| [2020] FWC 2348 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Travis Shipperlee
v
Flexi Personnel Australia Pty Ltd T/A Flexi Personnel
(U2019/13250)
COMMISSIONER BISSETT |
MELBOURNE, 7 MAY 2020 |
Application for an unfair dismissal remedy – s.400A and s.611 application for costs against a party - s.401 application for costs against a lawyer or paid agent – application dismissed.
[1] On 10 February 2020 I issued a Decision 1 in which I declined to grant Mr Shipperlee an extension of time within which to make his application for unfair dismissal. Mr Shipperlee had been employed by Flexi Personnel Australia Pty Ltd T/A Flexi Personnel (Flexi Personnel). His employment was terminated on 30 September 2019. Mr Shipperlee lodged his application for relief from unfair dismissal on 27 November 2019, 58 days after the date the dismissal took effect meaning his application was made 37 days outside the time frame established by the Fair Work Act 2009 (FW Act).
[2] In seeking an extension of time Mr Shipperlee relied primarily on incapacity to make the application because of illness. In this regard he relied on a report from his treating general practitioner (GP) to explain the delay in making his application. Of this, I found that:
[37] Taken at its best the GP report provides an explanation only until 18 October 2019 as to why Mr Shipperlee had not made his application for unfair dismissal. It provides no explanation beyond that date.
[38] As to the conclusion in the report that the GP did not think Mr Shipperlee had the ‘capacity to make decisions regarding his legal affairs based on the above’ this conclusion can only be in regard to the period of treatment covered by the report – that is until 18 October 2019. There is nothing in the report that would allow me to reach any conclusion as to Mr Shipperlee’s state of mind post 18 October 2019, regardless of when the report was written. The submissions of Mr Shipperlee that I should accept the GP’s conclusion as being based on information the GP had at the time she wrote the report (that is, up until 17 December 2019) cannot be accepted. The report covers a defined period that ends at a consultation on 18 October 2019 and there is no basis to find the GP took anything further into account in making her assessment. For this reason I am not convinced that the report gives me licence to conclude that it is relevant to Mr Shipperlee’s mental state until 17 December 2019.
[39] If I did accept the submissions of Mr Shipperlee on this point I would need to find that Mr Shipperlee’s actions belied the assessment of his GP as he did make his unfair dismissal application on 27 November 2019, prior to 17 December 2019, when the Applicant would have me conclude he was not capable of making such a decision.
[40] Whilst I accept that an Applicant does not need to explain the totality of the delay in making his application, in this case Mr Shipperlee has provided no reason for any part of the delay in making his application after 21 October 2019. It was a further 37 days before Mr Shipperlee made his application and no reasonable explanation is given for any or all of that period.
[3] As to the merits of Mr Shipperlee’s case I found as follows:
[59] On the basis of the information before me I could not conclude that Mr Shipperlee’s case is totally devoid of merit. I make this observation despite there being no evidence and limited submissions before me as to the merits of the claim of unfair dismissal from the Applicant. This was a hearing for the purpose of determining an extension of time and while a determination of the merits of the case is unnecessary at this stage this does not excuse the lack of material as to the merits put before me by Mr Shipperlee. It is a matter to be considered and is relevant to my determination. It would appear that little thought has been given as to how the Commission might consider the merits of the application in the context of determining if exceptional circumstances exist that would warrant an extension of time.
[4] In deciding that exceptional circumstances did not exist such that I should consider the grant of an extension of time, I said that:
[70] I have decided that exceptional circumstances do not exist such that I should grant Mr Shipperlee an extension of time within which to make his application for unfair dismissal.
[71] I do accept that, for at least some and possibly all of the period covered by the medical report from his GP, Mr Shipperlee’s mental health condition provided an explanation for not filing his unfair dismissal application within the 21 day time period. However, this does not explain the totality of the delay. It is apparent that, towards the end of the period covered by the medical report Mr Shipperlee was engaging critically in matters related to his employment including whether to make an application for unfair dismissal and the effect of the loss of WorkCover payments on his ability to meet his rent costs. This, however, does not provide a credible explanation for the extended delay (accepting that he does not explain the totality of the delay) in making his application. The evidence does not support any explanation for a failure by Mr Shipperlee to take action to make his application any time after 18 October 2019 and before 27 November 2019 when it was finally made.
[72] The failure to provide any credible reason for the delay in making his application beyond 21 October 2019 (when it would have been within time) until it was made on 27 November 2019 and the length of that delay is fatal to Mr Shipperlee’s application for an extension of time.
[5] Mr Shipperlee’s application for relief from unfair dismissal was therefore dismissed.
[6] Flexi Personnel have now made an application for costs against Mr Shipperlee and his lawyers pursuant to s.400A, s.401 and s.611 of the FW Act.
[7] It is convenient to set out each of these sections:
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.
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.
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).
[8] Flexi Personnel says that the Commission has a general discretion to award costs under s.611 of the FW Act where an application is made without reasonable cause or where the application has no reasonable prospects of success.
[9] In this case it says that both of these conditions are satisfied.
[10] Flexi Personnel submits that Mr Shipperlee provided no supporting medical evidence that explained the delay in making his application beyond 21 days. In this regard Flexi Personnel says that the medical report only covered the period until 18 October 2019 where Mr Shipperlee had until 21 October 2019 to make his application within time. Flexi Personnel submits that Mr Shipperlee provided no explanation for the period of the delay in making his application beyond the 21 day period required by the FW Act. Further, it says that Mr Shipperlee actually had certificates of capacity that showed he was able to work for certain periods (28 September 2019 – 4 October 2019 and 16 November 2019 to 13 December 2019) and that these periods occurred prior to him making his application (on 27 November 2011). If he had capacity for work there was no reason he did not have the capacity to make an application for unfair dismissal.
[11] Flexi Personnel submits that, without the provision of any corroborating reason as to why his application was made beyond the 21 day period, Mr Shipperlee’s application was made without reasonable cause and it should have been apparent to him that his application had no reasonable prospect of success.
[12] Flexi Personnel accepts that the determination of exceptional circumstances is not a black and white issue and the finding of exceptional circumstances is a question of law. However the question of fact that was to be determined was if Mr Shipperlee had the mental capacity to file his application for unfair dismissal on time. In this regard it says that he provided no evidence as to why, post 18 October 2019, he could not have filed his application.
[13] Because of this Flexi Personnel says it incurred costs.
[14] Flexi Personnel submits that the discretion to award costs against Mr Shipperlee also exists pursuant to s.400A of the FW Act. It submits that it was an unreasonable act or omission of Mr Shipperlee to fail to discontinue his application when invited to do so. Flexi Personnel relies on correspondence from its lawyer to Mr Shipperlee’s lawyers of 23 December 2019 and 9 January 2020. 2 Mr Shipperlee’s failure to withdraw his application when invited to do so has caused costs to be incurred by Flexi Personnel.
[15] Flexi Personnel submits that its offer seeking that Mr Shipperlee withdraw his application was a “walk away” offer, that it was not an unreasonable offer and that, had Mr Shipperlee accepted it no further costs would have been incurred.
[16] Flexi Personnel also submits that an order for costs should be made against Verduci Lawyers (VL), Mr Shipperlee legal representative, in accordance with s.401 of the FW Act. Flexi Personnel submits that the necessary conditions for making an order against VL is met as it was Mr Shipperlee’s representative and it was required, pursuant to s.596 of the FW Act, to seek permission to represent Mr Shipperlee in proceedings.
[17] Flexi Personnel says that VL acted unreasonably in stating in correspondence to Flexi Personnel on 16 October 2019 that, should Flexi Personnel not agree to Mr Shipperlee’s offer of settlement, it had instructions to make an application for unfair dismissal but then not make application for unfair dismissal until 27 November 2019. Flexi Personnel submits that the language in the letter of 16 October 2019 was “unequivocal,” in that it said VL held instructions from Mr Shipperlee to commence unfair dismissal proceedings, but inconsistent with submissions were subsequently put for Mr Shipperlee at the hearing of the extension of time application where it was said that Mr Shipperlee was unable to provide instructions because he was unwell.
[18] Flexi Personnel submits that the inconsistencies in the representations of VL – that they either had instructions to file an application on 16 October 2019 or that Mr Shipperlee was incapable of providing instructions – constitute unreasonable conduct on the part of VL. Flexi Personnel also referred to transcript of the cross-examination of Mr Shipperlee in relation to the letter of 16 October 2019 where the following exchange occurred:
Is that correct? And so Verduci Lawyers have written this letter to Flexi Personnel on your behalf. Is that accurate? -Yes.
And they were acting on your instructions in the course of writing this letter? - Yes, they instructed me that they were going to write this letter and I said that’s okay. I didn’t know. 3
[19] In re-examination Mr Shipperlee, when asked if he had seen the letter before the hearing, said “I believe so. Or it was either explained to me over the phone before being sent.” 4
[20] Flexi Personnel submits that the submission of Mr Shipperlee’s lawyer at the hearing for an extension of time 5 was inconsistent with the evidence of Mr Shipperlee before the Commission. Mr Shipperlee conceded that he instructed VL to send the letter of 16 October 2019. He made a concession that he was aware of and had authorised the letter. Flexi Personnel submits that to put forward in submissions facts that had no basis on the evidence was misleading to the Commission. That such conduct is contrary to the obligations of a legal practitioner and the conduct was unreasonable.
[21] Flexi Personnel said that it is clear on the facts that Mr Shipperlee gave instructions for the letter of 16 October 2019 to be sent. In this regard it submits that the failure of VL to lodge the application on time when they had clear instructions then caused the (ultimately unsuccessful) extension of time hearing. Flexi Personnel also submits that throughout the course of the proceedings VL’s conduct lacked a degree of honesty and should have cost consequences associated with it.
[22] Further, Flexi Personnel says that it was an unreasonable act or omission of VL not to discontinue the application when it was invited to do so by lawyers for Flexi Personnel.
[23] With respect to the confidentiality 6 of the letter of 16 October 2019, Flexi Personnel submits that the privilege7 does not extend to inconsistent acts8 which it says VL engaged in (advising in the letter that it had instructions from Mr Shipperlee to commence proceedings and advice in submissions that it did not have clear instructions and had difficulty in obtaining instructions from Mr Shipperlee to file an application) and that a “without prejudice” communication can be used in costs proceedings.9 Flexi Personnel submits that both circumstances are exceptions to the general rule in the Evidence Act 1995 (Evidence Act).
[24] VL submits that the letter of 16 October 2019 sent to the lawyers for Flexi Personal contained a modest offer to settle the matter. It was clearly marked as “without prejudice”. The letter contained nothing irresponsible but clearly indicated that if the offer was not accepted VL had instructions to proceed to make an unfair dismissal application to the Commission.
[25] VL submits that the correspondence itself is the type of correspondence parties are encouraged to engage in with a view to minimising unnecessary litigation and it would be inappropriate to sanction lawyers for doing just that.
[26] VL submits that the letter of 16 October 2019 is protected by privilege. It was marked “without prejudice” and not marked “save as to costs”. It should not be relied on for the purposes of the costs application.
[27] VL submits that because the application to the Commission was not made immediately does no more than reflect the reality of commencing proceedings. Whilst instructions might be given to commence proceedings there is often still substantial work necessary to issue competent proceedings. That is, there is often work to be done between the issue of the instructions to file and that actual filing of an application. That there was a time delay between the advice in the letter of 16 October 2019 and the making of the application on 29 November 2019 is indicative that further information was necessary to enable a proper application to be made.
[28] VL submits that there is nothing inconsistent in putting an offer prior to commencing proceedings with a statement to the effect that “we have instructions to issue proceedings” and a delay in issuing those proceedings. In any event, VL submits that it may well be that instructions varied over time such that there was a reason for the delay in making the application on 27 November 2019.
[29] Mr Shipperlee submits that within the general construct of s.611 of the FW Act that each party should bear its own costs that the Commission should be slow to award costs in a jurisdictional matter where the final decision is subject to the exercise of the Commission’s discretion. Section 611(2)(a) and (b) of the FW Act provide exceptions to the general rule.
[30] The matters required to be considered by the Commission is deciding whether to grant an extension of time carry a level of discretion. Having considered those matters, which included, in this case, the mental health of the employee, the Commission is then required to again exercise a discretion in determining if those matters amounted to exceptional circumstances. In these circumstances Mr Shipperlee says that his conduct and/or approach to making the application does not fall into the exceptions to the general rule that each party should meet its own costs. That is, he says that given the wide-ranging discretion available to the Commission it cannot be found that he made his application without reasonable cause or that he should have known his application had no reasonable prospect of success. Contrary to the submissions of Flexi Personnel, Mr Shipperlee submits that it was not apparent, on the evidence available, that he would not be able to demonstrate exceptional circumstances for not making his application with the time prescribed by the FW Act such that an extension of time might be granted.
[31] Mr Shipperlee relies on the decision in Kanan v Australian Postal and Telecommunication Union 10 in support of his submission that it would be wrong to stigmatise a matter as “without reasonable cause” if success depends on an arguable point of law. In determining the extension of time he submits that Flexi Personnel agree that there was an arguable point of law as to whether exceptional circumstances existed in deciding the matter before the Commission and it therefore cannot be that the application was without reasonable cause.
[32] Further, Mr Shipperlee relies on the decision in Baker v Salva Resources Pty Ltd 11 to support his case that a conclusion that an application was made without reasonable cause should only be reached with extreme caution.
[33] Whether it should be apparent that the application of Mr Shipperlee had no reasonable prospect of success, this is a matter to be determined at the time of making application of 27 November 2019. That the application failed cannot mean that it was manifestly groundless.
[34] Mr Shipperlee also submits that his failure to agree to an offer by Flexi Personnel that he withdraw his application cannot be seen as an unreasonable act or omission in circumstances where he was suffering from physical and mental health issues. Further, he says that there was no real “offer” on the table such that it can be said it was unreasonable of him not to accept that offer. In this regard Mr Shipperlee says that Flexi Personal did not articulate that the parties would bear their own costs.
[35] Mr Shipperlee submits that the decision in Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions 12 (Ferry) relied on by Flexi Personnel is distinguishable on the facts from the matter currently before the Commission – in that matter the offer, which was a monetary offer ultimately rejected by the applicant, was made after submissions and evidence were filed. In this case no monetary offer to settle was made to Mr Shipperlee and the “offer” (such as it was) was made before any materials had been filed.
[36] As to the costs application in relation to VL, it is submitted that a relevant consideration is that the client, Mr Shipperlee, was young, vulnerable and injured which brought with it inherent difficulties in gaining clear and consistent instructions. Legal representatives are creatures of instructions having provided appropriate advice to the client and it cannot be held to account for the form of the instructions received.
[37] VL says that, in seeking costs from it, Flexi Personnel has conflated the client (Mr Shipperlee) and his lawyers (VL) as effectively being one and the same or considers that VL is standing in the shoes of Mr Shipperlee. VL says that it was Mr Shipperlee who was dismissed, Mr Shipperlee who was providing instruction and Mr Shipperlee who ultimately determined the course of his application.
[38] In this case VL submits that there is no evidence VL did not advise Mr Shipperlee as to his application, prospects of success or anything else to do with the proceedings or that it failed to act on the instructions of Mr Shipperlee.
[39] Further, the complaint that it was unreasonable for VL to not accept the offer to settle is without foundation. Whether to accept or otherwise the offer was matter for Mr Shipperlee and not VL. For these reasons there cannot have been an unreasonable act or omission by VL that caused costs to be incurred by Flexi Personnel. The application for costs against it should therefore be dismissed.
[40] Flexi Personnel says that I can rely on the “without prejudice” communication it received from VL on 16 October 2019 for the purposes of the costs application. VL says that it would not be appropriate for the Commission to do so.
[41] Whilst I note that the Commission is not bound by the rules of evidence 13 the Commission does, as a matter of good practice, take account of those rules. Whilst not strictly necessary I have considered the provisions of the Evidence Act in deciding if I should have regard to the letter of 16 October 2019.
[42] Section 131(1) of the Evidence Act states that:
(1) Evidence is not to be adduced of:
(a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or
(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
[43] Section 131(2) of the Evidence Act provides exceptions to the general rule in s.131(1). Section 131(2) relevantly states as follows:
(2) Subsection (1) does not apply if:
…
(g) evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence; or
(h) the communication or document is relevant to determining liability for costs…
[44] It seems to me apparent from this that the communication can be relied on in order to determine liability for costs. That the communication was not marked as “without prejudice save as to costs” does not appear relevant.
[45] In any event I would note that marking communication as “without prejudice” is not, of itself, enough to shield the communication from use.
[46] The exemption in the Evidence Act is explained in Cross on Evidence as follows:
…At common law without prejudice communications could only be tendered on the issue of costs if marked “without prejudice save as to costs”. However, under s 131(2)(h) any without prejudice communication, whether so limited or not, is admissible on costs. This is so even if the parties have agreed it is not to be admissible. The communication must be relevant to determining liability for the costs of the dispute which the communication is attempting to settle. 14
[47] Given the exemption in the Evidence Act I am therefore satisfied that I can have regard to the letter from VL to lawyers for Flexi Personnel of 16 October 2019. Further, I am satisfied that I should have regard to the content of the letter. Whilst not finally determinative of the matters I must decide, it is relevant and it is reasonable to consider its contents.
[48] The relevant section of the letter (and that relied on by Flexi Personnel) states:
Having regard to the above, it is our client’s position that he will be able to successfully argue that his dismissal was unfair and in breach of the [Fair Work] Act.
…
We have been instructed to seek the sum of [XXX], be paid to our client, by way of compensation due to him for the unfair dismissal.
If payment of the said sum is not made to our trust account by Tuesday 22nd October 2019, we have instructions to proceed with an application to the Fair Work Commission, without further notice.
[49] I am therefore satisfied that I can have regard to this part of the “without prejudice” communication from VL to Flexi Personnel’s lawyers for the purposes of the costs application now before me. For this reason I do not need to determine if the communication is necessary to avert any misleading of the Commission.
[50] Needless to say that offer was not accepted. It is now established that it was 27 November 2019 before the application for unfair dismissal was made.
[51] The provisions of s.611 of the FW Act are set out above. The relevant matters to determine are if the application was made without or reasonable cause or if it should have been reasonably apparent to Mr Shipperlee that his application had no reasonable prospect of success.
[52] Even if I find so, it does not necessarily mean that costs will follow. The decision to award costs is a discretionary decision made within the broad context that parties to matters before the Commission should bear their own costs.
[53] The principles relevant to the consideration of the award of costs under s.611 of the FW Act was considered recently by a Full Bench of the Commission in Richardson v MBP (WA) Pty Ltd as trustee for the Sun Laundry Services Unit Trust 15 The Full Bench said:
[57] We will now consider the question of whether the application was made ‘without reasonable cause’. The decision of Keep v Performance Automobiles Pty Ltd [2015] FWCFB 1956 approved the approach in Church 16 and helpfully summarised the principles relevant to determining whether an application is made without reasonable cause:
“(i) The power to order costs pursuant to s.611(2)(a) should be exercised with caution and only in a clear case.
(ii) 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.
(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.
(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed.’”
[58] In Kanan v Australian Postal and Telecommunications Union, Wilcox J stated:
“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.” 17
…
[60] We now turn our minds to the question of whether, under s.611(2)(b) of the Act, ‘it should have been reasonably apparent’ to the Appellant that the appeal application was one that had ‘no reasonable prospect of success’. In Baker v Salva Resources Pty Ltd (2011) 211 IR 374, the Full Bench summarised the operation of s.611(2)(b) of the Act as follows (footnotes omitted):
“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.”
[54] I am not satisfied in this case that Mr Shipperlee made his application without reasonable cause. I have reached this conclusion as I do not consider, on the basis of the facts known to Mr Shipperlee at the time he made his application it could not be said that his case had no substantial prospect of success. I say this for two reasons.
[55] Firstly, an applicant, in seeking an extension of time within which to make an application, is not required to explain the totality of the period of the delay in making the application. 18 Exceptional circumstances may be a single exceptional event or a series of events that together are exceptional19 but the assessment of whether exceptional circumstances exist requires a consideration of all the relevant circumstances under s.394(3) of the FW Act.20 Whilst Mr Shipperlee’s failure to explain the totality of the delay was fatal to his application he could not have known with certainty how the Commission’s discretion might be exercised given the facts of the case.
[56] Second, I do not consider the application to be so obviously untenable that it could not succeed. Mr Shipperlee had a reason for the delay in making his application. In this respect I accept that Mr Shipperlee is young. There is no dispute that he was suffering from a physical medical condition (in addition to his mental health to the extent covered by the medical report from his doctor). It is not unreasonable, on the basis of this information that Mr Shipperlee considered he had a reasonable reason for the delay and, if that was accepted, exceptional circumstances could be found to exist and he be granted an extension of time.
[57] Whether exceptional circumstances did exist is a question of law. Whether the fact of his mental capacity was enough to sway the question of the finding of exceptional circumstances was not a foregone conclusion. On Mr Shipperlee’s version of the facts, as I said, exceptional circumstances may have been found.
[58] Further, I am not satisfied that it should have been reasonably apparent to Mr Shipperlee that his application had no reasonable chance of success. There is nothing to suggest his application was manifestly untenable.
[59] For these reasons the application for costs pursuant to s.611 of the FW Act is dismissed.
[60] In considering this application it is necessary to first determine if Mr Shipperlee engaged in an unreasonable act or omission and then if that conduct caused costs to be incurred by Flexi Personnel.
[61] Flexi Personnel rely on the refusal of Mr Shipperlee to accept its offer to withdraw his application as an unreasonable act or omission on his part that caused it to incur costs.
[62] I am not convinced the decision in Ferry 21 lends support to the submissions of Flexi Personnel. In Ferry Commissioner Williams was considering whether it was unreasonable for Mr Ferry to have rejected the respondent’s settlement offer. Commissioner Williams found that, on the basis of the reasons for decision, that at the time the offer to settle was made Mr Ferry had within his knowledge sufficient information to conclude that he had little chance of succeeding with his application.22
[63] In particular Commission Williams said Mr Ferry knew:
• That he required authorisation to enter the Respondent’s premises out of hours;
• He was not permitted to remove property without permission;
• He did enter the Respondent’s property without authorisation and proceeded to remove equipment;
• He was not honest when challenged about the matter. 23
[64] Importantly, however, Commissioner Williams placed some store on the fact that Mr Ferry, at this stage, was fully aware of the Respondent’s case against him:
[70] In addition to knowing the above facts as he did, Mr Ferry would also have been assisted when considering the respondent’s settlement offer, by the fact that he already had received the respondent’s witness statements, supporting documents and outline of submissions that had been filed in preparation for the hearing.
[65] This can be contrasted to the matter before me. There is no submission made that Mr Shipperlee was aware of the Respondent’s case such that he might have understood the weaknesses in his own case at the time he refused the “walk away” offer. I am not convinced, given this key factual difference, that the decision in Ferry assists Flexi Personnel.
[66] It is not apparent to me that Mr Shipperlee engaged in any unreasonable act or omission in refusing to walk away from his application. To the extent that Flexi Personnel says that Mr Shipperlee should have understood that the offer from it meant he could walk away without incurring any costs if he did withdraw his application, there is no evidence before me that Mr Shipperlee was or was not so aware. Further, there is no evidence that Mr Shipperlee had some ulterior motive in pursing his application other than that he believed he had been unfairly dismissed.
[67] On the basis of the material before me I cannot conclude that it was unreasonable act or omission by Mr Shipperlee to accept the walk away offer.
[68] For these reasons the application for costs pursuant to s.400A of the FW Act is dismissed.
[69] This is an application against VL – lawyers for Mr Shipperlee. A determination of this application requires a consideration of whether VL encouraged Mr Shipperlee to commence or continue his application when it should have been apparent that he had no reasonable prospect of success or if an unreasonable act or omission of VL caused costs to be incurred.
[70] I deal with the second matter first.
[71] In its submissions Flexi Personnel says that VL caused costs to be incurred by “failing to accede to the offer [from lawyers for Flexi Personnel] to withdraw the Application.” However, I am not convinced that this was a decision for VL to make. It did not have authority to unilaterally withdraw the application. Ultimately, it could advise Mr Shipperlee on the conduct of his matter and pass to him any offers made by Flexi Personnel. Had it failed to do so its conduct might be seen as an unreasonable act or omission that caused costs to be incurred. There is, however, no evidence that this was the case. The only evidence in this case is that the offer of Flexi Personnel was rejected.
[72] The unreasonable act that Flexi Personnel rely on is the inconsistent statements of VL: firstly that they had instructions from Mr Shipperlee to commence proceedings should the offer to settle of 16 October 2019 not be accepted and second that they could not gain instructions from Mr Shipperlee as set out in the submissions for Mr Shipperlee filed with the Commission in relation to the extension of time.
[73] In this case, given the lack of contrary evidence, I accept the submissions of VL. Whist at the time of giving instructions for the writing of the letter, Mr Shipperlee had given instructions to issue proceedings in the Commission for unfair dismissal, his instructions were not concluded such that VL could make a competent application to the Commission. Having reached this conclusion however VL would be well cautioned to ensuring it has complete instructions if it is to put such a proposition to another party. To the extent that it did not have complete instructions from Mr Shipperlee it does raise a question as to how it could have provided complete advise to Mr Shipperlee as to his options, but this is not a matter traversed in the costs hearing nor one I need delve into.
[74] The evidence before the Commission is that on 18 October 2019 Mr Shipperlee was on medication that could have affected his cognitive state. He had, to that date, already displayed some ambivalence about making an application for unfair dismissal. With this in mind it is plausible that Mr Shipperlee did not provide the information necessary to complete an application. I do not state this as a fact as the lack of evidence does not allow such a finding to be made. I would observe however that I did accept that, in periods where he was fit for work prior to making his application, it is inexplicable for Mr Shipperlee to suggest he could not complete his application or provide instructions to allow that to be done. Given the lack of evidence however, I draw no conclusions as to the actions of VL at these times.
[75] The further unreasonable or inconsistent act that Flexi Personnel relies on is in relation to submissions of Mr McIntyre, representing Mr Shipperlee in the extension of time hearing, which it says were misleading and were contrary to the legal practitioners’ obligation to conduct himself with candour and honesty.
[76] In submissions in reply Mr McIntyre said, in relation to the letter of 16 October 2019 and the apparent instructions of the Applicant that the application be made, that:
MR MCINTYRE: I am not suggesting that, but I am suggesting that - I’m simply saying that the letter says that they had instructions and, look, maybe the lawyer did have instructions at a point in time to issue, but what I am saying is that it requires - the act of filing an application requires the applicant to sign the application and to go through it.
THE COMMISSIONER: No, it doesn’t require the applicant to sign. The applicant’s representative can sign.
MR MCINTYRE: Well, in my submission, it would require, at the very least, the application to - I am making submissions here without actually having personal knowledge of the matter, I accept that, but it may be that the application, for whatever reason, wasn’t in a position to be ready to be filed, for whatever reason, I don’t know, but the representation was not made by the applicant and what that is attempting to do is to visit that on the applicant when it was made by the applicant’s lawyer, for whatever reason. I simply can’t take the point much further than that. 24
[77] I am not prepared to conclude, on the basis of this, that Mr Shipperlee’s lawyer was misleading in the submissions he made. Mr McIntyre was trying to find some explanation as to what had occurred. It cannot be taken from his qualified statements that he had no personal knowledge of the matter, that he deliberately sought to mislead the Commission but rather that he attempted not to by placing the qualifications on what he said. It would have been wiser for Mr McIntyre not to go down that path but I am not convinced that it was deliberately misleading. In any event, the submissions of Mr McIntyre at that point in time could not have caused much, if any, in costs to Flexi Personnel.
[78] Further, I am not satisfied that VL encouraged Mr Shipperlee to make or continue with his application when it should have been reasonably apparent that the application had no reasonable prospect of success. For the same reasons given above, I cannot conclude that it should have been reasonably apparent that the case had no reasonable prospect of success.
[79] That a case might be complex or difficult or require some nuanced argument does not mean it is without prospect of success.
[80] The application for costs pursuant to s.401of the FW Act is therefore dismissed.
[81] In reaching my conclusion not to award costs as sought by Flexi Personnel I would however comment that the ambivalence of Mr Shipperlee was not exemplary conduct. Time limits are imposed on making an application for unfair dismissal to the Commission for a reason. A request for an extension to that time is not and should not be treated as a fait accompli – as Mr Shipperlee would have found. It is to be hoped that VL warned Mr Shipperlee of the consequences of continuing his application after receipt of the letters of 23 December 2019 and 9 January 2020 from lawyers for Flexi Personnel who made it clear they would seek costs. In this regard it is fortunate for Mr Shipperlee and VL that I have found the application without merit.
[82] The application of Flexi Personnel is dismissed. An order 25 to this effect will be issued shortly.
COMMISSIONER
Appearances:
J. Hooper, of counsel, for Mr Shipperlee and Verduci Lawyers.
J. Zhou, of counsel, for flexi Personnel Australia Pty Ltd.
Hearing details:
2020.
Melbourne, by telephone:
April 20.
Printed by authority of the Commonwealth Government Printer
<PR719123>
2 See attachments A-1 and A-2 to the submissions for the Respondent dated 11 March 2020.
3 Transcript of proceedings dated 24 January 2020 at PN202-203.
4 Ibid at PN233.
5 Ibid at PN504.
6 This matter was raised in the hearing of the application for an extension of time but admissibility in those proceedings was not ruled upon.
7 Evidence Act 1995, s.131(1).
8 Ibid, s.131(2)(g).
9 Ibid, s.131(2)(h).
10 (1992) 43 IR 257.
13 Fair Work Act 2009, s.591.
14 Cross on Evidence, s.7.
16 Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810.
17 (1992) 43 IR 257, at pp.264-265.
18 Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters, [2018] FWCFB 901.
19 Nulty v Blue Star Group Pty Ltd, [2011] FWAFB 975.
20 Stogiannidis v Victorian Frozen Foods Distributors Pty Ltd t/as Richmond Oysters, [2018] FWCFB 901.
22 Ibid at [64].
23 Ibid at [65]-[70].
24 Transcript of proceedings dated 24 January 2020 at PN502-504.