[2014] FWC 1152

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.402 - Application for costs orders against lawyers and paid agents under s.401

The Trustee for the Tancred Family Trust T/A CQESS (Central Queensland Engineering Surveying Services)
v
A Whole New Approach Pty Ltd
(U2013/17334)

DEPUTY PRESIDENT GOOLEY

MELBOURNE, 17 FEBRUARY 2014

Application for costs pursuant to s.402 of the Fair Work Act 2009 - application dismissed.

[1] B & J Tancred Pty Ltd (Tancred) has applied for cost against A Whole New Approach Pty Ltd (AWNA).

[2] AWNA represented an employee who alleged that he had been unfairly dismissed by Tancred. AWNA lodged the application on behalf of the employee and participated in a conciliation conference. AWNA then discontinued the application on behalf of the employee on 5 December 2013.

[3] Tancred allege that AWNA’s unreasonable act in filing the application and then allowing the employee to discontinue the application after the conciliation caused it to incur costs and those acts were unreasonable.

[4] Both parties filed submissions and agreed that the application could be determined on the papers.

[5] Section 401 of the Fair Work Act 2009 provides as follows.

401 Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.

(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under this section 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.

[6] Section 402 requires, in this case, that the application be made within 14 days after the notice of discontinuance was filed.

[7] A number of preliminary issues need to be determined.

Was the application for costs made within 14 days after the notice of discontinuance was filed?

[8] The original application for costs filed in this matter was made under section 376(1)(b) of the Act. On 20 December 2013, I issued directions for the filing of material and I asked Tancred if they wished to seek costs s.376(1)(b) of the Act as this provision deals with costs against paid agents in general protections matters.

[9] On 23 December 2013, Tancred advised that it wished to amend its application to refer to s.401 of the Act.

[10] AWNA submitted that as the application under s.401 of the Act was not made until 13 January 2014, it had not been made within 14 days after the notice of discontinuance had been filed, and therefore it the application was invalid.

[11] Tancred submitted that it had erroneously referred to the incorrect section of the Act in its original application and that AWNA was aware of the costs application and AWNA had not raised this issue at the mention.

[12] I accept the submissions of Tancred that the reference to s.376(1)(b) of the Act was an error. I also accept that AWNA was on notice that costs were being sought against them.

[13] Section 585 of the Act allows the Fair Work Commission (the Commission) to amend any application on any terms it considers appropriate. As there is no prejudice to AWNA, I will exercise my discretion to permit Tancred to amend its application to delete the reference to s.376(1)(b) of the Act and substitute s.401 of the Act.

[14] I therefore find that the application was made within the prescribed time limit.

Am I able to have regard to matters raised in the conciliation conference?

[15] In its submissions Tancred made reference to statements made by AWNA in a conciliation conducted by a member of the Commission’s staff.

[16] AWNA submitted that without prejudice conversations should not be considered by the Commission. It relied upon the decision of the Full Bench in McKenzie v McDonald Murholme 1 which held that offers of settlement should not be taken into account in a costs application unless the offer was subsequently repeated on an open basis. It further referred to a decision of Senior Deputy President O’Callaghan in Danny Page v Independent Pub Group T/A Liquor Lads2 in which the Senior Deputy President held that “the Commission has generally only relied upon without prejudice discussions between unrepresented parties in the conciliation process in order to consider whether a party’s behaviour was an unreasonable act or omission in limited and qualified situations.”3

[17] The decision in McKenzie was cited with approval by a Full Bench in TL Smith and Department of Foreign Affairs and Trade. 4

[18] No party made submissions on the application of s.131(2)(h) of the Evidence Act 1995 to these matters. The Full Bench in TL Smith did not need to address this because it found that there had been no offer to settle, finding instead that there had been an offer to negotiate.

[19] Tancred submitted in reply that the statements made are not protected.

[20] The statements that Tancred seek to rely upon are the statement by the Conciliator to the Respondent that the Applicant offered to settle the matter for eight weeks’ compensation and in the event such offer was not accepted then the Applicant would discontinue his unfair dismissal claim and pursue “the anti-discrimination route”. This statement is second hand hearsay.

[21] Given my decision in this matter it is not necessary for me to determine whether the statement made by the Conciliator is admissible. I will for the purpose of the decision assume that it was.

Should costs be awarded against AWNA?

[22] The decision to award costs against an agent is discretionary and prior to exercising that discretion I must be first satisfied that AWNA’s unreasonable act caused Tancred to incur costs.

[23] The gravamen of Tancred’s complaint is that AWNA, knowing the employee had a number of legal remedies, caused the employee to lodge the unfair dismissal claim. Having made that election and caused Tancred to incur costs by participating in a conciliation conference it then caused the employee to discontinue the claim.

[24] Tancred made allegations to this effect but called no evidence to support its allegation other than the statement made in the conciliation and a reference in a letter sent by AWNA at the time the claim was lodged referring to unlawful treatment by Tancred.

[25] I accept the submissions of AWNA that, given the time limits imposed by the Act for the lodgement of unfair dismissal claims, claims may be lodged before a full examination of the employee’s alternative remedies are explored. Lodging the unfair dismissal claim in those circumstances is not an unreasonable act.

[26] I do not accept that the advice that the employee was claiming unlawful treatment in the letter sent by AWNA on 14 October 2013 meant that AWNA should not have lodged an unfair dismissal application. If, as was alleged by AWNA in that correspondence, it had been found by the Commission that there had been unlawful treatment of the employee that would have assisted the employee in his claim that he had been unfairly dismissed.

[27] More importantly, there was no evidence that AWNA did anything other than lodge an application for an unfair dismissal remedy on instructions from its client. This is not an unreasonable act. There was no suggestion that AWNA encouraged the employee to lodge an unmeritorious claim.

[28] Tancred also relied on the discontinuance of the application after the conciliation as an unreasonable act. It was alleged that this was done to pursue the anti-discrimination route. Even if I accepted that discontinuing an unfair dismissal claim to pursue another cause of action after an unsuccessful conciliation was an unreasonable act, there is no evidence that this was the act of AWNA. Further it is difficult to see how discontinuing the matter caused Tancred to incur costs.

Conclusion

[29] I am unable to find on the evidence before the Commission that AWNA engaged in any unreasonable act that caused Tancred to incur costs and therefore the application for costs is dismissed.

DEPUTY PRESIDENT