Singh’s age, length of service, perfect
conduct and performance record and the improbability he would never work again
(matters of harshness), involved balancing and weighing these matters, was a
question of degree about which minds might reasonably differ.
(6) It was apparent that many of Sydney Trains’ employees shared Mr Singh’s view
that the events of the day were not out of the ordinary. This would explain Mr
Singh’s view of his prospects of success and desire for vindication.
(7) Sydney Trains’ case at trial had little in common with the original justification for
dismissal. Some reasons were factually wrong. Ultimately, the case was advanced
on evidence which did not exist at the time (e.g. Mr Lynn and Mr Bonatesta’s
evidence and the Allawah footage). Therefore, it could not said that the success of
Sydney Trains’ case was a forgone conclusion.
(8) Much of Sydney Trains’ case was not accepted, Mr Singh was portrayed as a
‘rogue who contumeliously breached safety rules’. It was said the CCTV footage
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of his conduct was ‘shocking, incomprehensible and outrageous’. This was to be
contrasted with Sydney Trains’ failure to advert to the possibility of any
deficiency in Sydney Trains’ own practices and that the work was carried out
consistent with longstanding practice. Further, Sydney Trains withheld patently
relevant evidence, such as the Level 3 Report and the ONSR Regulator reports
which disclosed as follows:
(a) Sydney Trains withheld patently relevant evidence including most of its
own Level 3 Report as well as the report of the industry safety regulator,
both of which describe the incident in terms incompatible with Sydney
Trains’ witness evidence;
(b) Sydney Trains’ procedures for ‘lookout working’ were defective, and were
substantially revised after the incident after criticism by the safety regulator;
(c) there was significant confusion and disagreement among Sydney Trains’
own management about the rules on ‘lookout working’;
(d) ‘lookout working’ was not prohibited in the relevant areas;
(e) track measurement under ‘lookout working’ in the relevant areas was the
norm;
(f) Mr Singh did not plan or supervise work, and had no obligation to check the
Hazardous Locations Register (unlike the Team Manager, Mr Kinder and
Work Group Leader, Mr Lynn);
(g) Mr Singh should never have been placed in the situation he was in at
Allawah;
(h) the CCTV footage which so shocked Mr Bugeja did not reveal any breach
of safety rules (per Mr Lynn’s) or showed breaches for a total of 2.5 minutes
(per Mr Polias’);
(i) Mr Bugeja, despite his shock and outrage, failed to respond at all to various
safety breaches by persons, other than Mr Singh, including for example, the
failure of Mr Kinder and Mr Lynn to check the Register in breach of express
requirement; and
(j) Mr Singh’s obligations in respect of safety were contained in a byzantine
and lengthy set of procedures, the interpretation of which required some
constructional skill;
It followed Sydney Trains case was seriously overstated and bears on Mr Singh’s
legitimate desire to correct the record.
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(9) The Commission did not find Mr Singh was dishonest.
[17] Mr Fagir submitted that Mr Singh was never interested in money or working in a job,
which contributes nothing. It could not be said that his pursuit of reinstatement was
unqualified or manifestly untenable. Just because he failed in getting his job back, it does not
follow a refusal to accept a monetary offer was unreasonable. The fact his case failed did not
mean it was unarguable; in fact it was well arguable.
[18] Mr Fagir addressed the discretionary considerations the Commission would take into
account, if the costs jurisdiction was enlivened, which included the following:
(a) Mr Singh had a long and unblemished career with Sydney Trains;
(b) it is apparent that Mr Singh had a strong attachment to this work at Sydney Trains
and regarded it as a matter of personal pride and identity; a matter which
influenced his strong desire to regain his job;
(c) Mr Singh is an elderly man who has been unemployed for several years and is
unlikely to ever be employed again; and
(d) a significant portion of the costs incurred in the proceeding were the product of
Sydney Trains’ overstatement of its case, which required a significant expenditure
of time and effort in correcting the record (including significant effort to obtain
the Level 3 and Regulator’s Report which should properly have been addressed in
evidence).
[19] As to indemnity costs, this was not a case where there has been substantial
misbehaviour in the conduct of a case and there was nothing in Mr Singh’s conduct which
approaches misconduct, or delinquency of a kind sufficient to justify indemnity costs. Lastly,
the Commission should not give the respondent a blank cheque for costs and if the
Commission is considering an order for costs, Sydney Trains should properly quantify its
costs and what it asks the Commission to order.
Reply Submission
[20] The respondent submitted that the applicant’s submission appears to be premised on
his case theory deployed at the hearing, rather than the reasons of the Commission for
dismissing his application. It was said that the applicant’s submission adopts an overly
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simplistic approach to the costs application. It was not merely about the applicant’s refusal to
accept a monetary settlement. The evidence in the proceedings supported a conclusion that
reinstatement to a safety critical role was neither reasonable nor tenable; see: the Decision at
[356] and [348].
[21] The respondent submitted that this was a case where Mr Singh could, or should have
known that his application for reinstatement had no reasonable prospects for success. This put
the case squarely within the category of rare, or exceptional cases in which a costs order is
warranted. The respondent put that Sydney Trains was not seeking an indemnity costs order
for the entirety of the proceedings, or seeking to have the Commission ‘write a blank cheque
for costs’.
CONSIDERATION
Commission’s power to award costs and relevant principles
[22] This costs application is brought under both ss 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.’
[23] The Commission’s general powers to award costs are grounded in s 611 of the Act
which reads:
‘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:
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(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).
[24] 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 imperative 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.
[25] As mentioned, s 611 of the Act sets out the general rule, but subsection (2) makes
obvious that there are exceptions to that rule in certain circumstances; see: Explanatory
Memorandum to the Fair Work Bill 2008 [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.
[26] 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,
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.
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[27] 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.’
[28] 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.
[29] 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
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.’
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[30] 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’
[31] In Hamilton James and Bruce Pty Limited v Gray [2011] FWAFB 9235, a Full Bench
of Fair Work Australia, (as the Commission was then styled), said at [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.”
[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.’
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
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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.’
[32] Similarly, the Full Bench of the Commission in Church v Eastern Health t/as Eastern
Health Great Health and Wellbeing [2014] 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.”
[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
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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 omitted)
[33] 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.
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’
[34] 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
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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.’
[35] 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 Limited v Carter [2013] FWCFB 1811.
[36] 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
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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.
[37] There has been some recent tension in the Commission’s approach to the meaning of s
611 and whether the grounds of whether an application has ‘no reasonable prospect of
success’ applies only at the point the application was made (or filed); see: discussion in
Sharkey v Life Without Barriers [2019] FWC 2287. However, I need not enter this debate, as I
have decided to rely on s 400A in determining this matter. At this juncture, I shall dispose of
the indemnity costs application.
Indemnity Costs
[38] It is trite to observe that the principles to be applied to costs applications on an
indemnity basis, involve a considerable degree of caution. Such costs orders are rare and
unusual.
[39] In Dye v Commonwealth Securities Limited (No 2) [2012] FCA 407, Buchanan J
identified one of the foundations for an order of indemnity costs may be on the basis of the
findings made in the earlier judgment that the applicant’s case was, in all relevant aspects,
based on a falsehood. His Honour said at [5]:
‘[5] Each of these foundations appears to me to provide a sufficient basis for the
award of indemnity costs from the dates specified. As to the first basis upon which
indemnity costs have been sought, it is well-established that indemnity costs are not
awarded as a punishment against an unsuccessful litigant. However, they will be
awarded in appropriate cases to protect a respondent from the financial burden
of proceedings which were unjustified and should not have been commenced.
Each of the proceedings commenced by the applicant falls, in my view, into this
category. In the present case, the lack of merit in each of the proceedings is so
marked, and the claim for protection by the respondents against unwarranted
financial burden is so well-founded, that there is a sufficient justification for the
award of indemnity costs with respect to the whole of each of the proceedings,
subject to an issue to which I will return concerning the basis on which the Supreme
Court proceedings were transferred to this Court. It is not necessary for me to repeat
here the findings which were made in the earlier judgment. The proceedings were, in
each case, based on falsehood and were without any legal substance. The respondents
are entitled to claim that they should be relieved, so far as an order for costs
would achieve this, from the financial burden of defendi ng them.’ (my emphasis)
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[40] I would add to this the comments at Pembroke J in Zepinic v Chateau Constructions
(Aust) Limited [2017] NSWSC 582 at para 46:
‘46. In this case, and in many similar such cases, the litigant’s enthusiasm and
passionate engagement in his quest for supposed justice, obscures the essential
unreality of his expectations; blinds him to the chaos that his pursuit has created; and
renders him oblivious to the waste and expense that he has generated or the
disproportionate court time that he has consumed. Such a litigant’s level of pre-
occupation, ruminative thinking, pedantic attention to the minutiae of his case and
dogged persistence, serve only to hinder the efficient administration of justice ...’.
However, I do not accept that this case falls in one of those rare and exceptional cases
warranting indemnity costs. I accept Mr Singh did not wilfully conduct himself dishonestly,
or engage in conduct which might be described as reprehensible or based on falsehoods.
Sydney Trains application for indemnity costs is refused.
Unreasonable act in connection with the continuation of the matter
[41] At the outset, I accept unreservedly that offers of a monetary settlement where an
applicant is seeking nothing less than reinstatement, does not make a refusal to accept a
monetary settlement inherently unreasonable; see Roche. After all, the primary remedy for an
unfair dismissal finding under the Act is reinstatement. However, this case it not ‘on all fours’
with Roche.
[42] Offers of settlement here included re-employment (albeit, not in a safety critical role),
and with no loss of Team Leader earnings. As I found in the Decision, it would have been
entirely inappropriate to reinstate the applicant to a safety critical role, given his complete
lack of acceptance, or comprehension of his role in the incidents of 1 August 2015 and his
identified failures in this regard, as I accepted from the Level 3 Report and ONSR Report. I
should say that I find somewhat condescending that the applicant considered an alternative
position in Head Office would mean he could ‘contribute nothing’. Nevertheless, this is a
matter going to the exercise of my discretion, and not in my view, to the enlivening of the
Commission’s costs jurisdiction.
[43] In this respect, and in my judgment, it would have been reasonably apparent to Mr
Singh when he received the Level 3 Report and ONSR Report, under a Notice to Produce,
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that he could not maintain his absolute insistence that he was entirely blameless, had done
nothing wrong and had complied with the method of taking of track measurements, which had
always been undertaken as a common practice. I accept of course, that Mr Singh was not
provided these reports, until Sydney Trains was forced to do so.
[44] As I said in granting the Notice to Produce, both these reports were relevant to Mr
Singh’s case and he was entitled to obtain them and rely on them. However, the reports
became a ‘double edged sword’. Mr Singh maintained that he agreed with the reports where
they were critical of Sydney Trains’ practices, culture or other employees, but utterly rejected
any of the reports’ criticisms of him, and his role in the incidents of 1 August 2015. As I said
in the Decision at [320]:
‘(1) Perhaps the most concerning of all, in a classic worst case of ‘cherry picking’,
was Mr Singh’s ‘enthusiastic embrace’ of the Level 3 Report where it was critical of
systemic failures, or of others in the Team, but his complete rejection of any comment
or finding which was critical of him. He justified this by saying Ms Walker was not
there and when he said: ‘she’s not God’. I simply do not understand how it could
seriously be suggested that the Commission would accept this selective, illogical and
incoherent reading of the Level 3 Report.’
[45] In my opinion, this was the crucial turning point in the case. It was this inconsistency
which I find to be an unreasonable act in connection with continuing his matter. It would have
been abundantly obvious to any objective observer that pursuing a case, based on an absolute
conviction he had done nothing wrong and had no culpability, or responsibility for what
occurred on 1 August 2015, could not sustained when the very evidence he selectively relied
on was to the contrary.
[46] I am also conscious of the fact that in Mr Singh’s initiating application, he did not
insist on complete innocence of any wrongdoing. He said that even if there were errors on his
behalf, (admittedly not accepted), they were minor, insignificant or inconsequential. I hardly
think the errors of that day could be so described when I found, there was a ‘near miss’ in the
Allawah incident.
[47] Mr Singh was under the misapprehension that accepting a settlement offer amounted
to findings of guilt and culpability which were contrary to his conscience and his religious
convictions. It may well be that Mr Singh was not advised, or if he was, was not convinced
that settlement terms include no admissions of liability by either party. Mr Singh would have
[2019] FWC 6620
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been perfectly entitled with ‘hand on heart’, to explain to his family, friends and parishioners
that his legal proceedings were settled, without any findings of guilt or culpability. So much
was clear from the various letters of settlement sent by Sydney Trains’ solicitors. To ‘plough
on’ in these circumstances, was a very high risk strategy.
[48] For these reasons, I find that Mr Singh engaged in an unreasonable act in connection
with the continuation of his matter, pursuant to s 400A of the Act, when he refused to
consider the implications of the findings of the Level 3 and ONSR Reports he received on, or
about the 3 November 2017. Coincidently, it was around this date that the respondent made
an offer to settle the matter in excess of the compensation cap. In light of the Level 3 and
ONSR Reports it should have been reasonably apparent to Mr Singh that complete
exoneration and full reinstatement, in these circumstances, was most unlikely. A settlement
amount in excess of the compensation cap, even assuming he was wholly successful, should
have been an active consideration for Mr Singh at that point.
[49] Accordingly, I find that the Commission’s power to order costs is enlivened and costs
should be payable by Mr Singh to Sydney Trains, on a ‘party to party’ basis from that date. In
view of the pending appeal of the substantive Decision, I shall not put the parties to the added
costs and time in preparing further submissions, at this time, as to the quantum of costs and
their calculations according to the schedule of costs as set out in the Act’s Regulations.
Presumably, there will be an amended appeal in light of the above costs finding and any
outcome of the Full Bench appeal proceedings will determine whether further submissions are
necessary.
DEPUTY PRESIDENT
ORK WORK COMMISSION FAIR THE SEAL OF
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Final written submissions:
For the respondent: 30 July 2019
For the applicant: 23 August 2019
Reply for the respondent: 4 September 2019
Printed by authority of the Commonwealth Government Printer
PR712708
