AC Butchery Pty Ltd v Robert Cosworth
[2011] FWA 2275
•14 APRIL 2011
[2011] FWA 2275
The attached document replaces the document previously issued with the above code on 14 April 2011. The section of the Fair Work Act and party details in the preamble of the document have been amended.
Vicki Ashwin, for Wendy Burgess
Associate to Commissioner Thatcher
Dated 18 April 2011
[2011] FWA 2275 |
|
DECISION |
Fair Work Act 2009
s.611—Application for costs
AC Butchery Pty Ltd
v
Robert Cosworth
(U2010/14483)
COMMISSIONER THATCHER | SYDNEY, 14 APRIL 2011 |
Costs sought against employee - no reasonable prospect of success - application was discontinued after conciliation conference and before employee submitted material in response to jurisdictional objection - limited material for assessment - costs application lodged prior to discontinuance of matter - application dismissed as premature (s.402)
[1] A C Butchery Pty Ltd (Butchery) is seeking an order by Fair Work Australia (FWA) for costs under s.611 of the Fair Work Act 2009 (the Act) against Robert Cosworth in relation to his application for an unfair dismissal remedy under s.394 of the Act, which he discontinued prior to the hearing of a jurisdictional objection by Butchery on the grounds that Mr Cosworth had not been an employee.
Background
[2] In brief, the circumstances leading to the hearing of the costs application are as follows:
(a) On 25 November 2010 Mr Cosworth made a s.394 application (Form F2). The date of termination was 12 November 2010.
(b) On 15 December 2010 Butchery lodged a Form F3 (Employer’s response to application for unfair dismissal remedy). The form stated that Mr Cosworth could not bring the application as he was not an employee of Butchery.
(c) On 16 December 2010 the parties engaged in a telephone conciliation conference with a FWA conciliator, the aim of which was to assist the parties reach a mutually agreed resolution of the application. The matter did not settle.
(d) On 13 January 2011 Butchery’s jurisdictional objection was listed for hearing by a FWA member on 18 February 2011. Amended Directions required Butchery to file with FWA and serve on Mr Cosworth by 4 February 2011 an outline of submissions and any witness statements and other documentary material on which it intended to rely. Mr Cosworth was directed to lodge similar material in opposition to the jurisdictional objection by 15 February 2011.
(e) On 4 February 2011 Butchery (represented by its lawyers) filed with FWA and served on Mr Cosworth:
(i) an outline of its submission that Mr Cosworth had not been an employee of Butchery which asserted that he had either been an agent, employee or director of Balance I T Pty Ltd (Balance), which had been contracted to provide bookkeeping and related services to Butchery. 1
(ii) Signed statements by:
• the sole Director of Butchery;
• the General Manager of Butchery;
• Butchery’s external accountant and tax agent.
(iii) Documents purportedly being a selection of invoices lodged by Balance with Butchery for services rendered and EFT remittance advices and some illegible MYOB computer printout pages.
(f) Also on 4 February 2011, Butchery’s lawyers lodged with FWA:
- (i) The application for costs (Form F6).
(ii) Applications for orders requiring the production of documents by Mr Cosworth and Balance.
(g) On 8 February 2011 Mr Cosworth lodged with FWA a Form F50 (Notice of Discontinuance). 2
(h) On 10 February 2011 the listing of the jurisdictional objection was cancelled and the costs application was listed for hearing by FWA on 18 March 2011. Butchery’s applications for orders requiring the production of documents by Mr Cosworth and Balance either lapsed or were not pressed.
(i) Each of the parties filed one page submissions in respect of these costs proceedings - Butchery on 24 February 2011 and Mr Cosworth on 10 March 2011.
Submissions
[3] The submissions on behalf of Butchery in support of its costs application can be summarised as:
(i) The material on which Butchery relies is the material it lodged in support of its jurisdictional objection. 3 Also Butchery provided an ASIC & Business Names organisational search on Balance.
(ii) The material establishes that Mr Cosworth was not an employee of Butchery. It is the only evidence before FWA and it should not be rejected as it is not far-fetched or fanciful. On the available evidence, there is no arguable case at law for Mr Cosworth’s application because, not being an employee, he was not entitled to make an unfair dismissal application.
(iii) As indicated in its Form F3, Balance was contracted to perform bookkeeping and related services to Butchery until 12 November 2010, when Butchery terminated Balance’s services. Mr Cosworth was a servant, agent or director of Balance which provided services to other organisations and not exclusively to Balance.
(iv) All invoices for services provided to Butchery by Mr Cosworth were GST tax invoices in the name of Balance and payments were made to Balance.
(v) Butchery has never paid Mr Cosworth wages, sick leave, holiday pay or long service leave.
(vi) Butchery has never deducted PAYE tax for Mr Cosworth, who has never requested a group certificate.
(vii) The costs sought were up until the discontinuance of Mr Cosworth’s application. 4
[4] By relying only on the ground that Mr Cosworth was not its employee, it seems that Butchery does not seek to argue that, if notwithstanding its objection he was its employee, his application for an unfair dismissal remedy had no reasonable prospect of success.
[5] The submissions by Mr Cosworth in respect of Butchery’s costs application can be summarised as:
(a) He worked full time for Butchery for a period of ten and a half years and always considered himself to be an employee.
(b) He was dismissed without warning. He believed he had a genuine and righteous unfair dismissal claim.
(c) He had not received legal advice as he could not afford it. He was unemployed.
(d) He left the conciliation conference with knowledge that his application may prove complex/difficult and costly and that the jurisdictional objection could require legal representation.
(e) He lodged the Notice of Discontinuance on 7 February 2011, which was well before the date of the hearing on 18 February 2011.
(f) The fact that the conciliator did not dismiss his application proves that, in the conciliator’s opinion, his application did not breach s.587.
(g) He was told there would be no costs involved in making his application by FWA staff at the time he lodged his application and following the conciliation conference.
[6] In relation to subparagraph 5(f) above, it appears that Mr Cosworth misunderstands the role of a conciliator. A conciliator is an employee and member of the staff of Fair Work Australia (refer to s.670 of the Act) and has no powers to dismiss applications under the Act. When s.587 5 refers to FWA it is referring to members of FWA (refer to s.612(1) and the definition of ‘FWA Member’ in s.12 of the Act). Also, it appears from subparagraph 5(g) that Mr Cosworth may not understand the difference between fees (associated with the making of applications) and costs (for which he could become liable).
Section 611
[7] Section 611 of the Act prescribes:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 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] The provisions of the Explanatory Memorandum to the Fair Work Australia Bill 2009 which relate to the clause that was to become s.611 state:
“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 prospect of success.” (emphasis added)
[9] Thus subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. When FWA is satisfied that a prescribed circumstance exits, FWA is provided with a discretion to require a party to bear some or all of the costs of another party.
[10] Butchery’s costs application relies on paragraph 611(2)(b). 6 Consideration of the application involves:
(a) Whether FWA is satisfied that it should have been reasonably apparent to Mr Cosworth that his application had no reasonable prospect of success; and
(b) Should FWA be so satisfied and its jurisdiction be enlivened, the exercise of a discretion as to whether or not Mr Cosworth should bear some or all of Butchery’s costs in relation to his application as an exception to the general rule that a person must bear their own costs in relation to a matter before FWA.
[11] For the purposes of s.611(2), in order to be ‘satisfied’ FWA must make an assessment and arrive at the required conclusion on the balance of probabilities.
[12] The term ‘reasonably apparent’ means that in undertaking its assessment FWA must act objectively. In this case, this means that FWA must form its own opinion as to whether it would have been apparent to a reasonable person in the position of Mr Cosworth (i.e., with the knowledge that was known or ought reasonably to have been known by Mr Cosworth) that his application had no reasonable prospect of success. This objective assessment does not exclude consideration of matters of impression or interpretation as perceived by Mr Cosworth or his motivations. However FWA cannot, without more, rely on such matters as that would be to apply a subjective test. Rather FWA must, in considering matters such as views and motivations, apply an objective test by assessing their reasonableness and not rely on any that are unreasonable. 7
[13] In Mittagong Sands Pty Limited T/A Cowra Quartz v Wayne Stuart Walker 8 I examined case law relevant to whether an application has no reasonable prospect of success. I have concluded that:
(a) the criteria ‘no reasonable prospect of success’ in paragraph 611(2)(b) is lower and wider than the expression ‘without reasonable cause’ referred to in paragraph 611(2)(a), which is similar to the test traditionally applied by a court to summarily dismiss actions. 9
(b) FWA is required to form an opinion as to whether the application had a reasonable prospect of success, not to undertake an assessment of whether a certain and concluded determination could be made that the proceedings would necessarily fail.
(c) circumstances which satisfy the ‘without reasonable cause’ test would be likely to satisfy the ‘no reasonable prospect of success’ criterion, but the reverse would not necessarily apply. The test in paragraph 611(2)(b) does not of necessity require that the proceedings were hopeless or bound to fail (by applying a test such as whether an application is manifestly untenable or groundless).
(d) a similar approach should be taken by FWA to the construction of the expression ‘no reasonable prospect of success’ as was adopted by the majority of members of the High Court in Spencer v Commonwealth of Australia 10 in respect of the term ‘no reasonable prospect’, namely:
“No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is ‘no reasonable prospect’. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like ‘no reasonable prospect’ is to be avoided. ... Rather, full weight must be given to the expression as a whole. “ 11
(e) it is a matter of judgement, sometimes of fine judgement, in all of the circumstances of a particular case whether an application or response had no reasonable prospect of success.
(f) an assessment of whether an application or response had no reasonable prospect of success should be undertaken with caution, particularly when the matter had not been determined by FWA and questions of fact and issues of law are important and in dispute.
[14] In respect of FWA’s discretion, unlike the situation in most litigation proceedings where ‘costs follow the event’ and where a finding in favour of the successful party usually controls the exercise of the discretion, in this jurisdiction it does not necessarily follow that, if FWA is satisfied that either of the limited circumstances in paragraphs 611(2)(a) & (b) apply, the discretion will be exercised. As stated by theFull Bench in Brazilian Butterfly Pty Ltd v Alissia Charalambous 12in relation to a similar provision under former legislation:
“[4] The power to award costs conferred by s.170(2) is clearly discretionary in nature. It provides that where the Commission is ‘satisfied’ of certain matters then the Commission ‘may’ make an order for costs. [See Kurc Nominees v. Saddington, PR966909, Lacy SDP, Hamilton DP, Cribb C, 10 March 2006, at paragraphs 23-24] In Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [(2000) 203 CLR 194] the High Courtobserved that: [at p 204 per Gleeson CJ, Gaudron and Hayne JJ]
‘Discretion’ is a notion that ‘signifies a number of different legal concepts’. In general terms, it refers to a decision-making process in which ‘no one [consideration] and no combination of [considerations] is necessarily determinative of the result.’ Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment. (footnotes omitted)”
[15] When FWA exercises its discretion to order that a party bear certain costs of another party, it has a further discretion to decide whether the costs to be borne are some or all of the costs of the other party (on a part-party or indemnity basis).
Finding of fact
[16] FWA is required to act judicially. Therefore I must act on the material that is before FWA, taking account of relevant considerations and not acting on irrelevant considerations. As stated by Deane J in Australian Broadcasting Tribunal v Bond & Others: 13
“3. If a statutory tribunal is required to act judicially, it must act rationally and reasonably. Of its nature, a duty to act judicially (or in accordance with the requirements of procedural fairness or natural justice) excludes the right to decide arbitrarily, irrationally or unreasonably. It requires that regard be paid to material considerations and that immaterial or irrelevant considerations be ignored. It excludes the right to act on preconceived prejudice or suspicion. Arguably, it requires a minimum degree of “proportionality” (cf the CCSU Case, at p 410). When the process of decision-making need not be and is not disclosed, there will be a discernible breach of such a duty if a decision of fact is unsupported by probative material. When the process of decision- making is disclosed, there will be a discernible breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact. Breach of a duty to act judicially constitutes an error of law which will vitiate the decision.”
[17] Where costs applications are made after FWA has determined a matter, FWA is assisted in its assessment of whether the application/response of the party against whom costs are sought had no reasonable prospect of success by having regard to the submissions the party advanced and the evidence the party adduced. Such an assessment is based on whether the facts as found should have been known by a reasonable person in the position of the party against whom costs are sought. 14 However in these proceedings there has been no determination by FWA and no findings made by FWA.
[18] If the current circumstances had arisen under the Workplace Relations Act 1996 the tribunal may have been assisted in making its assessment by the certificate issued by the Commission. Under that legislation the tribunal was required to attempt to settle an unfair dismissal application by conciliation and, when it was satisfied that all reasonable attempts to settle the matter by conciliation were or were likely to be unsuccessful, it was obliged to indicate to the parties its assessment of the merits of the application and as a matter of discretion could recommend to an applicant not to pursue a ground of the application. 15 In making its decision on a costs application the Commission could have regard to any certificate issued or advice given and whether a party pursued a course of action contrary to any such certificate or advice.16 No comparable provisions exist under the Act where, following an administrative and confidential conciliation by a member of the staff of FWA, the file comes to the FWA member without knowledge of anything the staff member may have said during the conference.17
[19] Notwithstanding these limitations, in unfair dismissal proceedings FWA can still make an order for costs where there has been no hearing on the merits and the applicant no longer wishes to proceed with the application. 18
[20] An obvious starting point in this matter would be to consider the case that Mr Cosworth intended to advance in support of his application. The next step would be to assess objectively the prospect of success of the application taking account of the material provided by Mr Cosworth and Butchery, the undisputed facts or contentions and the bases of the facts and contentions in dispute.
[21] The material advanced by Mr Cosworth on which I must commence my assessment of whether or not his application had no reasonable prospects of success amounts to:
(a) the following two sentences in his one page written submissions in response to Butchery’s costs application:
“I worked full time for Butchery for a period of ten and a half years.
I always considered myself to be an employee.”
(b) the Form F2 19 which, in relation to the reasons given by the employer for dismissal, states:
“No reasons were given. I was simply told my services were terminated. I was not given any Letter of Dismissal or Separation Certificate.”
[22] Mr Cosworth’s submission that he always considered himself to be an employee is of the nature of an opinion or impression. In making my assessment I cannot rely only on his opinion or impression as that would be to apply a subjective test. Rather I am required to apply an objective test by assessing the reasonableness of his view.
[23] Of course, it is not the case that Mr Cosworth, after being given adequate opportunity, failed to comply with FWA directions in respect of Butchery’s jurisdictional objection. If that had been the case, his failure to answer Butchery’s material may have suggested that his application had no reasonable prospect of success.
[24] Given the paucity of the material advanced by Mr Cosworth, I must make the assessment in relation to the criteria in paragraph 611(2)(b) in circumstances where almost all of the relevant material was lodged by Butchery in support of its jurisdictional objection.
[25] In considering Butchery’s material I am not undertaking some mini-hearing or making some hypothetical determination in relation to its jurisdictional objection or Mr Cosworth’s application. FWA cannot deal with a contest between the parties that has not occurred. To expect the parties to engage in that contest during costs proceedings would be to burden them with the costs of litigation which have been avoided by the discontinuance of the unfair dismissal application. Further, whilst the material to which I have referred may be indicative it is not determinative and I am mindful that the prospects of success of the objection or and application may not have become clear until oral evidence was adduced.
[26] Section 591 of the Act prescribes that:
“591. FWA is not bound by the rules of evidence and procedure in relation to a matter before it (whether or not FWA holds a hearing in relation to the matter).”
[27] It has long been the practice of the tribunal to treat as evidence assertions not made, and material not received, under oath, in circumstances where such assertions and material are not contested. This practice was the subject of favourable comment by the High Court in The Queen v. Commonwealth Conciliation and Arbitration Commission; Ex parte The Melbourne and Metropolitan Tramways Board. 20
[28] As might be expected, Butchery’s material (on which it asks me to rely) goes in favour of a finding that Mr Cosworth was not an employee of Butchery and was not entitled to make his application. I agree with Butchery that its material is not far-fetched or fanciful. I do not intend to disregard it. If I was to accept without qualification the material as evidence and make an assessment on whether Butchery’s jurisdictional objection had reasonable prospects of success, I would arrive at a positive conclusion. However that does not equate to the test to be applied under paragraph 611(2)(b).
[29] However, it could hardly be said that the material was uncontested, given that Mr Cosworth lodged the Notice of Discontinuance before he was required to respond to the material.
[30] Given all of the circumstances, is the material before FWA sufficient for me to be satisfied that Mr Cosworth’s application had no reasonable prospect of success?
[31] It is not contested that Mr Cosworth performed work for Butchery over an extended period. But it is trite to say that does not make Mr Cosworth its employee.
[32] The common law of employment in the modern era rests upon contract. In Byrne v Australian Airlines 21 McHugh and Gummow JJ observed:
“The evolution in the common law as to the relationship of employment has been seen as a classic illustration of the shift from status (that of master and servant) to that of contract (between employer and employee).”
[33] Thus a finding that Mr Cosworth was an employee of Butchery would necessitate the partyies having entered into an enforceable contract of employment which established an employment relationship between them. If Mr Cosworth’s view is correct they had entered into a contract of service. If Butchery’s submission is correct Mr Cosworth performed the work by reason of its contract for services with Balance.
[34] The existence of a contractual relationship and an employment relationship in any given set of circumstances is ultimately a question of law. 22
[35] Although a contract may be entered into with a minimum of formality there are essential elements required for the formation of an enforceable contract of employment. These were considered by a Full Bench of the Commission in Advanced Australian Workplace Solutions Pty Ltd (Fox v Kangan Batman TAFE). 23 The Full Bench referred with approval to Macken, McCarry & Sappideen’s The Law of Employment. The 2009 edition of that text24 states:
“[4.20] Although the contract of employment may be entered into with a minimum of formality, the law holds that before any simple contract is enforceable it must be formed so as to contain various elements. These are:
1. There must be an ‘intention’ between the parties to create a legal relationship, the terms of which are enforceable.
2. There must be an offer by one party and its acceptance by the other.
3. The contract must be supported by valuable consideration.
4. The parties must be legally capable of making a contract.
5. The parties must genuinely consent to the terms of the contract.
6. The contract must not be rendered ineffective by reason of conduct which is illegal or contrary to public policy.” 25
[36] Of course, as stated by Marshall J in Damevski: 26
“... as discussed in the relevant chapter of ‘The Law of Employment’ which was the source for the list of prerequisites, those elements of contract are to be applied subject to the various nuances of contract law.”
[37] However, in respect of a contractual relationship dealing with work, whilst those elements are prerequisites for an enforceable contract, they do not, of themselves, establish an employment relationship.
[38] Whether an employment relationship exists depends on the proper characterisation of the contractual relationship between the parties. Certainly where there is ambiguity of the contract or inconsistency in what is evidenced by the facts, consideration of whether a contract is that of an employment relationship necessitates a consideration of the entire factual matrix. The labels used by the parties to describe their relationship are relevant to determining that relationship but not conclusive. 27
[39] The complexity of whether a relationship to perform work is an employment relationship is evidenced by the decision of the Full Federal Court in Damevski that, notwithstanding the existence of a written contract of employment, the Full Bench, in finding that an employment relationship existed, erred in not looking beyond the documentary evidence to consider the entire factual matrix. 28 In that case, the purported employer in the written contract was found to be the agent of the real employer with whom, based on the conduct of the parties, the employee had an implied and informal contract of employment.
[40] Whilst Butchery submitted that on the available evidence I should find that Mr Cosworth was not its employee, it did not go so far as to submit that the material it has lodged made its jurisdictional objection unanswerable. Had that been the case it could have been a reason to find that Mr Cosworth’s application was made ‘without reasonable cause’ (as referred to in paragraph 611(2)(a)). Of course if that test had been satisfied it would follow that the lesser test in paragraph 611(2)(b) would be satisfied.
[41] Rather, the issue is whether I can be satisfied of the lesser and wider test that Mr Cosworth’s application had no reasonable prospect of success on the material before me, namely the little-to-no relevant material lodged by Mr Corworth (as referred to in paragraph 21) and the material lodged by Butchery in support of its jurisdictional objection (as referred to in subparagraphs 2(b) and (e)) which I do not consider to be uncontested, and in Butchery’s submissions (as referred to in paragraph 3).
[42] Because of:
(a) the nature of the essential elements required for the formation of an enforceable contract of employment;
(b) the possibility that a contract of employment can be implied and informal;
(c) the necessity to consider the entire factual matrix in establishing whether an employment relationship exists between contracted parties, in relevant circumstances, such as where there is ambiguity in the contract or an inconsistency in relevant evidence;
(d) the caution that must be exercised to ensure that FWA does not err by failing to look beyond the documentary evidence when the circumstances require this,
the question of whether or not someone who performs work for another is an employee is by no means straight forward.
[43] After considering all of the relevant material before FWA, I have concluded that I am not sufficiently confident as to be satisfied that it would have been apparent to a reasonable person in the position of Mr Cosworth (with the knowledge that was known or ought reasonably to have been known by him) that Mr Cosworth’s application had no reasonable prospect of success for the reason that he was not an employee of Butchery.
[44] In making that assessment, the factors that have given me sufficient doubt so as not to be satisfied that Mr Cosworth’s application fell within the criterion of ‘no reasonable prospect of success’ include:
(a) Mr Cosworth made no concession that he was not an employee of Butchery. He expressed a contrary view, although the reasons for his always considering himself to be an employee has not been made known to FWA and are, therefore, not capable of objective assessment.
(b) Whilst Butchery asserted it had contracted Balance to provide it with bookkeeping and related services, no such contract for services was provided to FWA.
(c) The most recent of the purported selection of EFT remittance advices from Butchery to Balance for invoices lodged by Balance with Butchery is dated 9 May 2007, more than 3 years before the termination of Mr Cosworth’s services.
(d) The weight that can be given to the statements by the three individuals which Butchery provided in support of its jurisdictional objection is lessened by the statements not being sworn by the persons who purportedly made them (as well as Mr Cosworth having no opportunity to subject the persons to cross-examination).
(e) The statement of the General Manager of Butchery refers to Mr Cosworth working for Butchery ‘as a contractor doing our paperwork and bookkeeping’. The statement of the Director of Butchery states that: ‘It was my understanding that Robert Cosworth was employed by Balance I.T. Pty Ltd to provide my company with bookkeeping services.’ There is an inconsistency. I am in no position to consider the entire factual matrix.
(f) The statement of Butchery’s General Manager referred to Balance as Mr Cosworth’s ‘wife’s company’. Mrs Cosworth has been a director of Balance since September 2000. There is potential for confusion between Mr Cosworth’s status and his wife’s business.
(g) Whilst Mr Cosworth has been a director of Balance since mid-2008 that does not prevent the possibility he was also an employee of Butchery.
(h) No business records of Balance were produced to show that Mr Cosworth worked for Butchery in the capacity as agent or employee of Balance.
(i) No documentation which purports to terminate any contract between Butchery and Balance was provided to FWA.
(j) Even if Mr Cosworth worked from home and used a computer not owned by Butchery, that does not necessarily mean he was not an employee of Butchery.
(k) It matters little that, as submitted by Butchery, Balance provided services to other organisations and not exclusively to Butchery.
[45] Given that I cannot be satisfied that it should have been reasonably apparent to Mr Cosworth that his application had no reasonable prospect of success (the criteria in paragraph 611(2)(b)), it is not necessary for me to consider the matters of discretion. However had I been required to consider whether I would exercise my discretion to make an order, it is unlikely that I would have awarded costs. There is nothing about circumstances in which an unemployed and self-represented unfair dismissal applicant who, when faced with a jurisdictional objection and a respondent with legal representation, lodges in a timely manner a notice of discontinuance, to warrant an exception to the general rule that a person must bear their own costs in relation to a matter before FWA.
[46] Because of my assessment, it is not necessary for me to consider whether the costs that may be awarded under s.611(2) ‘in relation to an application to FWA’ include the costs of a jurisdictional objection to an unfair dismissal application, given that the expression is different to the term ‘in relation to a matter before FWA’ in s.611(1) (emphasis added) - an issue on which no submissions were made.
[47] I will refrain from dismissing Butchery’s costs application because there is a matter I first need to consider, namely whether the application could be validly made, given the operation of s.402.
[48] Before doing so, I note that in circumstances where the merits of an earlier unfair dismissal application/response have not been determined and the party from whom costs are sought has not previously lodged material of any substance in support of its application or response (i.e., no facts have been found and the party from whom costs are sought has not previously made his or her case sufficiently known to FWA), it would be prudent for the party, in opposing the costs application, to provide at the least a simple outline of its case. In failing to do so, the party runs the risk that FWA may be satisfied of the criterion in paragraphs 611(2)(a) or (b) only on the case and supporting material of the costs applicant.
Section 402
[49] The period of time allowable for the making of s.611 applications in respect of Part 3-2 (Unfair dismissals) matters is prescribed by s.402, which states:
“402 Applications for costs orders
An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 401, must be made within 14 days after:
(a) FWA determines the matter; or
(b) the matter is discontinued.”
[50] Clearly s.402 provides limitation periods with which costs applications must comply. 29 The relatively short period of 14 days underlines the Legislature’s intention that applications under s.611 are to be dealt with expeditiously.
[51] In this matter, paragraph 402(b) is the only ground that requires consideration, given that FWA has made no determination.
[52] The question for consideration is whether the application by Butchery was made within 14 days after the matter was discontinued, given that Mr Cosworth’s notice of discontinuance (Form F50) was lodged on 8 February 2011 and Butchery’s application for costs (Form F6) was filed on an earlier date, namely 4 February 2011.
[53] That is, does the provision ‘made within 14 days after ... the matter is discontinued’ enable Butchery to have made its s.611 application in relation to Mr Cosworth’s s.394 application prior to his application being discontinued?
[54] For the reasons that follow, I formed the provisional view that s.402 does not allow the application to have been made prior to the lodgement of the form F50.
[55] When pertaining to time, the word ‘within’ is frequently that which is used for the delimitation of the time to do something. The usual meaning of ‘within’ in this context is ‘before the end of’ the designated period of time which is calculated from the occurrence of a certain event. The period of time from the event can extend into the past or future.
[56] The definition of ‘within’ (when used as a proposition) in the Shorter Oxford Dictionary includes:
“4. Expr.temporal limits: (a) before the end of (a period); also, not more than - ago; (b) between the beginning and end of (a period).” 30
[57] Applying the ordinary and natural meaning of the word ‘within’ in the context of s.402, the expression ‘must be made within 14 days after ... the matter is discontinued’ means that costs applications must be made within specified periods of time.
[58] The outer limits of the specified periods (i.e., the latest) that applicable costs applications can be lodged are 14 days after the occurrence of the events referred to in paragraphs (a) and (b). The use of the word ‘after’ helps identify that outer limit.
[59] It seems only logical that the other limits of the periods of time (i.e., the earliest) that applications must be made, are the times from when the 14 days commences. I can see no reason why the word ‘within’ in the context of s.402 should be given some lesser meaning.
[60] The words ‘after ... FWA determines the matter’ or ‘after ... the matter is discontinued’ cannot be construed to mean that the limitation periods of time for the making of costs applications commence before FWA determines the matter or before the matter is discontinued, respectively. The word ‘after’ is of the future tense.
[61] If the Legislature had intended that the provision mean that a costs application can be made not later than 14 days after FWA determines the matter or the matter is discontinued it could have done so (compare with s.76(3) and s.173(3) of the Act).
[62] In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. 31 There is nothing in s.381 (which prescribes the object of Part 3-2 (Unfair Dismissal) of the Act) that assists with the proper construction of s.402. There is no prescribed object in Chapter 5 (Administration) or Part 5-1 (Fair Work Australia), Division3 (Conduct of matters before FWA) and Subdivision F (Miscellaneous) thereof, within which s.611 occurs.
[63] In the context that generally a person must bear their own costs in relation to a matter before FWA, a likely policy objective for preventing costs applications being lodged before unfair dismissal proceedings are finalised would be to prevent costs applications being used by a party as a threat or weapon in order to seek to pressure or intimidate the other party into agreeing to favourable terms of settlement or discontinuing an application.
[64] Some tentative support for my provisional view that a costs application cannot be made other than during the periods commencing with either the FWA determining the matter or the matter being discontinued and ending within 14 days those events, can be found in the decision in Fr Andrea Bellia v Assisi Centre Inc. 32
[65] To the extent that it is allowable pursuant to s.15AA (Use of extrinsic material in the interpretation of an Act) of the Acts Interpretation Act 1901 (C’th), the Explanatory Memorandum to the Fair Work Australia Bill 2009 does not assist. The provisions thereof which related to the clause that was to become s.402 state:
“Clause 402 – Applications for costs orders
1617. This clause provides that an application for costs, under either the general costs provisions in clause 611 or the unfair dismissal specific provisions in clause 401, must be made within 14 days after a matter is determined by FWA or is discontinued.
1618. Clauses relevant to the discontinuation of matters are contained in Part 5-1 (Fair Work Australia).
1619. Clause 588 allows a person who has applied to FWA to discontinue the application in accordance with any procedural rules, whether or not the matter has been settled.”
[66] Under the Workplace Relations Act 1996 as it existed prior to the Fair Work Act 2009 s.658(6) stated:
“(6) An application for an order for costs under this section must be made within 14 days after the determination, discontinuance, settlement or dismissal of the application under section 643 or proceeding relating to an application under section 643 (as the case may be).”
[67] Whilst I found several decisions of the Australian Industrial Relations Commission that considered s.658(6), each referred to the outer limits of the time period of 14 days. 33
[68] Subsection 658(6) was in identical terms to s.170CJ(5) of the Workplace Relations Act 1996 as it existed after the Workplace Relations Amendment (Termination of Employment) Act 2001. I have found only two decisions of the Commission which refer to the earliest a costs application may be lodged and each supports the view that an application may not be may before the determination, discontinuance, settlement or dismissal of the application or proceedings. Those decisions are:
(a) In Gezun, Shane and Others v Tenix Defence Pty Limited, [PR936726, 29 August 2003], Lacy SDP found that the costs applicant had to wait until either the proceedings for which costs were sought had been determined (or settled) or the application discontinued before bringing the costs application. After finding the application was premature, His Honour dismissed the application.
(b) In Matthew Adams v Erolwren Pty Ltd T/as Ian Parker Motors, [PR933182, 18 June 2003], Cargill C, considered a party’s written submissions in opposition to an extension of time to lodge an unfair dismissal application. Those submissions purported to contain an application for costs under s.170CJ and the Commissioner stated:
“... s.170CJ(5) relevantly provides that such an application must be made within fourteen days after the determination of a proceeding in relation to an application under section 170CE. I would suggest that the respondent consider this decision before deciding whether or not to pursue an application for costs. If they wish to proceed it would appear that a fresh application should be made bearing in mind the wording of section 170CJ(5).” 34
[69] My provisional view is not inconsistent with the decision of Sams DP in Bradley John Beasley v Australian National University t/a ANU 35 which, in considering whether a s.365 (General protections dispute involving dismissal) application under the Act could be made prior to the person being dismissed, canvassed the principles of statutory construction. The matter turned on the proper application of s.366(1) of the Act which prescribes:
“366(1) An application under section 365 must be made:
(a) within 60 days after the dismissal took effect;
(b) ....”
[70] As the application of s.402 was not raised at the hearing, during the course of writing this decision I provided the parties with the opportunity to comment on my preliminary view.
[71] In response, Mr Cosworth supported the relevance of s.402 to the costs application. Butchery did not provide comment on the preliminary view within the nominated timetable, or seek an extension of time for the lodgement of a response.
[72] I have concluded that Butchery’s s.611 application was not made in accordance with the requirements of s.402. Butchery’s s.611 application was made prematurely and FWA has no jurisdiction to deal with the application.
[73] The application is dismissed and I order accordingly.
COMMISSIONER
Appearances:
Mr R Cosworth, on his own behalf
Mr J Raine, Counsel for the Respondent
Hearing details:
2011
Sydney
March 18
1 This was not a case where it was asserted that Mr Cosworth was an independent contractor of Butchery which would have warranted consideration of the governing law as summarised in Abdalla, Abraham, PR927971, 14 May 2003, per Lawler VP, Hamilton DP, Bacon C.
2 Although the F50 was dated 7 February 2011, it was received with FWA by fax at 12.46pm on 8 February 2011.
3 Although it did not press the illegible MYOB computer printout pages.
4 PN112.
5 Section 587 includes:
“(1) Without limiting when FWA may dismiss an application, FWA may dismiss an application if:
(a) the application is not made in accordance with this Act; or
(b) the application is frivolous or vexatious; or
(c) the application has no reasonable prospect of success.”
6 PN35.
7 Refer to decision of the Full Court of the Federal Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission, [2006] FCAFC 199, 160 IR 405, 415-416, per Black CJ, North & Mansfield JJ at paras 41-47 & 61.
8 [2010] FWA 2225, 13 April 2011, per Thatcher C.
9 That test being referred to in General Steel Industries Inc v Commissioner for Railways (NSW), [1964] HCA 69; (1964) 112 CLR 125 (9 November 1964), at paras 8-10.
10 [2010] HCA 28 (1 September 2010).
11 At paras 58 & 60.
12 PR968915, 25 August 2006, per Lawler VP, Hamilton DP, Hingley C.
13 (1990) 94 ALR, 11 at 46.
14 Refer to decision of the Full Bench in Brazillian Butterfly Pty Ltd v Alissia Charalambous, op cit, which at para 12 referred with apparent approval to the decision of Lawler VP in James Abbey and Daycare Management Pty Ltd t/as Blinky Bill Early Childhood Centre, PR946186, 30 April 2004, at para 14.
15 s.650(2).
16 s.658(5).
17 Subject to the waiver of both of the parties (which was not given in this instance), the content of the conciliation conference retains the privilege of being conducted in confidence and without prejudice and cannot be admitted.
18 This is provided by paragraph 402(b) of the Act.
19 In unfair dismissal proceedings, an applicant does not lodge pleadings and the information required for the Form F2 does not have to outline the extent of the applicant’s case.
20 (1965) 113 CLR 228 at 243 (4)(1965) 113 CLR 228, per Barwick CJ at 252.
21 (1995) 185 CLR 410 at p 436.
22 Damevski v Giudice, President of the Australian Industrial Relations Commission and Ors, (Damevski), [2003] 202 ALR, 494; (2003) 129 IR 53, per Marshall J, at para 60.
23 Print S0253, 25 October 1999, per Giudice P, McIntyre VP, Redmond C at para 49.
24 Sappideen, O’Grady and Warburton, (6th ed, 2009) Thomson Reuters (Professional) Australia Limited.
25 Ibid, page 112.
26 Op cit, at para 83.
27 Ibid, per Marshall J at para 79 and per Merkel J, at paras 144 & 172.
28 Ibid, per Marshall J, at paras 79 & 80.
29 For the rationale for limitation periods, see the decision of McHugh J in Brisbane South Regional Health Authority v Taylor [1996] 186 CLR at 541.
30 Oxford University Press, Fifth Edition (2002), Volume 2, page 3658..
31 Section 15AA (Regard to be had to purpose or object of Act) of the Acts Interpretation Act 1901 (Cth).
32 [2010] FWA 2904, 1 June 2010, per Hamilton DP, at para 26.
33 Most recent examples were, Elizabeth Frances Rosemary Harvey v Australian Injecting & Illicit Drug Users' League - [2007] AIRC 120, 21 February 2007, per Lawler VP; Toni Ann Dunn v Deb Australia Pty Limited[2009] AIRC 745, 11 August 2009, per Watson VP; Jan Elizabeth Rabbidge v Vincent Family Trust[2009] AIRC 151, 12 February 2009, per Spencer C.
34 At para 35.
35 [2010] FWA 7308, 30 September 2010, per Sams SDP, at para 6.
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