Abdul Soomro v Murray's Australia Pty Limited T/A Murray's Australia

[2016] FWC 9173

[2016] FWC 9173

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Abdul Soomro
v
Murray's Australia Pty Limited T/A Murray's Australia
(U2016/8573)

VICE PRESIDENT WATSON MELBOURNE, 22 DECEMBER 2016

Application for costs – Whether unreasonable act or omission – Whether application made vexatiously or without reasonable cause – Fair Work Act 2009 – ss.400A, 401 and 611.

Introduction

[1] This decision concerns an application for costs made by Murray’s Australia Pty Limited T/A Murray’s Australia (Murray’s) against Abdul Soomro and his representative Stephen Wilcox of Wilcox Lawyers arising from an application by Mr Soomro for relief from unfair dismissal that I dismissed on 8 November 2016. An edited version of my decision on transcript ([2016] FWC 8211) was published on 16 November 2016. An appeal against this decision (C2016/7131) was lodged by Mr Soomro.

[2] On 20 September 2016 Murray’s made a settlement offer of four weeks’ remuneration to Mr Soomro following attempts to resolve the matter by conciliation on 29 August 2016. Mr Soomro rejected this offer.

[3] On 22 November 2016 Murray’s filed an application for costs pursuant to ss.400A and 611 of the Fair Work Act 2009 (the Act) against Mr Soomro and pursuant to s.401 against Mr Wilcox. The application claimed a total of $52,377.27 incurred by Murray’s in costs and disbursements. Also on 22 November 2016 I directed parties to file written submissions as to costs. I proposed to determine the matter of costs on the papers.

Legislation

[1] The power to make an order for costs is dealt with in s.611 of the Act which provides:

“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 ofthe 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).”

[2] It is well established that an order for costs is a discretionary matter when the basis for making a costs order is established. Section 611 contains a number of separate bases for granting an order for costs. An application has been held to be made without reasonable cause if it is so untenable that it cannot possibly succeed. 1

[3] Section 400A of the Act provides:

“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.”

[4] Section 401 of the Act provides:

“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.”

Should an order for costs be made against Mr Soomro?

[5] Murray’s submits that the Commission ought exercise its discretion and order that Mr Soomro pay all of the company’s costs of the hearing pursuant to s.400A of the Act for the following reasons:

• Mr Soomro has caused Murray’s to incur costs because of Mr Soomro’s unreasonable act in connection with the conduct and continuation of this matter;

• Mr Soomro’s failure to accept the settlement offer of four weeks’ remuneration by Murray’s constituted an unreasonable act noting the circumstances of the application, the terms of the offer, and noting that the application was dismissed;

• The terms of the offer were clear in expressing the futility of the application and put Mr Soomro on notice that Murray’s would be seeking costs in the event the application was dismissed;

• Mr Soomro gave a “particularly dismissive and contemptuous response” to Murray’s settlement attempt:

“I do not propose to respond to anything raised in your letter except to say that the Fair Work Commission will not award costs in your client’s favour. Nor will I engage you in a correspondence war.”

• Mr Soomro acted unreasonably by failing to properly consider the merits of the Application and the terms of the settlement offer in light of the merits of the application; and

• Mr Soomro’s unreasonable act has caused Murray’s to incur significant costs in preparing for and attending the Fair Work Commission hearing.

[6] Murray’s further submitted that Mr Soomro should bear its costs pursuant so s.611 of the Act because Mr Soomro’s conduct in pursuing the application where it should have been reasonably apparent that he had no reasonable prospects of success. It argued that the futility of the application was demonstrated in part by the fact that Mr Soomro did not seriously dispute the occurrence of facts that led to the findings of misconduct, that many of these facts were admitted to, and that I handed down my decision in this matter immediately following the conclusion of the hearing on 8 November 2016.

[7] Mr Soomro gave evidence to the effect that his conduct did not amount to misconduct and that his actions in relation to the fellow employee were private matters that did not relate to the performance of his duties or the performance of the fellow employee’s duties. I found that his evidence was not reliable and his conduct amounted to misconduct. However I do not consider that he acted unreasonably in declining to accept the settlement offer. Although his arguments regarding the unfairness of his dismissal were not strong, I consider that his case was arguable. I do not consider that his application was made without reasonable cause or had no reasonable prospects of success.

[8] Therefore there is no basis established for making a costs order against Mr Soomro.

Should an order for costs be made against Mr Soomro’s representative?

[9] Murray’s submitted that Mr Wilcox caused it to incur costs because he encouraged Mr Soomro to continue the matter when it should have been reasonably apparent that Mr Soomro had no reasonable prospect of success in the matter. It argued Mr Wilcox’s conduct and continuation of the matter in light of Murray’s settlement offer was unreasonable.

[10] Murray’s also submitted that:

• Mr Wilcox encouraged Mr Soomro to continue the matter unnecessarily by refusing to consider a genuine offer of settlement;

• Mr Wilcox’ response to the settlement offer, drafted by Mr Wilcox, was unreasonable, unhelpful and stymied any further settlement discussions;

• Mr Wilcox is an experienced industrial advocate and it should have been reasonably apparent to him that Mr Soomro had no reasonable prospects of success in the matter; and

• Mr Wilcox was unreasonable in failing to appropriately consider and respond to the settlement offer so as to avoid both Murray’s and Mr Soomro incurring the costs associated with the preparation for and attendance at the hearing.

[11] It is easy in retrospect to submit that continuing to act for an unsuccessful applicant was unreasonable. However a representative must act in accordance with instructions. Mr Wilcox was bound to seek instructions and act in accordance with them. Clearly his client did not wish to accept the settlement offer. This was communicated in clear terms. Mr Wilcox could not reasonably be expected to do anything other than pursue the application in accordance with his instructions. I do not consider that Mr Soomro had no reasonable prospects of success in the matter or that any action engaged in by Mr Wilcox was unreasonable.

[12] Therefore Murray’s has failed to establish that Mr Wilcox acted unreasonably in respect of conduct or continuation of the matter.

Conclusion

[13] For the above reasons, the costs application by Murray’s is dismissed.

VICE PRESIDENT

Final written submissions:

Mr Wilcox on 30 November 2016.

Murray’s Australia on 7 December 2016.

 1   General Steel Industries Inc v Commissioner for Railways (NSW) (1964)112 CLR 125.

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