DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Ruben Galea
v
Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans
(U2016/10194)

Application for relief from unfair dismissal; s.400A and s.611; application for costs.

Introduction

[15] On 31 March 2017 I issued a decision 1 (Decision) which dealt with an unfair dismissal remedy application by Mr Ruben Galea (Applicant) made under s.394 of the Fair Work Act 2009 (Act). I determined that the dismissal of the Applicant by Billabong Custom Caravans Pty Ltd (Respondent) was harsh, unjust and unreasonable. I also concluded that reinstatement of the Applicant to his former position with the Respondent was inappropriate and instead I ordered the Respondent pay the Applicant compensation in the amount of $15,051 gross plus 9.5% superannuation with deduction of any taxation required by law. On 7 April 2017, the Applicant (Costs Applicant) applied for an order for costs against the Respondent (Costs Respondent) in relation to the unfair dismissal remedy application. The Costs Applicant relies on both ss.400A and 611 of the Act to found his application for costs.2 Both parties filed submissions and have consented to the costs application being dealt with on the papers without the need for a hearing.

Background

[16] On 11 August 2016, the Costs Applicant lodged his unfair dismissal remedy application. On 14 September 2016, the matter was the subject of conciliation where the Costs Respondent offered the Costs Applicant 2 weeks’ pay to settle the matter, the offer was rejected by the Costs Applicant and consequently, the matter was not resolved. 3 Later that day, the Costs Applicant’s solicitor sent a letter to the Costs Respondent on a ‘without prejudice save to costs’ basis (14 September 2016 letter).4 The 14 September 2016 letter, inter alia, indicated that the Costs Applicant believed he had a strong case and that he would be prepared to settle the matter and accept 12 weeks’ pay ($13,680.00) inclusive of legal costs and interests.5 The 14 September 2016 letter encouraged the Costs Respondent to engage an experienced legal representative and also indicated that if the Respondent failed to accept the offer, the Costs Applicant would later seek an order for costs against the Costs Respondent in accordance with the principles stated in Calderbank v Calderbank6.7 The Costs Respondent was given 10 days to accept the offer.8 The Costs Respondent did not provide a response to the Costs Applicant’s 14 September 2016 letter. The offer lapsed.

[17] On 23 September 2016, directions for the conduct of the principal proceeding were issued and the matter was set down for hearing. On 7 October 2016, the Costs Applicant’s solicitor sent a letter to the Costs Respondent reinstating the earlier offer (7 October 2016 letter). 9 The 7 October 2016 letter was mistakenly dated 14 September 2016.10 The 7 October 2016 letter, inter alia, indicated that this was the Costs Respondent’s “final chance” and that the offer was strictly open until 5.00pm on Tuesday, 11 October 2016 and that failing agreement, the Costs Applicant would prepare its evidentiary case.11

[18] On 10 October 2016, Mr Fortunato Salce, Director of the Costs Respondent sent a letter to the Costs Applicant’s solicitor rejecting the offer (10 October 2016 letter). 12 The 10 October 2016 letter indicated that Mr Salce would only be willing to offer 2 weeks’ pay and that he would not be seeking legal representation as he believed the Costs Respondent had enough evidence for the Fair Work Commission (Commission) to make a “fair judgement”.13

[19] On 9 November 2016, the parties received notice that the matter had been set down for a one day hearing on 30 November 2016.

[20] On 29 November 2016, the parties received urgent advice from the Commission that the application appeared to have been lodged out of time, and that no hearing had been set down to address the question whether a further period should be allowed under s.394(3) of the Act. Consequently, the hearing listed for 30 November 2016 was solely directed to that question.

[21] On 30 November 2016, Mr Nicholas Shiels, Solicitor, sought permission to appear on behalf of the Costs Applicant pursuant to s.596 of the Act. Mr Shiels was granted permission on efficiency grounds having regard to the complexity of the matter, the Costs Applicant’s non-technical grasp of English and taking into account fairness as between the Costs Applicant and the Costs Respondent. 14 The Costs Respondent did not have any legal representation.

[22] On 5 December 2016, I determined that there were exceptional circumstances to allow a further period outside the 21 days (Jurisdictional Decision). 15 In the Jurisdictional Decision, I also determined the date of termination to be the date asserted by the Costs Applicant.

[23] On 9 December 2016, the Costs Applicant’s solicitor sent the Costs Respondent another letter of compromise in the amount of $24,000 (9 December 2016 letter). 16 The 9 December 2016 letter referenced paragraphs from the Jurisdictional Decision and highlighted weaknesses in the Costs Respondent’s case. The 9 December 2016 letter also stated that the Costs Applicant would be relying on Brett Haigh v Bradken Resources Pty Ltd17in that if it was not for the dismissal, the Costs Applicant would have been employed for a period of 12 months. The offer was open until 4.00pm on 14 December 2016. The offer lapsed. The Costs Applicant did not refer to this offer in his submission, presumably because he does not rely on it for the purposes of this application.

[24] The matter was then set down for hearing on 19 December 2016. At the outset of the hearing, I asked the parties whether there was any prospect of, or any willingness on the parties, to enter into discussions with a view to seeking a resolution of the matter. 18 The Costs Respondent did not wish to engage in these discussions.19

Consideration

Legislation

[11] Section 400A of the Act provides as follows;

“400A Costs orders against parties

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC’s power to order costs under section 611.”

[12] Relevantly, s.400A was inserted into the Act by of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides;

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

[13] Section 611 of the Act provides as follows:

“611 Costs

(1) A person must bear the person’s own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).”

Consideration – s.611

[15] Section 611 of the Act sets out some of the circumstances in which an order for costs might be made in relation to a matter before the Commission. 20 The primary position in relation to costs of a matter before the Commission is that each person involved in a matter must bear their own costs.21 The policy which underpins this provision seems clear. It is designed to enable a person to make or defend an application without being burdened with the risk that an order for costs might be made against the person.

[16] In Church v Eastern Health, 22 a Full Bench of this Commission said of s.611 of the Act the following:

“Ascertaining the meaning of s.611 necessarily begins with the ordinary and grammatical meaning of the words used. These words must be read in context by reference to the language of the Act as a whole and to the legislative purpose.

There are some similarities between s.611 and s.570 of the FW Act. Section 570 deals with the circumstances in which a party to proceedings in a court in relation to a matter arising under the FW Act may be ordered to pay costs incurred by another party to the proceedings.

Section 570 states:

‘570 Costs only if proceedings instituted vexatiously etc.

(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

(2) The party may be ordered to pay the costs only if:

the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

the court is satisfied of both of the following:

(i) the party unreasonably refused to participate in a matter before the FWC;

(ii) the matter arose from the same facts as the proceedings.”

Given the similarities between s.611 and s.570, in particular the common use of the expression ‘vexatiously or without reasonable cause’, judgements which have construed s.570 and its legislative antecedents are relevant to our consideration of s.611.”

In Heidt v Chrysler Australia Ltd Northrop J said of s.197A of the Conciliation and Arbitration Act 1904 (Cth), a predecessor provision to s.570 of the FW Act:

“The policy of s.197A of the Act is clear. It is designed to free parties from the risk of having to pay the costs of an opposing party. At the same time the section provides a protection to parties, defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court.”

The application of these observations to the construction of s.611 requires some qualification. Section 570 deals with the ordering of costs in court proceedings in relation to matters arising under the FW Act. In court proceedings the usual practice is that an order for costs follows the outcome of the substantive proceedings. As we have mentioned the Commission context is different. The Commission’s power to order costs only arises in the context of ss.376, 400A, 401, 611 and 780 of the FW Act. There is no general practice of cost following the event. Despite these differences the observations of Northrop J in Heidt are apposite to s.611.

Section 611 sets out a general rule - that a person must bear their own costs in relation to a matter before the Commission (s.611(1)) - and then provides an exception to that general rule in certain limited circumstances. The Explanatory Memorandum confirms this interpretation of the section, it is in the following terms:

“2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.

2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.

2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.

2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.”

In the context of s.570 and its legislative antecedents courts have observed that an applicant who has the benefit of the protection of a provision such as s.570(1), (ie the general rule that parties bear their own costs), will only rarely be ordered to pay costs and that the power should be exercised with caution and only in a clear case. In our view a similarly cautious approach is to be taken to the exercise of the Commissions powers in s.611 of the FW Act.” [Endnotes omitted]

[17] As earlier indicated, the general position as to costs in relation to matters before the Commission is that each person must bear his, her or its own costs.

[18] However, the legislature has recognised that there will be circumstances in which an order for costs directed to a person might be appropriate. Therefore, the Commission may exercise discretion to make an order that a person bears some or all of the costs of another person in relation to an application to the Commission, if the Commission is satisfied that:

(a) a person made an application, or responded to an application, vexatiously or without reasonable cause; or

(b) it should have been reasonably apparent to a person that that person’s application or response to an application had no reasonable prospect of success. 23

[19] Before the Commission begins to consider whether to exercise its discretion to make an order for costs, it must first be satisfied that one of the circumstances set out in the preceding subparagraphs is engaged in relation to an application or a response. Subparagraph (a) above is directed to an examination made of the circumstance at the time the application or response is made, while the existence of a circumstance in subparagraph (b) above may be discerned at various points in time during the conduct of a matter before the Commission and does not appear to be confined to the time at which a person makes, or responds to an application.

Vexatiously

[20] A person will make or respond to an application vexatiously if the person’s predominant purpose or motive is to harass or embarrass another person, or to gain a collateral advantage. 24 The issue which must be examined in determining whether a person acted vexatiously in making, or responding to, an application, is the person’s purpose or motive. In my view, it is not sufficient to point to a weakness in a person’s application or response and to conclude from this weakness that the application or response was made vexatiously. Evidence must be led or elicited which is directed to the person’s purpose and from which it can be concluded that a person was motivated to make, or respond to, an application by an intention or desire to harass or embarrass another person, or to gain some collateral advantage.

[21] As to “vexatiously”, the Full Bench in Church observed as follows:

“The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose ....is to harass or embarrass the other party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar observation in Hamilton v Oades in which they said:

‘The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’.”²⁵ [Endnotes omitted]

Without reasonable cause

[22] An application or response will not have been made without reasonable cause simply because it fails or is not accepted. 26 Considering whether an application or response was made without reasonable cause requires an examination of the nature and strength of the application or response. In Hatchett v Bowater Tutt Industries Pty Ltd (No 2)27 von Doussa J described the test that is imposed by the expression “without reasonable cause” as similar to that applied by a court on an application for the exercise of summary power to stay or to strike out a proceeding. His Honour said that, to illustrate the test in that context, expressions such as “frivolous”, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless” and “bad beyond argument” had been used.28 In my opinion, these expressions are also apt to describe the test to determine whether an application or response has been made “without reasonable cause” within the meaning of s.611(2)(a) of the Act, but the test is by no means limited to these expressions.

[23] The phrase “without reasonable cause” has been engaged to support costs orders against an applicant whose application was “misconceived”, 29 although an application or response need not be properly described as “misconceived” for it to have been made without reasonable cause.30 In Kanan v Australian Postal and Telecommunications Union,31 Wilcox J considered that one way of testing whether a proceeding is instituted without reasonable cause is to ask:

“whether, upon the facts apparent to the applicant at the time of instituting the preceding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour one or more arguable points of law, it is inappropriate stigmatise the preceding as being “without reasonable cause”. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the preceding lacks a reasonable cause”. 32 

[24] I respectfully adopt His Honour’s formulation as an appropriate means by which to determine whether an application or response has been made “without reasonable cause” for the purposes of s.611(2)(a) of the Act. Fundamentally, the decisions to which I have referred, show that careful scrutiny is required by the Commission of an application or response in order to ascertain whether that application or response was made without reasonable cause. Ultimately, “it is a matter of judgment, sometimes of fine judgment, in all the circumstances of a particular case whether a proceeding is brought without reasonable cause”. 33

[25] In similar vein, the Full Bench in Church said:

“We now turn to the expression ‘without reasonable cause’. A party cannot be said to have made an application ‘without reasonable cause’, within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.  The test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union, Wilcox J put it this way:

“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”

In the context of an appeal the question becomes whether, having regard to the arguments available to the appellant at the time of instituting the appeal, there was no substantial prospect of success. As Wilcox CJ (with whom Madgwick J agreed) observed in Imogen Pty Ltd v Sangwin: 

“The prospect must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If having regard to those matters, there was not insubstantial prospect of the appeal achieving some success, albeit not necessarily complete success, then it would seem to me it cannot be fairly described as having been instituted ‘without reasonable cause’. This is so even if, in the result, the appeal proved unsuccessful.” 

In the same matter Ryan J said:

“The existence of ‘‘reasonable cause’’ within the meaning of s 347 falls to be determined at the time when the relevant proceedings were instituted. The fact that the party instituting the proceedings later discontinues them is therefore not a matter to be taken directly into account in the application of the section. However, an appeal stands in somewhat different case from proceedings at first instance in that discontinuance may bear indirectly on the discretion conferred by s 347 by tending to confirm an impression derived from the grounds of appeal and the reasons for judgment below that the prospects of success on the appeal were slight.

Not without significance to an assessment of the reasonableness of the institution of an appeal are the amount at issue and the nature of the points raised by the notice of appeal. Where, as here, the appeal is essentially against findings of fact made by the trial judge after a two day hearing resulting in a judgment for $16,900 and raises no important or distinctive point of law or principle, the Court may more readily conclude that it was not reasonable in the circumstances to have instituted it. On a fairly fine balance of the relevant considerations and not without hesitation, I have been led to reach that conclusion in this case and agree with the Chief Justice and the orders which he has proposed. 

In construing s.570 and its legislative antecedents, courts have observed that the test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgement, that is ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’.” 34 [Endnotes omitted] 

It should have been reasonably apparent to a person

[26] An assessment of whether the circumstance described in s.611(2)(b) existed is not limited to the time at which a person makes an application or response, although it may arise at that time. Knowledge gained by a person during the course of a proceeding and after making an application or response might lead to a conclusion that it should have been reasonably apparent to a person that the person’s application or response had no reasonable prospect of success. This knowledge could be gained, for example, at a time after the person has received an opposing party’s evidentiary material, or during the course of the hearing.

[27] Section 611(2)(b) directs attention to that which should have been “reasonably apparent to a person”. In this context, whether something should have been “reasonably apparent to a person”, is not to be determined by reference to the subjective views of the person. Rather, the question must be objectively determined. 35

No reasonable prospects of success

[28] Section 611(2)(b) also directs attention to the substance of an application or response. A conclusion that a particular application or response “had no reasonable prospect of success” is one that should only be reached with extreme caution in circumstances where the application or response is manifestly untenable or groundless, or so lacking in merit or substance, so as to be not reasonably arguable. 36

[29] In Spencer v The Commonwealth of Australia, 37 the majority (Hayne, Crennan, Kiefel and Bell JJ) of the High Court of Australia considered the meaning of the phrase, “no reasonable prospect,” in the context of s.31A of the Federal Court of Australia Act 1976. In that case, their Honours said the following:

“In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described with or without the additional intensifying epitaphs like “clearly”, “manifestly” or “obviously” as “frivolous”,” untenable”, “groundless” or “faulty” but none of these expressions alone or in combination should be understood as providing a sufficient chart of the metes and bounds of the powers given by section 31A nor can the content of the word “reasonable” in the phrase, “no reasonable prospect” be sufficiently, let alone completely illuminated by drawing some contrast with what would be a frivolous, untenable, groundless or faulty claim.

Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under section 31A if, and only if, satisfied that there is no reasonable prospect of success. Of course it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly but the elucidation of what amounts to no reasonable prospect can best proceed in the same way as content has been given through a succession of decided cases to other generally expressed statutory phrases such as “just and equitable” when it is used to identify the ground for winding up of a company. At this point in the development of the understanding of the expression and its application, it is sufficient but important to emphasise that the evident legislative power as revealed by the text of the provision would be defeated if its application is read as confined to cases of a kind which fell within the earlier different procedural regimes.” 38 

[30] In Spencer, the High Court was saying that one should not make the mistake of only concluding that a proceeding has no reasonable prospect of success if it is frivolous, untenable, groundless or faulty and that full expression should be given to that phrase. It seems to me that the observations in Spencer are apt to apply to the construction and application of the phrase “had no reasonable prospect of success” as it appears in s.611 of the Act.

The Costs Applicant’s case

[31] The Costs Applicant submits that following receipt of the Jurisdictional Decision, it should have become clear to the Costs Respondent that its response had no prospects of success and that the Costs Respondent was continuing vexatiously. 39

[32] The Costs Applicant also relies on [32] of the Jurisdictional Decision which reads as follows:

“No warning that dismissal might occur had been given to the Applicant by the Respondent, and dismissal by telephone whilst on annual leave has a tenor of unfairness about it.”

The Costs Applicant says that it should have become clear to the Costs Respondent that the Cost Applicant’s application was likely to succeed and that the Costs Respondent’s defence had no reasonable prospect of success. 40

[33] One of the matters to be taken into account in considering whether there are exceptional circumstances in connection with an application lodged outside of the prescribed time is the merits of the case. The Costs Applicant relies on [32] of the Jurisdictional Decision to make good his point that the Costs Respondent ought to have known that the Costs Applicant’s application was likely to succeed.

[34] The Costs Applicant says that no evidence was led from “the girls in the office” and “Spiro” by the Costs Respondent to substantiate the claim that the Costs Respondent was unaware of the Applicant’s impeding leave. 41

[35] The Costs Applicant also relies on [25] of the Decision which reads as follows:

“The Respondent failed to produce any probative evidence to support its contention that the Applicant was slowing down production and convincing other employees to do the same.”

The Costs Applicant says that the Costs Respondent’s assertion that he failed to train other employees and slowed down production was the main reason advanced and says that the Costs Respondent failed to call any employees to substantiate the allegation and further submits that he did not receive any written warnings to warrant this assertion. 42

[36] Further, the Costs Applicant says that pursuant to s.400A(1), the Costs Respondent’s unreasonable acts in continuing the matter, and the Costs Respondent’s unreasonable omission in not accepting the settlement offer caused the Costs Applicant to incur costs that were avoidable. 43

[37] The Costs Applicant seeks the following amount on scale as per the Fair Work Regulations 2009 – Schedule 3.1 in the sum of $10,281.20 for the entire proceeding not including this application for costs. The following table is an itemised schedule of costs:

The Costs Respondent’s case

[38] The Costs Respondent opposes the application for costs and says that at no stage did it act vexatiously or without reasonable cause. 44 It maintains that at the time of the original offer, the Costs Applicant’s application was out of time and the Costs Applicant had not yet been granted permission to be represented by a lawyer.45 The Costs Respondent submits that it did not cause any unreasonable acts or omissions in connection with the conduct or continuation of the matter.46 It submits that the Costs Applicant was granted permission to be represented on 5 December 2016.47 It further submits that on 9 December 2016, the Costs Applicant made an offer to settle the matter in the sum of $24,000, approximately $9,000 more than what the Costs Applicant was awarded.

Did the Costs Respondent respond to the application vexatiously or without reasonable cause?

[39] As indicated above, s.611(2)(a) is confined to the time at which a person makes, or responds to an application. I note that the Costs Applicant did not advance any argument to support any assertion that the Costs Respondent responded to the Costs Applicant’s unfair dismissal remedy application, vexatiously or without reasonable cause, save at [52] where the Costs Applicant says that “for reasons outlined from paragraphs 1 to 52 herein, the Respondent has vexatiously and/or without reasonable cause responded to the application made by the Respondent”. None of these matters are responsive to s.611(2)(a). I am not satisfied that the circumstances in s.611(2)(a) have been made. There is nothing to which the Costs Applicant points which would suggest the Costs Respondent’s response was vexatious in the sense that its purpose was to harass or embarrass the Costs Applicant, or gain a collateral advantage. Nor was any evidence led by the Costs Applicant directed to this assertion.

[40] There is also nothing in the submissions which points to or suggests that the Costs Respondent’s response was made without reasonable case. The Costs Respondent’s response included the following:

“3.1 What were the reasons for the dismissal?

Employee was required to train people to cover his role whilst on leave. Refusal to do this resulted in production slowing. He also convinced other employees to slow the production down even to the point of taking unauthorised breaks during overtime.

3.2 What is your response to the Applicant’s contentions?

The Applicant was notified before he left for holidays that he was not required to return due to his attitude of slowing production.

He rang here on 6/7/16 to see if we would re employ him or as he stated “does he have a job when he comes back”. I was unavailable so I rang him back and told him that there was no change to the original decision. He said he just wanted to know so he could extend his holiday another couple of weeks. No communication was made after this call.” 48

[41] As to the first matter above, the Costs Applicant, as I observed at [20] of the Decision, conceded that he had refused to train a replacement employee. As to the second, this ultimately turned on an acceptance by me of a version of events given in preference to another. It is not suggested that neither the meeting before the leave was taken nor the phone call during the leave did not occur. Nor is it suggested that even if the matters the Costs Respondent alleged had been accepted, its case would nonetheless have failed. On no account therefore, can it be said that the Costs Respondent’s response was made without reasonable cause.

[42] I therefore do not consider that there is any appropriate basis for an order for costs to be made on the grounds in s.611(2)(a).

Should it have been reasonably apparent to the Costs Respondent that the application had no reasonable prospect of success?

[43] The Costs Applicant has on a number of occasions in his submissions indicated that the Costs Respondent ought to have known that it had no reasonable prospects of success and that the Costs Applicant’s application was likely to succeed. 49

[44] I reject this submission. First, there is a difference between it being reasonably apparent that the Costs Applicant was likely to succeed and it being reasonably apparent that the Costs Respondent’s response has no reasonable prospects of success. The existence of the former does not mean the latter is made out. Secondly, it cannot be said that the Costs Respondent’s case was manifestly untenable or groundless or so lacking in merit or substance so as to be not reasonably arguable. It is insufficient in my view to point to conclusions drawn from facts found in a decision to make good an argument that it should have been reasonably apparent to the Costs Respondent that his response to an unfair dismissal remedy application had no reasonable prospect of success. That a response did not ultimately succeed does not mean that it had no reasonable prospect of success. The determination of an unfair dismissal remedy application requires the decision maker to consider all of the statutory factors that are applicable to the application. In particular, a consideration of whether the Costs Applicant’s dismissal was harsh, unjust or unreasonable is not confined to whether there was a valid reason for the dismissal. So much is clear from the enumeration of factors that must be considered by the Commission in determining whether or not a dismissal was harsh, unjust or unreasonable. 50 So much of the Costs Respondent’s case as was consistent with its initial response was, although not strong, at least arguable and turned on facts which were disputed.

[45] During the merit hearing, the Costs Respondent also relied on a further reason for the dismissal, that being that the Costs Applicant’s employment was terminated because he took unauthorised leave, the determination of which required a resolution of competing evidence and whilst ultimately the Costs Respondent’s evidence in relation to many of the allegations was either not accepted by me or was insufficient to make good the allegations, it does not follow that the response founded on those allegations was manifestly untenable or groundless or so lacking in merit or substance to be not reasonably arguable.

[46] As to the Costs Applicant’s reliance on the Jurisdictional Decision, the hearing was interlocutory in nature, I did not conclude that the Costs Respondent’s case was untenable and my observation on an interlocutory basis as to the Costs Applicant’s merit case was prefaced by the following observations:

“[31] As to the merits of the application, a hearing to consider whether time should be extended is essentially an interlocutory hearing, which does not generally permit a substantive testing of the merits of the particular application and so, in most cases the best that can be done is to take the Applicant's case at its highest and assess the merits from that perspective. That is, to look at the Applicant's case in the most favourable light and make an assessment about the merits.”

[47] Although the Jurisdictional Decision ought to have raised reasonable concerns about the strength of the Costs Respondent’s case, my conclusions therein do not found a proper basis for a conclusion that it should have been reasonably apparent that the Cost Respondent’s case had no reasonable prospect of success. I am therefore not satisfied that it should have been reasonably apparent to the Costs Respondent that his response to the Costs Applicant’s unfair dismissal remedy application has no reasonable prospect of success.

Did the Costs Respondent cause those costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter?

[48] The Costs Applicant submits that the Costs Respondent’s unreasonable acts in continuing the matter, and the Costs Respondent’s unreasonable omission in not accepting the settlement offer caused the Costs Applicant to incur costs that were avoidable. 51

[49] I do not accept the Costs Applicant’s proposition that a failure by the Costs Respondent to accept a settlement offer prior to hearing is an unreasonable act or omission. The final award of compensation was in the order of $15,051.00. The first two offers made to the Costs Respondent were in sum of $13,680. These were made before the parties’ evidentiary cases were filed. In those circumstances, I am not satisfied that at the time of making the settlement offers described above, the Costs Respondent’s refusal to accept the offers was an unreasonable act or omission.

[50] The third offer made to the Costs Respondent was in the sum of $24,000. The settlement offer was made after the Costs Applicant was successful as set out in the Jurisdictional Decision. The offer was significantly higher, than the amount which was ultimately awarded to the Costs Applicant. Having regard to the above, I am not persuaded that at the time of making the settlement offer, the Costs Respondent’s refusal to accept the offer was an unreasonable act or omission. In any event as I have earlier observed, the Costs Applicant does not appear to rely on this offer.

[51] The other matters to which the Costs Applicant points relate to the way in which the Costs Respondent conducted its case and in particular to the absence of some evidence (noted in my Decision) to support the Costs Respondent’s case. It is, with respect, a long bow to draw to suggest that an unrepresented litigant, which is unfamiliar with evidentiary requirements, weight ascribed to particular evidence and inferences that might be drawn from particular evidence, or the absence of it, should be found to have acted unreasonably because of the manner in which it conducted its evidentiary case. I am not persuaded that I should so conclude in this case.

Conclusion

[51] For the reasons given, I am not persuaded that any of the circumstances in s.611(2) or s.400(A)(1) are engaged. Consequently, there is no basis for a costs order to be made. The application for costs made under ss.400A and 611 is dismissed. An order dismissing the application is separately issued in PR593917.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<Price code A, PR593311>

 1   [2017] FWC 562.

 2   F6 – Application for Costs Submissions dated 7 April 2017 at [2].

 3   Ibid at [8].

 4   Ibid at [9].

 5   Attachment ‘A’ to F6 – Application for Costs Submissions dated 7 April 2017.

 6   [1975] 3 All ER 333.

 7   F6 – Application for Costs Submissions dated 7 April 2017 at [12], Attachment ‘A’.

 8   Ibid.

 9   F6 – Application for Costs Submissions dated 7 April 2017 at [15].

 10   Ibid.

 11   Attachment ‘B’ to F6 – Application for Costs Submissions dated 7 April 2017.

 12   F6 – Application for Costs Submissions dated 7 April 2017 at [17].

 13   Attachment ‘C’ to F6 – Application for Costs Submissions dated 7 April 2017.

 14   PN47.

 15   [2016] FWC 8611.

 16   Costs Respondent’s Submissions dated 9 May 2017.

 17   [2014] FWCFB 236.

 18   PN407.

 19   PN408.

 20   The Commission may also make an order for costs under sections 376, 400A, 401 and 780.

 21   Section 611(1).

 22   [2014] FWCFB 810.

 23   Section 611(2)(a) and (b).

 24   See Qantas Airways Limited v Carter [2013] FWCFB 1811; Nilson v Loyal Orange Trust (1997) 76 IR 180 at 181.

25 [2014] FWCFB 810 at [29].

 26   See R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473.

 27   (1991) 28 FCR 324.

 28   Ibid at 327.

 29   See Standish v University of Tasmania (1989) 28 IR 129.

 30   See Thompson and Ors v Hodder and Ors (1989) 31 IR 300.

 31   (1992) 43 IR 257.

 32   Ibid at 264-265.

 33   See Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission and Anor (2006) 156 FCR 275 at 290.

 34   Ibid at [30]-[33].

 35   See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Wodonga Rural City Council v Lewis (2005) 142 IR 188.

 36   See Baker v Salva Resources Pty Ltd (2011) 211 IR 374; Smith v Barwon Region Water Authority (2009) 187 IR 276 at [48].

 37   (2010) 241 CLR 118.

 38   Ibid at [59] - [60].

 39   F6 – Application for Costs Submissions dated 7 April 2017 at [29].

 40   Ibid at [31].

 41   Ibid at [45].

 42   Ibid at [49] – [50].

 43   Ibid at [53].

 44   Costs Respondent’s Submissions dated 30 May 2017.

 45   Costs Respondent’s Submissions dated 9 May 2017.

 46   Costs Respondent’s Submissions dated 30 May 2017.

 47   Costs Respondent’s Submissions dated 9 May 2017. Note: The Costs Applicant was granted leave to be represented on 30 November 2016.

 48   F3 – Employer’s Response dated 17 August 2017 at question 3.1 – 3.2.

 49   See for example F6 – Application for Costs Submissions dated 7 April 2017 at [31].

 50   See Section 387.

 51   F6 – Application for Costs Submissions dated 7 April 2017 at [53].