Adam MacNamara v Wilson S Farm Fresh Fruit & Veg
[2024] FWC 1259
•15 MAY 2024
| [2024] FWC 1259 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Adam MacNamara
v
Wilson S Farm Fresh Fruit & Veg
(U2022/10381)
| DEPUTY PRESIDENT LAKE | BRISBANE, 15 MAY 2024 |
Application for costs – unfair dismissal application – whether application had no reasonable prospect of success (s.611 (2)(b)) – whether application was made vexatiously (s.611(2)(a))—whether unreasonable act or omission (s.400A) – costs not awarded – no clear evidence that application had no reasonable prospect of success or was made vexatiously – no clear evidence of unreasonable conduct from first party – costs application dismissed.
Mr Adam MacNamara (the Applicant) lodged an application with the Fair Work Commission (the Commission) seeking a remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to his dismissal by Wilson S Farm Fresh Fruit & Veg (the Respondent). A decision was issued on 14 April 2023 (the Decision) stating that the Applicant was not dismissed and therefore was not eligible to lodge an unfair dismissal claim.[1]
On 27 April 2023, The Respondent (the Costs Applicant) lodged an application for costs against Mr MacNamara (the Costs Respondent / Mr MacNamara) under s.400A and s.611(2) of the Act. The Costs Applicant seeks an order for costs from the date the s.394 application was lodged up to 14 April 2023 (inclusive). The itemised table of costs sought by the Costs Applicant as at 27 April 2023 was attached to its form F6 application and calculated to be $5,340.00.
The Costs Application
In the Decision, I ordered the application to be dismissed as the Applicant was not dismissed within the definition of s.386(1) of the Act as a person protected from unfair dismissal.[2] The circumstances and reasoning behind this finding are set out in the Decision and not repeated here.[3]
The Costs Applicant seeks costs against Mr MacNamara pursuant to ss.400A(1), 611(2)(a) and (b) of the Act.[4] The Costs Applicant submits that the Costs Respondent brought the application with no reasonable prospect of success and ‘continued the Application with no reasonable prospects of success, despite being put on notice to this fact well prior to each party commencing preparation for the hearing’.[5]
In relation to s.611(2)(b), the Costs Applicant submits that it should have been reasonably apparent to the Costs Respondent that their application had no reasonable prospect of success. It contends that all ‘factually’ relevant information upon which the Decision was made was already known to the Applicant before making their application. Because the legal position regarding unfair dismissal as a casual employee is ‘well-settled by virtue of a string of decisions by the Commission’,[6] the Costs Respondent further contends that there were objectively no factual or legal disputes that required the Commission’s intervention.
The Costs Applicant contends that the Costs Respondent either knew, or should have known, that their case could not proceed, ‘and yet he proceeded through to a hearing’.[7] The Costs Applicant elaborates on this by reference to evidence submitted as part of the original application and in the hearing of the matter.
In the alternative, the Costs Applicant relies on s.400A(1) to argue that the application ‘was continued with no reasonable prospects of success’. The Costs Applicant submits that because the Applicant was advised by the Respondent of the poor prospect of success in their application, the Applicant’s failure to discontinue the application at this time amounted to an unreasonable act or omission by the Applicant pursuant to s.400A(1).
Annexed to the Costs application was a letter from the Respondent to the Applicant dated 18 January 2023 (the Letter), which advised the Applicant of his poor prospects of success as there was no reasonable expectation of continued employment by the Respondent. The Letter concludes by putting the Applicant on notice of a costs application being pursued by the Respondent should the application be continued:
“Should you promptly discontinue this application, then our client will not pursue you for their legal expenses. However, we put you on notice that if you continue this matter and you later withdraw it or should a judgment be made in our favour, then we will seek an order from the Commission that you pay our client’s legal expenses in full. This could be a significant expense to you.” [8]
The Costs Applicant relies on a further or alternative ground under s.611(2)(a) that the application was made vexatiously by the Applicant, pointing to instances where the Applicant demonstrated a lack of familiarity with ‘legal decorum’ and a ‘deep-seated’ dislike of the Respondent throughout their application. The Costs Applicant refers to statements and material the Applicant had submitted as part of the original application, as well as an issue that had occurred between the Applicant’s daughter and the Respondent during their employment:[9]
“It is the Respondent’s submission that the incident involving the Applicant’s daughter has coloured the Applicant’s perception of the Respondent for the worse –noting that he initially commenced working for the Respondent in July 2014 and had worked without notable issue until September 2022 - and has incited him to bring and continue a vexatious unfair dismissal application against the Respondent.” (footnotes omitted)
In reply, Mr MacNamara has stated that he had ‘reasonable cause’ to lodge his application given his sudden reduction in shifts, which had not previously occurred during the 8-year period working for the Costs Applicant. The Costs Respondent notes that employees were not prepared to give evidence against their employer to substantiate his claim. The Costs Respondent is seeking for this application to be dismissed, or an allowance of not more than $1,000.00 to be awarded as costs.
Consideration
Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are a number of provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Sections 400A and 611(2) of the Act are two such exceptions.
Section 400A of the Act provides as follows:
400A Costs orders against parties
(1) The Fair Work Commission 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 Fair Work Commission 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 Fair Work Commission 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 Fair Work Commission’s power to order costs under section 611.”
Section 400A(1) of the Act establishes two preconditions for the making of an order for costs:
(a) First, the Commission must be satisfied that the party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and
(b) Secondly, such act or omission caused the other party to the matter to incur costs.
If these two preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.
Section 611(2) of the Act provides as follows:
“(2) However, the Fair Work Commission 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 Fair Work Commission if:
(a) the Fair Work Commission 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 Fair Work Commission 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.”
In Baxter Healthcare Pty Ltd v Mr Andrew Portelli [2017] FWCFB 3981 at [113], the Full Bench summarises how costs are to be applied:
“In summary, the following general observations may be made about the discretion to order costs in ss. 400A and 611:
1. The discretion is expressed in general, unqualified, terms confined only by the subject matter, legislative context and purpose.
2. The terms of ss. 400A and 611 operate to limit the scope of any order which may be made (see [98] and [99] above).
3. The discretion must be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent.
4. The discretion must be exercised in a manner which is ‘fair and just’, and takes into account ‘equity, good conscience and the merits of the matter’.The Explanatory Memorandum to the Fair Work Amendment Bill 2012 provides, at [168] to [171], in respect of s.400A of the Act that:
“Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.
As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances, but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.
It is well established that a cautious approach should be taken in respect of any application for costs made under the Act, and only where a clear case is made out to satisfy exceptions to the general rule in s.611(1) that parties bear their own costs.[10] This approach has often been extended to costs applications brought under s.400A in relation to unfair dismissal proceedings.[11]
Sections 611(2)(a) and 611(2)(b)
In this case, the Costs Applicant has invoked both s.611(2)(a) and s.611(2)(b) to advance its claim that the Costs Respondent made the application vexatiously or with no reasonable prospect of success.
The principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (‘Church’).[12] An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.[13] This reflects the preference for a narrow construction of ‘vexatiousness’ in proceedings that are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’.[14]
The Costs Applicant in its submissions states that the application was brought vexatiously through a ‘deep-seated dislike of the Respondent’.[15] This ‘dislike’ is said to be evident in certain remarks made in the Applicant’s submissions, for example that the Respondents were ‘arrogant and toxic’, ‘do not value employees’, or “continually delayed proceedings”, despite there being no evidence of any appreciable delay at the hands of the Respondents. In support of its position that the application was brought vexatiously, the Costs Applicant also says the ‘Applicant was put on notice as to the significant weakness in his application, yet he continued unabated.’[16]
I am not satisfied that a ‘deep-seated dislike of the Respondent’ was the ‘predominant purpose or motive’ to harass or embarrass the other party or to gain a collateral advantage. The Applicant was not receiving work after receiving consistent shifts over the eight-year period they spent working for the Respondent. It was reasonable for the Applicant to question why he was not receiving shifts. Accordingly, the requirements of s.611(2)(a) of the Act have not been satisfied. No finding can be made that the application was brought vexatiously.
In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 as follows (footnotes omitted):
“[10] 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.”[17]
The Costs Applicant has submitted that it should have been reasonably apparent to the Costs Respondent that its application had no reasonable prospect of success. The Costs Applicant relies primarily on the Letter it sent to the Costs Respondent to advance this claim. The Letter advised, inter alia, that the application had a poor prospect of success, was ‘baseless’, and foreshadowed a potential costs application if the Applicant failed to discontinue the application.[18] The Costs Applicant also relies on the Decision, which dismissed the application in support of their jurisdictional objection, to invoke s.611(2)(b).[19]
In my view, the Costs Applicant has mischaracterised the operation of s.611(2)(b) – the mere fact that the Letter was consistent my later decision has no bearing on current matters.
In objective terms, it was not reasonably apparent to Mr MacNamara that the application had no reasonable prospect of success. The question of whether the Costs Respondent was unfairly dismissed was not unreasonable until it was made clear at Hearing, where the Respondent demonstrated their financial downturn as the main reason why the Applicant was not being given shifts. The Applicant had worked with the Respondent for enough time to notice irregularities with the Respondent’s rostering patterns.
Ultimately, an assessment of evidence and what was communicated between Mr MacNamara and Mr Wilson was required to determine the jurisdictional objection that the Applicant was not dismissed. No evidence before me indicates that it should have been reasonably apparent to Mr MacNamara that the application had no reasonable prospect of success or was not reasonably arguable. It follows that my discretion to order costs under s.611(2)(b) cannot be enlivened.
s. 400A – Unreasonable conduct/continuation of matter
The Costs Applicant also pursued its application on the basis of s.400A(1) of the Act. It submits that the Costs Respondent failed to discontinue the matter after the Letter was sent advising that the application had no reasonable prospects of success. The Costs Applicant also submits that ‘The decision by Deputy President Lake was consistent with the issues in the Applicant’s application as identified in this letter by the Respondent’s solicitor’.[20]
Relevantly, the Full Bench in Matthew Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 stated that section 400A ‘is concerned with unreasonable acts or omissions in connection with the “conduct or continuation” of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.’[21]
I have previously stated that there was no evidence that it should have been reasonably apparent to the Costs Respondent that the application had no reasonable prospect of success. Similarly, the fact that the Decision was consistent with the Costs Applicant’s jurisdictional objection cannot reasonably enliven my discretion under s.400A(1). This power is intended to apply where there is clear evidence of unreasonable conduct by the first party. The Costs Applicant considers Mr MacNamara’s failure to discontinue his unfair dismissal application after their Letter an instance of such conduct. Considering the legislative intention of this provision, as well as the above consideration of s.611(2)(b), I am not satisfied that Mr MacNamara caused those costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter.
Although the Costs Applicant was correct in their jurisdictional objection, there was significant complexity with the matter history. Primarily, this arose from Mr Wilson as the Respondent. It was originally Mrs Wilson who had lodged the Form F3 – Employer response, however she had left the farm, which prolonged the matter.
Mr Wilson’s lack of correspondence with the Fair Work Commission at the initial stages of the matter caused more delay until he was able to seek representation.
The Applicant made an application to refuse representation which would have reduced costs had this been granted. The Applicant did not have representation at the hearing. Given the matter history, the Respondent was granted representation to assist in the Commission as it required a test of evidence to establish if the Applicant was not given shifts due to being dismissed.
Conclusion
It was not clear from the outset that the Applicant had no prospects of success as required by s.400A(1) of the Act.
Furthermore, I do not find that it was reasonably apparent that the matter had no reasonable prospect of success for the purposes of 611(2)(b), and it is well established that costs under s.611(2)(a) should be awarded with extreme caution when the purpose is to harass or embarrass the other party. I do not find the Applicant’s conduct in this regard to be vexatious. Therefore, there are no exceptions to the general rule in s.611(1) to allow costs to be awarded in these circumstances.
The Commission’s unfair dismissal jurisdiction should not create significant obstacles in technicalities and legalities and should ensure a ‘fair go’ all around in line with the objects of the Act provided in s.381 of the Act.
As a result, I have decided not to exercise my discretion to award costs in favour of the Costs Applicant in this matter. Accordingly, Wilson S Farm Fresh Fruit & Veg’s costs application pursuant to ss.400A, 611(2)(a) and 611(2)(b) of the Act is dismissed.
DEPUTY PRESIDENT
[1] [2023] FWC 795.
[2] Ibid at [31].
[3] See Ibid at [19]-[31].
[4] Cost Applicant’s Form F6 – Application for costs filed 27 April 2023, Annexure A at [1.1] (‘Costs Application’).
[5] Ibid.
[6] Ibid at [3.2].
[7] Ibid at [3.5].
[8] Costs Application, Annexure B at [11].
[9] Ibid, Annexure A at [5.7].
[10] Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[2014] FWCFB 810 at [26] (‘Church’).
[11] See eg HCL Australia Services Pty Limited T/A HCL v Gautam Amba and Brett Wilson[2019] FWC 1891 at [35].
[12] Church at [23]-[33].
[13] Ibid at [29].
[14] Ibid, citing Hamilton v Oades (1989) 166 CLR 486 at 502 (Deane and Gaudron JJ).
[15] Costs Application at [5.3].
[16] Ibid at [5.1]-[5.7].
[17] Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 at [10].
[18] Costs Application, Annexure B.
[19] Ibid, Annexure A at [3.2].
[20] Ibid at [4.5].
[21] Matthew Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 at [61] (‘Gugiatti’).
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