Amara Somasundaram v Department of Education & Training, North-Eastern Victoria Region
[2016] FWC 1504
•9 MARCH 2016
| [2016] FWC 1504 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Amara Somasundaram
v
Department of Education & Training, North-Eastern Victoria Region
(U2015/2980)
COMMISSIONER RYAN | MELBOURNE, 9 MARCH 2016 |
Application for relief from unfair dismissal - costs application.
[1] On 19 October 2015 the Applicant made an application for costs in relation to the unfair dismissal application in which the Applicant had been successful. The application for costs was made using Form F6 which is a generic form of the Commission for the making of applications for costs under ss.376, 400A, 401, 611 and 780. The application identified the party against whom a costs order was sought as being the Department of Education and Training, North-Eastern Victoria Region (the Department of Education and Training). The application was prepared by the Applicant herself.
[2] On 17 November 2015 directions were issued to the Applicant requiring her to be more specific in identifying the specific section or sections of the Act under which the Applicant was seeking a costs order. Material filed in response to this direction suggested that the Applicant was seeking a costs order against the Respondent and a costs order against the Respondent’s legal representative (K&L Gates).
[3] Further directions were issued to the parties requiring them to file and serve their respective submissions and evidentiary material. The application for costs was listed for hearing on 19 February 2016. The Respondent’s legal representatives sought as a preliminary matter that I dismiss the application for costs in so far as it sought a costs order against them. I declined to do so and advised the parties that this matter would be dealt with at the costs hearing.
[4] Throughout the process of dealing with the Applicant’s costs application the Applicant has been self-represented.
[5] At the hearing on 19 February 2016 the first matter dealt with was the application for costs against the Respondent’s representatives. K&L Gates was separately represented at the costs hearing. After short submissions from both the Applicant and the representative of K&L Gates, I dismissed the application for costs against K&L Gates. The bulk of the hearing on 19 February 2016 concerned the application for costs against the Respondent.
[6] The Applicant made a lengthy oral submission in addition to the written submission filed with the Commission. The Applicant did not address any of the authorities on cost applications but rather dealt with, what the Applicant considered to be the substantive merits of the Applicant’s case for a costs order. The Respondent, through it legal representative in the costs application, made detailed oral submissions opposing the application for costs and which expanded on the written submissions filed with the Commission and the Respondent took the Commission to relevant authorities.
The relevant provisions of the Act
[7] In the present matter the Applicant is seeking a costs order under s.400A and under s.611 against the Respondent. Those two provisions are as follows:
“400A Costs orders against parties
(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.
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).”
Relevant Authorities
[8] The Respondent provided a folder of authorities upon which it relied. The authorities were (in the order they were in the folder): Goffet v Recruitment National P/L [2009] AIRCFB 626; Roy Morgan Research Ltd v Baker[2014] FWCFB 1175; Brazilian Butterfly P/L v Charalambous[2006] AIRC 521; Church v Eastern Health[2014] FWCFB 810; Keep v Performance Automobiles P/L[2015] FWCFB 1956; Nilsen v Loyal Orange Trust (1997) 76 IR 180; Jeffrey v IBM Australia Ltd[2015] FWCFB 5226; Qantas Airways Ltd v Carter[2013] FWCFB 1811; Kanan v Australian Postal and Telecommunications Union 1992 43 IR 257. These authorities canvass the proper approach to costs application under both s.400A and 611 and they contain a necessary and useful discussion around the broader authorities dealing with costs applications both before single members of the Commission and before Full Benches of the Commission.
Background to the Costs Application
[9] The Applicant was dismissed from her position as a teacher at Sherbrooke Community School on 23 January 2015 after she had been accused of serious misconduct and after an investigation had been conducted by the Department of Education and Training and after she had been found guilty of serious misconduct.
[10] The Applicant filed an Unfair Dismissal Application with the FWC on 11 February 2015.
[11] The Department of Education and Training filed a Form F3 - Employer Response to the Unfair Dismissal Application on 19 February 2015.
[12] The Application was subject to conciliation on 6 March 2016 which was unsuccessful. The Applicant’s representative at the conciliation had advised the conciliator that the Applicant would have 5 witnesses at any arbitration. The Respondent’s representative advised the conciliator that the Respondent would have 4 – 6 witnesses at any arbitration. On 6 March 2016 directions were issued to the parties requiring the filing and serving of their respective cases. On 20 March 2015 a Notice of Listing was issued setting the matter down for 3 days of arbitration on 6, 7 and 8 May 2015. The directions were amended on 30 March 2015 to provide that the Applicant file and serve by 7 April 2015 and the Respondent file and serve by 28 April 2015.
[13] The arbitration commenced with the Applicant presenting her evidentiary case over two full days, 6 and 7 May 2015. The Applicant and two of her witnesses were cross examined by the Respondent. The Applicant’s third witness was not cross examined by the Respondent.
[14] The Respondent commenced its evidentiary case with Ms Holmes, the acting school principal who made the complaints against the Applicant which led to the Respondent investigating the Applicant’s conduct and then dismissing the Applicant. Apart from a very short examination in chief, the whole of 8 May 2015 was taken up with the cross examination of Ms Holmes by the Applicant’s legal representative. At the conclusion of proceedings on 8 May 2015 the matter was adjourned to 14 and 15 May 2015. All of 14 May 2015 was taken up with the continued cross examination of Ms Holmes with proceedings being adjourned at 4.19pm on that day with the expectation of continuing with Ms Holmes on 15 May 2015.
[15] After proceedings had adjourned at 4.19pm the Respondent sought the opportunity of further conciliation by a member of the Commission. This was arranged at short notice with Commissioner Gregory agreeing to commence conciliation at 9am on 15 May 2015. After a couple of days of conciliation meetings the matter was not able to be resolved and the matter came back to me.
[16] On 28 May 2015 in response to an application from the Applicant for Orders to Produce the Respondent filed Supplementary Submissions in which the Respondent conceded that the Commission could make a finding that the dismissal of the Applicant was harsh, unjust or unreasonable and that the only remaining issue in dispute was whether or not a remedy should be given to the Applicant. The Respondent contended that reinstatement was inappropriate. The Respondent advised the Commission that an open offer had been made to the Applicant on the same day in which the Respondent offered to resolve the proceedings by paying to the Applicant an amount equal to six months’ pay. The Respondent advised the Commission that it did not press its written submissions that the Commission consider reducing the amount of compensation pursuant to s.392(3). The Respondent contended that there was no longer any justification for the documents sought by the Applicant as the only issue in dispute was the issue of remedy.
[17] The Applicant, on 2 June 2015, pressed for the continuation of the substantive case and for the issue of the orders to produce on the basis that the Respondent was not conceding that the dismissal was harsh, unjust or unreasonable and that the material sought could also be relevant to remedy. The Commission issued the orders to produce as sought by the Applicant.
As the Respondent maintained its objections to the orders to produce the Commission listed the matter for a hearing on 5 June 2015. At that hearing the Respondent made clear that it was withdrawing reliance on the bulk of Ms Holmes witness statement and that it would withdraw reliance on the witness statements of the other witnesses for the Respondent. The Respondent sought to rely only on the introductory paragraphs of Ms Holmes witness statement and upon the last three paragraphs of her statement where Ms Holmes addressed the inappropriateness of the remedy of reinstatement of the Applicant.
[18] At the conclusion of that hearing the Commission set aside the orders to produce issued on 2 June 2015. The Commission also foreshadowed matters that needed to be considered by the parties in relation to the continuation of the proceedings which were listed for 10 June 2015.
[19] At the hearing on 10 June 2015 the Respondent repeated its concession and the intention to withdraw reliance on most of the evidentiary case which had been filed by the Respondent. In a written submission the respondent said, inter alia:
“1. The Respondent has conceded that it is open to the Commission to find that the dismissal was harsh, and therefore an unfair dismissal.
2. Consequently, it does not intend to further contest the issue of whether the dismissal was unfair within the meaning of s 385(b). In that regard:
(a) the Respondent withdraws reliance on the statement of Sue Holmes, save for paragraphs 1 - 13 (evidence of her position and in relation to Sherbrooke Community School) and paragraphs 81 - 83, which it relies upon in relation to the issue of appropriateness of reinstatement as a remedy.
(b) the Respondent does not intend to rely upon or call evidence of Peter Greenwell, Aldo Carlino or Jacquie Wiltshire.
2.2 Insofar at the Commission is obliged to have regard to and make findings in relation to the criteria set out in s 387:
(a) the evidence received by the Commission as part of the Applicant’s case is sufficient for the Commission to make any necessary consideration and findings;
(b) with reference to that evidence, the parties can make submissions as to the findings the Commission ought to make regarding the criteria in s 387;
(c) the Commission is entitled to take account of the Respondent’s position that it is open to find that the termination was harsh as a relevant consideration under s 387(h).
2.3 In those circumstances, there is no basis for any further cross-examination of Ms Holmes, except in relation to the separate issue of reinstatement.
2.4 The Respondent accepts that the Commission may have regard to the oral evidence given by Ms Holmes in chief and in cross examination.
2.5 There is therefore no need for the Commission to continue to hold a hearing in relation to the issue of whether the dismissal was unfair within the meaning of s 385(b).
2.8 Continuing the hearing in relation to whether the dismissal was unfair is unnecessary and no longer appropriate, having regard to:
(a) the objects of Part 3-2, which includes the establishment of procedures for dealing with unfair dismissal that are quick, flexible and informal and which address the needs of employers and employees, and the requirement that those procedures are intended to ensure a “fair go all round”: s 381 ; and
(b) the reasonable concession made by the Respondent, having regard to the development of the evidence, that the matter should proceed on the basis that the termination was unfair, and that the only remaining issue is one of remedy;
(c) the open offer by the Respondent to pay the Applicant 26 weeks compensation;
(d) the number of hearing days already conducted, and the length of time the Applicant has engaged in cross-examination;
(e) the continuing impact of the hearing on the Sherbrook School community and the Respondent in terms of taking witnesses and others away from their principal duties running a school and education system;
(f) the minimal forensic utility in hearing further evidence, given that the ultimate unfairness of the dismissal is now not in dispute; and
(g) the impact on the Commission’s time and resources.
[20] Notwithstanding these concessions the Respondent proposed that whilst the evidentiary case of both the Applicant and the Respondent be concluded that both the Applicant and the Respondent should be given the opportunity to make final submissions in relation to s.387.
[21] The Commission determined to end the evidentiary part of the proceedings and set a timetable for the parties to file their final submissions in relation to s.387.
[22] Submissions were filed and the Commission subsequently issued a decision that the dismissal of the Applicant was unfair.
[23] Further proceedings occurred before Gooley DP in relation to remedy. The Respondent arguing that reinstatement was inappropriate with the Applicant arguing for reinstatement. A decision was issued by Gooley DP providing the Applicant with reinstatement and with an order for lost pay and continuity of service.
Consideration of the Applications for Costs
[24] The applications for costs under each of s.400A and s.611 must be considered separately given the requirements of both sections.
[25] The first point that must be made is that the legislative purpose of the two sections is different.
[26] Section 611 commences by stating the key principle underlying participation in proceedings before the Commission, namely that applicants and respondents must bear their own costs in relation to the matter before the Commission.
[27] The circumstances in which the Commission can make a costs order under s.611 are the very limited exceptions set out in s.611(2) to the general rule in s.611(1) that each party bear its own costs.
[28] The authorities on s.611 and predecessor legislative provisions make it very clear that the hurdle created by s.611(2) is meant to be a high bar that requires significant effort to get over and that s.611(2) is not a low bar that can be stepped over easily.
[29] Section 400A was introduced into the Act in 2012 following a review of the Act’s first two years of operation. The Explanatory Memorandum to s.400A makes very clear its purpose:
“Part 3 – Costs orders against parties
Fair Work Act 2009
168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.
169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.
172. This amendment responds to Panel recommendation 45.
173. Subsection 400A(2) provides that the power to award costs against one party in these circumstances is only exercisable if the other party to the matter makes an application in accordance with section 402. Subsection 400A(3) makes clear that the new power to award costs under subsection 400A(1) operates in addition to subsection 611(2), which enables the FWC to make costs orders against a person in certain circumstances, such as where an application is made vexatiously or without reasonable cause.”
[30] Whilst s.400A does not have the same general principle as does s.611(1) it is clear from the Explanatory Memorandum to s.400a that there is still a high bar to be got over before costs can be ordered under s.400A.
[31] Section 400A gives rise to 4 specific questions that must be addressed:
- Is the FWC satisfied that the Respondent caused those costs to be incurred because of an unreasonable act of the Respondent in connection with the conduct of the matter?
- Is the FWC satisfied that the Respondent caused those costs to be incurred because of an unreasonable omission of the Respondent in connection with the conduct of the matter?
- Is the FWC satisfied that Respondent caused those costs to be incurred because of an unreasonable act of the Respondent in connection with the continuation of the matter?
- Is the FWC is satisfied that the Respondent caused those costs to be incurred because of an unreasonable omission of the Respondent in connection with the continuation of the matter?
[32] Section 611 gives rise to 3 specific questions that must be addressed:
- Is the FWC satisfied that the Respondent responded to the application, vexatiously?
- Is the FWC satisfied that the Respondent responded to the application, without reasonable cause?
- Is the FWC satisfied that it should have been reasonably apparent to the Respondent that the Respondent’s response to the application, had no reasonable prospect of success?
[33] I intend to deal with the 7 questions in order of ease of answering them.
Is the FWC satisfied that the Respondent responded to the application vexatiously?
[34] This question must be answered in the negative.
[35] The question requires consideration of the motive of the Respondent in responding to the application for an unfair dismissal remedy. To use the words of North J in Nilsen v Loyal Orange Trust, 1 the Respondent’s response to the application for an unfair dismissal remedy will have been made vexatiously “where the predominant purpose …is to harass or embarrass the other party, or to gain a collateral advantage”. The Respondent in this case, as in most cases, is an incorporeal person and as an incorporeal person it must act through corporeal persons. It is the conduct of the corporeal persons who have authority to act in the name of the Department of Education and Training which needs to be examined to discern the motive behind their decision to respond to the application for an unfair dismissal remedy.
[36] In the present matter it may very well be that the predominant purpose of Ms Holmes, as the principal of the school, was to harass or embarrass the Applicant and it also may very well be the case that other staff within the Department of Education and Training who were advising and assisting Ms Holmes also had the predominant purpose of harassing or embarrassing the Applicant. The Applicant certainly alleges that this is the case. However, there was only one decision maker and that was Mr Greenwell, Regional Director of the Department of Education and Training and it is only the motive behind his actions which will be relevant to this question.
[37] Notwithstanding the number and intensity of the complaints that the Applicant makes against Mr Greenwell in relation to his conduct in dealing with the Applicant’s grievances and in dealing with the allegations of misconduct made against the Applicant there is nothing in any of the evidence in this matter or in any of the material relied on by the Applicant which could lead to a conclusion that Mr Greenwell was acting vexatiously in responding to the Applicant’s application for an unfair dismissal remedy. Whatever motives Mr Greenwell had in responding to the Applicant’s application it is very clear that Mr Greenwell did not act with the predominant purpose of harassing or embarrassing the Applicant.
[38] The application for costs against the Respondent insofar as the application relies on this part of s.611(2)(a) must be dismissed.
Is the FWC satisfied that the Respondent caused those costs to be incurred because of an unreasonable omission of the Respondent in connection with the conduct of the matter?
Is the FWC is satisfied that the Respondent caused those costs to be incurred because of an unreasonable omission of the Respondent in connection with the continuation of the matter?
[39] These two questions must be answered in the negative.
[40] These questions require that there be an “unreasonable omission” of the Respondent in either the conduct of the matter or the continuation of the matter.
[41] In this matter the Applicant does not neatly characterise the conduct of the Respondent of which she complains as either acts of commission or as acts of omission. It is difficult to discern from the Applicant’s case whether any unreasonable acts of omission are specifically alleged against the Respondent. Whilst it is possible for an act to be both an unreasonable act of commission and an unreasonable act of omission in all of the circumstances of this costs application it easier and more appropriate to consider the complained of conduct of the Respondent under the remaining questions to be answered.
[42] On the material before the Commission in this matter, the Commission could not be satisfied that there was any unreasonable omission by the Respondent in connection with the conduct of the matter or in connection with the continuation of the matter.
[43] The application for costs against the Respondent insofar as the application relies on this part of s.400A(1) must be dismissed.
Is the FWC satisfied that it should have been reasonably apparent to the Respondent that the Respondent’s response to the application, had no reasonable prospect of success?
[44] The test for the application of s.611(2)(b) was neatly stated by a Full Bench in Neil Keep v Performance Automobiles Pty Ltd: 2
“[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief. 3
[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. 4 In Deane v Paper Australia Pty Ltd5 a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;
‘unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available”. 6
[45] As the Full Bench in A Baker v Salva Resources Pty Ltd 7said:
“[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 4 or so lacking in merit or substance as to be not reasonably arguable.”
[47] The Respondent in its Respondent’s Outline of Submissions on Applicant’s Costs Application contended as follows:
45. At the conclusion of the evidence for the applicant, the respondent’s defence of the unfair dismissal application could not be said to be untenable or groundless, or so lacking in merit or substance as to be not reasonably arguable. At that point in time, the applicant did not deny that she had made the statement to the Whole School Meeting on 19 November 2013, or that she had sent the four emails. Her explanation for her conduct in taking these steps did not detract from the view which the respondent had taken that the making of the statement or the sending of the emails was unprofessional and harmful to harmonious relations in the School.
46. However, the School’s Acting Principal, Sue Holmes, gave evidence on certain matters during cross-examination which caused the respondent to reassess its prospects of success. ……….
47. Once this evidence was given by Ms Holmes in cross-examination on the third and fourth days of the hearing, it became apparent on an objective basis that the respondent’s defence of the unfair dismissal application (on the issue of liability) was weak. As soon as this occurred, the respondent conceded liability, the substantive hearing of the application ended and the parties moved into conciliation before Commissioner Gregory.
48. It is acknowledged that the respondent continued to contest the issue of remedy and in this regard relied upon limited parts of Ms Holmes’ witness statement, and filed and served (with the leave of Commissioner Ryan) an additional witness statement of Mr Bugden. However, the respondent submits that the issue of remedy was very much an arguable point, in light of the discretionary nature of the remedy and the evidence before the Commission on this point. In summary, the School opposed the applicant’s reinstatement on the basis that there had been an irretrievable breakdown of trust and confidence between the parties, and the possible deleterious effect upon the applicant’s health if she were reinstated to her former employment at the School. Detailed submission in this regard were filed by the respondent.
49. Ultimately, while Deputy President Gooley ordered that the applicant be reinstated, she did so on the basis that she did not accept the arguments advanced by the respondent. Nothing in Deputy President Gooley’s decision supports a finding that in opposing reinstatement, the respondent’s arguments were manifestly untenable or groundless, or so lacking in substance as to be not reasonably arguable. On the critical issue of the relationship ‘trust and confidence’ between the parties, Deputy President Gooley was very finely balanced in the applicant’s favour. Deputy President Gooley’s lengthy and considered analysis of the respondent’s submissions supports a conclusion that they were eminently arguable and of some force.” [citations omitted]
[48] The Respondent’s oral submissions on that point were put as follows:
“PN298. MR D’ABACO: ……… To a certain extent then, sir, it’s the same sort of considerations in terms of the high threshold which then inform section 611(2)(b) and the authorities which have dealt with that particular provision, i.e. the argument which is put against my client that it should have been reasonably apparent to it that its defence of Ms Somasundaram’s application had no reasonable prospects of success.
PN299. The authorities make it clear that the Commission has to be satisfied that on an objective basis the respondent ought to have been aware that its response to Ms Somasundaram’s application was manifestly untenable or groundless or so lacking in merit or substance as to not be reasonably arguable. A complete loser of a case from the very beginning to use the vernacular.
PN300. In my submission, at the conclusion of the evidence adduced on behalf of the applicant, it can’t be said that the respondent’s defence of the application was untenable or groundless or that it was so lacking in merit or substance so as not to be reasonably argued.
PN301. The key facts upon which the dismissal was founded weren’t in issue. There was no contest on the parties in respect of whether Ms Somasundaram had addressed the whole school council meeting. She freely accepted that she had. There was no contest between the parties that these emails had been sent. They clearly had been sent and she accepted that she had sent those.
PN302. What was in issue was whether those particular factual matters satisfied, in effect, certain legal tests - was the issue of misconduct. That’s a legal question. Whether or not misconduct has occurred is really a mixed law and fact. Did the conduct occur? Does that constitute misconduct? That, in a way, is a legal issue. Whether the conduct was disgraceful, unbecoming and there’s a third one there which I don’t recall at the moment. That in a way was also questioned of mixed fact and law because it required a conclusion to be drawn, other than simply a conclusion of whether a fact had occurred or not.
PN303. And these were matters which in my respectful submission were reasonably arguable on the part of the respondent. However, at the conclusion of the second day of the cross-examination of Ms Holmes, certain matters came to light for the first time both before the Commission but also to the respondent and those who were representing it. And these were matters which, in my submission, on an objective basis affected the prospects of success. I don’t propose to read them all out. They’re contained in the submissions and I draw your attention to paragraph 46.
PN304. But what happened then is that from that point onwards - from that point onwards - it became apparent on an objective basis that the respondent’s defence of the application was such that there were some prospects - substantial prospects - that it’s defence would not succeed. And at that point in time from that point onwards the respondent did all it possibly could to bring the substantive hearing of the matter to an end.
PN305. You referred to the argument before yourself where application was put by then counsel for the applicant to continue to hear evidence and for her to cross-examine witnesses. The respondent opposed that. They said, “You don’t need to do any of that.” And that ultimately was a submission which was accepted by the Commission.
PN306. ………… And at that point onwards once it was clear on an objective basis that the prospects of success were limited the respondent did all in its power to bring the matter to a speedy conclusion. It took a lot longer than perhaps all parties would have wanted. But, certainly, the substantive hearing came to an end.
PN307. Now, …it’s acknowledged by the respondent that it did continue to contest the issue of remedy and there was reliance upon certain paragraphs of Ms Holmes’ statement and also the evidence which had been adduced on behalf of the applicant.
PN308. Detailed submissions were filed in that regard and as I have already indicated to you, in my submission, a proper reading and a fair reading of Gooley DP’s decision is such that although she did order the remedy of reinstatement it was clearly a reasonable argument which was available to the respondent. There were proper and substantive matters which were put.
PN309. True it is that they were not upheld by Gooley DP but her decision, in my respectful submission, is a finely balanced one and it cannot be said that in maintaining its defence of the application in so far as the issue of remedy was being contested that its conduct was such that ought merit any form of costs order.”
[49] There appears to be a fundamental error in the reasoning of the Respondent in relation to this aspect of the costs application.
[50] The Respondent concedes that on the fourth day of hearing that “it became apparent on an objective basis that the respondent’s defence of the application was such that there were some prospects - substantial prospects - that it’s defence would not succeed.” However the Respondent contended that “at the conclusion of the evidence adduced on behalf of the applicant, it can’t be said that the respondent’s defence of the application was untenable or groundless or that it was so lacking in merit or substance so as not to be reasonably argued.”
[51] The time at which the assessment must be made as to whether it should have been reasonably apparent to the Respondent that Respondent’s response to the application for an unfair dismissal had no reasonable prospect of success was at the time the Form F3 was filed with the Commission. The test to be applied to the Respondent at that time is an objective test and not a subjective test.
[52] Therefore the issue to be determined from an objective assessment is what should have been apparent to the Respondent at the time the Form F3 was filed.
[53] In this matter the change in circumstance which occurred on the fourth day of the hearing and at the end of the second day of Ms Holmes evidence had nothing to do with the evidence of the Applicant. The Respondent’s case became weak (or as counsel for the Respondent put it there was a substantial prospect that the Respondent’s case would not succeed) solely because of the evidence of Ms Holmes. It was the admissions from Ms Holmes as to what she did and as to what she did not do leading to the dismissal of the Applicant that was the undoing of the Respondent’s case.
[54] Nothing Ms Holmes said in her evidence was information which was unavailable to the Respondent at all times leading up to the dismissal of the Applicant and at all times since the dismissal of the Applicant.
[55] As a Full Bench in Hart v Kangan Batman TAFE 8 said of the objective nature of the test:
“The word “should” in this context clearly connotes an objective test. Hence an applicant is not able to simply ignore what the facts were at the relevant time. However, it is clear that one cannot impute knowledge of certain facts to a party simply based on findings ultimately made by the Commission in the matter.”
[56] There is no necessity to try to impute knowledge of certain facts on the Respondent. The facts relating to the conduct of Ms Holmes, as Acting Principal, in dealing with the Applicant and other staff at Sherbrooke Community School were known by Ms Holmes and thus were knowable by the Respondent. Just as the right questions were asked of Ms Holmes under cross examination the same questions could have been asked of Ms Holmes by any of staff of the Respondent before the Applicant had been dismissed and once the Applicant filed an application for an unfair dismissal remedy.
[57] The contention of the Respondent that it only became aware of the facts which created the situation that there was a substantial prospect that the Respondent’s case would not succeed at the end of the second day of Ms Holmes evidence says nothing more than that the Respondent ignored what the facts were at the relevant time.
[58] It would appear that Mr Greenwell, Regional Director and the decision maker in relation to the dismissal of the Applicant would not have been aware of the facts that existed in relation to the way in which Ms Holmes dealt with the Applicant. For the purpose of the determination of the costs application it is not determinative of the issue of “should have been reasonably apparent to the Respondent” that Mr Greenwell did not know all the relevant facts at the time of the dismissal of the Applicant. The test requires determination of what should have been reasonably apparent to the Department of Education and Training at the time the Form F3 was filed.
[59] At that time the Department of Education and Training had access to the facts (Ms Holmes was an employee of the Department at that time) and had the ability to learn of those facts.
[60] There is nothing in the case law which would suggest or countenance that a party which is an incorporeal entity is to be treated differently from a party who is a real person.
[61] The fact that the Department of Education and Training as the Respondent in this matter must always act through real people does not mean that the Department of Education and Training can be held not to know a fact which is known by one of the real persons it acts through.
[62] What Ms Holmes did and what Ms Holmes omitted to do, she did or didn’t do in her capacity as Acting Principal exercising authority for on behalf of the Department of Education and Training and over the Applicant.
[63] The facts which came to light during the extensive cross examination of Ms Holmes were facts which should have been apparent to the Respondent at the time the Form F3 was filed. Those facts made a nonsense of the approach adopted by the Respondent to respond to the Applicant’s application for an unfair dismissal remedy.
[64] Counsel for the Respondent draws attention to the decision of DP Gooley in relation to remedy as disclosing that the Respondent had an arguable case and that it could not be said that the Respondent’s case on remedy had no reasonable prospect of success.
[65] The issue before Gooley DP was not whether a remedy should or should not be granted but whether reinstatement was appropriate or inappropriate. That the Applicant should receive a remedy for her unfair dismissal was not in question. The Respondent had conceded as much on 28 May 2015 when it put an open offer to the Applicant to settle the matter by paying to the Applicant an amount equal to six months’ pay.
[66] The logical consequences which flow from the Respondent’s position as at 28 May 2015 is that it should have been apparent to the Respondent at the time it filed the Form F3 that it had no reasonable prospect of success in stopping the Applicant from obtaining a remedy from the Commission.
[67] The Commission is satisfied that it should have been reasonably apparent to the Respondent that its response to the Applicant’s application for an unfair dismissal remedy had no reasonable prospect of success. A costs order should be made in favour of the Applicant in relation to the costs of the proceedings.
Is the FWC satisfied that the Respondent responded to the application, without reasonable cause?
[68] The approach required to be adopted in answering this question has been set out by a Full Bench in Neil Keep v Performance Automobiles Pty Ltd: 9
“[17] The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing (Church) 10. Church is authority for the following propositions:
(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case. 11
(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. 12
(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. 13
(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’. 14”
[70] In the present matter the start point must be to identify and consider the response made by the Respondent to the Applicant’s application. The Respondent responded to the Applicant’s application for an unfair dismissal remedy when on 19 February 2015 the Respondent filed its Form F3 – Employer Response to Unfair Dismissal Application and the relevant part of that response are the answers to question 3.1 What were the reasons for the dismissal? And question 3.2 What is your response to the Applicant’s contentions?
[71] It is the filing of the Form F3 which has to be considered for the purpose of s.611(2)(a).
[72] The Respondent in its Respondent’s Outline of Submissions on Applicant’s Costs Application contended as follows:
“27. In determining whether a party responded to an unfair dismissal application “without reasonable cause”, a party cannot be said to have made (or defended) an application “without reasonable cause” simply because his or her argument proves unsuccessful.9 In Kanan v Australian Postal and Telecommunications Union [1992] 43 IR 257 at 264-265, Justice Wilcox held:
“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, 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 it appears that, 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.”
28. The test imposed by the expression “without reasonable cause” is similar to that adopted for summary judgement, that is, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless” or “discloses a case which the Court is satisfied cannot succeed”.10 This is an extremely high threshold.” [citations omitted]
[73] Counsel for the Respondent addressed this aspect of the application for costs as follows:
“PN285. That brings us to the second limb of section 611(2)(a) and that is the issue of whether the respondent’s defence of the application was without reasonable cause. The authorities have made it quite clear and I have extracted them in the submissions, Commissioner, is simply because a party is unsuccessful in his or her application or his, her or its defence of an application does not mean that the application itself or the defence of the application was without reasonable cause. Winning or losing isn’t the yardstick.
PN286. Rather, what has to be established indicate a matter is without a reasonable cause is that either the application itself or the defence of it, you have to be satisfied that there were no - that the defence itself - was from the outset absolutely groundless and doomed to fail. That’s a very, very high threshold and it’s why in this Commission costs orders are only made in rare and exceptional circumstances.
PN287. …….. In my submission, the Commission cannot be satisfied that the respondent’s defence of this application had no prospects of success from the outset or that it was groundless and doomed to fail, notwithstanding the fact that you upheld Ms Somasundaram’s application.
PN288. You will recall, sir, that Ms Somasundaram was dismissed principally for three reasons. Her reading aloud of a statement to a whole school meeting on the 19 November 2013, the sending of four emails in the first half of 2014, which it was said in respect of two of them, the latter two were to be - were contrary to a directive that she not send emails and an incident with a fellow teacher.
PN289. The incident with a fellow teacher was not relied upon ultimately by the respondent. The first two. At the time of the dismissal the respondent considered that the applicant’s conduct in respect of those matters was unprofessional, counter-productive to harmonious relationships in the workplace and school community and showed a lack of insight on her part into the effect of her behaviour upon others.
PN290. In my submission, based upon the investigation which had been conducted by Ms Wen in her findings, the views which were taken by the Regional Director, Mr Greenwell, and the ultimate action taken by him and the source materials, that was a view which was reasonably open to the respondent. You disagreed. You disagreed in very strong terms but this was a matter, Commissioner, where reasonable minds will differ. You took a different view. Other people within the department took a view.”
[74] Whilst the test for the application of s.611(2)(a) is different from the test for the application of s.611(2)(b) there is a high degree of similarity between the two tests. As Counsel for the Respondent nicely put it – the Commission would have to be satisfied that the response to the Applicant’s application for an unfair dismissal remedy “was from the outset absolutely groundless and doomed to fail.”
[75] The summary of Church as given in Keep is apposite:
“(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’.”
[76] From the discussion over the operation of s.611(2)(b) in this matter and the conclusion that it should have been reasonably apparent to the Respondent that its response to the Applicant’s application for an unfair dismissal remedy had no reasonable prospect of success, it is not a step too far to also conclude that the Respondent responded to the Applicant’s application for an unfair dismissal remedy without reasonable cause.
[77] This is so because as previously discussed in relation to s.611(2)(a) upon the facts known to the Respondent’s employees at the time of instituting the proceeding, there was no substantial prospect of success.
[78] In all of the circumstances of the present case the Respondent’s denial that it had unfairly dismissed the Applicant and the Respondent’s conduct of a substantial case against the Applicant’s application was clearly a case where the Commission could be and was satisfied that there was a case from the Respondent which cannot succeed.
[79] The Commission is satisfied that the Respondent made its response to the Applicant’s application for an unfair dismissal remedy without reasonable cause. A costs order should be made in favour of the Applicant in relation to the costs of the proceedings.
Is the FWC satisfied that the Respondent caused costs to be incurred by the Applicant because of an unreasonable act of the Respondent in connection with the conduct of the matter?
Is the FWC satisfied that Respondent caused costs to be incurred by the Applicant because of an unreasonable act of the Respondent in connection with the continuation of the matter?
[80] The starting point for any consideration of these two questions is the Full Bench decision in Roy Morgan Research Ltd v Baker which provides a useful guide to the proper application of s.400A.
[81] The Respondent in its Outline of Submissions on Applicant’s Cost Application identified the nature of the Applicant’s cost application under s.400A as follows:
“13. In relation to the matters raised by the applicant in the Application, the First Submission and the Second Submission, the following matters appear to be relevant in respect of the costs application brought pursuant to s 400A of the Act:
(a) The characterisation of two days conciliation before Commissioner Gregory (after the matter had been the subject of 4 days hearing before Commissioner Ryan) as ‘wasted’ (the Application, par. 3.12; the First Submission, par. 10);
(b) An allegation that the respondent “dragged the case out as long as [it] could” to coerce the applicant into accepting a settlement offer (the Application, par. 4.3);
(c) The Respondent’s conduct (after the first 4 days’ hearing before Commissioner Ryan) to withdraw its reliance on almost all of the witness statement (tendered in evidence) of Sue Holmes and its withdrawal of the other witness statements which had been filed (but not yet tendered in evidence) by the respondent (the First Submission, par. 13).”
[82] The three aspects of the Applicant’s case as identified by the Respondent reflect the essential aspects of the Applicant’s case under s.400A. The first two aspects of the Applicant’s case, namely: the 2 day conciliation before Gregory C and the contention that the Respondent “dragged out the case as long as [it] could” cannot and do not meet the tests for a costs order under s.400A.
[83] The conciliation before Gregory C occurred only after the Applicant agreed to participate in such conciliation. The Respondent did not, in asking for and then participating in conciliations to try and settle the matter, engage in conduct which was an unreasonable act in relation to the conduct or continuation of the matter. Whilst the Respondent could have, instead of asking for conciliation, simply made the concessions that it later made after the conciliation had failed, the act of asking for conciliation was not unreasonable. An agreed settlement is always better than an imposed outcome in the sense that such a settlement can only be obtained if both parties are content with the terms of settlement. In such a circumstance both parties are winners. The fact that the conciliation failed does not mean that the exercise of undertaking the conciliation was an unreasonable act on the part of the Respondent.
[84] The Applicant’s contention that it was an unreasonable act of the Respondent in dragging out its case as long as it could is not supported by the evidence relating to the conduct or continuation of the matter. The case was not dragged out by anyone. Most of the matter was dealt with in a timely manner. There is no basis for a finding that the matter was dragged out in any way. There is also no basis for a finding that the Respondent engaged in any unreasonable act during the proceedings which was intended to or had the effect of dragging out the matter.
[85] The third aspect of the Applicant’s case under s.400A relates to the withdrawal by the Respondent of reliance on most of the witness statement of Ms Holmes and the withdrawal of the witness statements of Mr Greenwell, Regional Director, and other Respondent witnesses.
[86] In relation to this aspect of the Applicant’s case the Respondent contends as follows:
“Withdrawal of reliance by respondent on witness statements
22. The respondent submits that this submission is one which more appropriately ought be made pursuant to s 611 of the Act – and indeed, the applicant appears to be doing this. The respondent deals with this submission in greater detail below.
23. Insofar as the Commission is prepared to entertain this submission in the context of s400A of the Act, the respondent’s withdrawal on its reliance on the witness statements shortened the length of what was promising to be a hearing of marathon proportions (see paragraphs 19 and 20 above). The withdrawal led to the applicant saving costs, not incurring them, as from that point the substantive hearing of the application ceased and argument on liability and remedy was conducted upon written submissions alone.”
[87] The Respondent’s counsel at the costs hearing contended as follows:
“PN210. MR D’ABACO: The third aspect which appears to be relied upon by Ms Somasundaram in respect of section 400A is the withdrawal by the respondent of reliance upon the evidence of Ms Holmes and also the indication that it would not be relying upon the evidence contained in the witness statements which had been filed but not yet of course formally tendered.
PN211. I’ll deal with that because I think that’s really the gravamen of her submission, in due course. All I simply note here is that rather than that withdrawal of those statements causing costs to be incurred, it’s saved enormous cost for the applicant. Because had that material been formally tendered and relied upon, the hearing duration would have been extended by a good many days. Given the cross-examination and so forth of the witnesses and the manner in which cross-examination had been conducted to date as evidenced by the cross-examination of Ms Holmes.”
And
“PN259. MR D’ABACO: At the point in time when the respondents conceded liability the insistence of the applicant through her then legal counsel to wish to continue to hear evidence from the respondent was of itself an unreasonable act. The issue of liability had been conceded. The “horse was dead”. Why did you need to flog it into complete and utter submission if the horse had died in terms of the issue of liability?”
[88] The contention from the Respondent that the “horse was dead” misrepresents the true state of affairs at the time the Respondent made the concession that the Commission could find that the dismissal of the Applicant was harsh. The Applicant’s counsel complained at the time the concession was made the Respondent’s concession was insufficient and that the Applicant needed to and should be given the opportunity of further cross examining Ms Holmes and that the Respondent and other named individuals should be required to produce certain documents to the Commission.
[89] Rather than the Respondent’s case being a dead horse which was being flogged into complete and utter submission by the Applicant the reality was very different.
[90] Two sketches from Monty Python come to mind as providing a very good analogy to the position adopted by the Respondent. The first is the Dead Parrot Sketch and the second is the Black Knight Sketch.
[91] The Respondent in this matter acted just as did the pet shop owner in the Dead Parrot Sketch. That the Blue Norwegian Parrot was dead was obvious. However this didn’t stop the pet shop owner from claiming that it was merely sleeping, or that it was merely stunned nor did it stop the pet shop owner from explaining away the fact that the parrot had been nailed to its perch as merely a means to stop it from escaping.
[92] Similarly the Respondent acted just like the Black Knight. When one of his arms is cut off he responds with, “Tis but a scratch.” and when he loses his second arm he retorts with “It’s just a flesh wound”. Finally when the Black Knight has had both arms and both legs cut off he responds with “We’ll call it a draw”.
[93] The humour in both of those Monty Python sketches arises from the sheer absurdity of the situation portrayed. The same sense of absurdity is found in the actions of the Respondent.
[94] Having withdrawn reliance on the vast majority of Ms Holmes evidence and having withdrawn reliance on the witness statement of Mr Greenwell, Regional Director, the decision maker in relation to the dismissal, the Respondent, continued to insist on the need for the Applicant and the Respondent to file written submissions in relation to the matters raised by s.387.
[95] The Respondent, in its written submissions filed with the Commission on 17 July 2015 contended that there was a valid reason for the dismissal of the Applicant. This contention was seriously put by the Respondent even though there was no evidence before the Commission from the decision maker, Mr Greenwell, as to his reasons for dismissing the Applicant and where the Respondent withdrew reliance on any of the evidence of Ms Holmes as to the conduct of the Applicant.
[96] The concession made by the Respondent on 28 May 2015 was, in light of its subsequent actions, no more than a concession that the dead parrot was only stunned or that loss of an arm ‘tis but a scratch’.
[97] Counsel for the Respondent described the conduct of the Applicant in wanting to continue with the evidentiary case after the Respondent had made its concession as being an unreasonable act. Far from being an unreasonable act the approach adopted by the Applicant was necessitated by the conduct of the Respondent. It was the conduct of the Respondent which constituted an unreasonable act or omission in the conduct or continuation of the matter.
[98] Having withdrawn reliance on the vast majority of Ms Holmes evidence and having withdrawn reliance on the witness statement of Mr Greenwell, Regional Director, the decision maker in relation to the dismissal, and having conceded that the Commission could find that the dismissal of the Applicant was harsh it was unreasonable for the Respondent to continue to put the Applicant to the cost of arguing each of the matters referred to in s.387 and replying to the Respondent’s arguments in relation to s.387. Nothing could be gained by the conduct of the Respondent in insisting that both the Applicant and the Respondent continue to argue over s.387 matters.
[99] The Respondent in its Supplementary Submission of 28 May 2015 sought to introduce a new witness, Mr Anthony Bugden, to give evidence in relation to the inappropriateness of the Applicant being reinstated to a position outside the Sherbrooke Community School.
[100] It is relevant to note that the Respondent had been given a proper opportunity to file its outline of submissions and any witness statements and other documentary material that it intended to rely on in relation to all of the issues that were to be addressed by the Commission, including the possible operation of s.391(1)(b). It was an unreasonable act of the Respondent to seek to introduce a new witness (Mr Bugden) at such a late stage in the proceedings when the Respondent had withdrawn reliance on the witness statement of Mr Greenwell, the Regional Director. The Applicant was put to the cost of dealing with the intention of the Respondent to get Mr Bugden’s evidence introduced into the case. The witness statement of Mr Bugden, although filed with the Commission, was never admitted by the Commission. 15
[101] The Commission is satisfied that the Respondent caused costs to be incurred by the Applicant because of an unreasonable act of the Respondent in connection with the conduct or continuation of the matter. A costs order should be made in favour of the Applicant for costs incurred after 28 May 2015.
The nature of the costs orders that should be made
[102] The Applicant has sought to recover all of the costs that she has paid to her legal representatives. What the Applicant seeks is a costs order on an indemnity costs basis or otherwise referred to as solicitor/client costs.
[103] It is without doubt that the Commission can award costs on either a party/party basis or on an indemnity basis.
[104] Where costs are ordered by the Commission the usual order is for party/party costs where the costs are calculated in accordance with the scale of costs provided for in the Regulations.
[105] The Commission may award costs on an indemnity basis but there must be some conduct of the party against whom a costs order is made which warrants a departure from the normal rule that costs are on a party/party basis.
[106] The test for considering when costs should be ordered on an indemnity basis has been considered by the Commission and the courts on many occasions. In 2012 Jones C comprehensively reviewed the case law at that time on indemnity costs in Stanley v QBE Management Services P/L. 16
[107] A common starting point for a discussion of indemnity costs is the High Court decision in Oshlack v Richmond River Council 17. Gaudron and Gummow JJ at para 44 said:
“It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a "solicitor and client" basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.” [references omitted]
[108] The necessary “delinquency on the part of the unsuccessful party” has led to much consideration in the authorities.
[109] In Camm v Linke Nominees Pty Ltd (No 4) 18 Tracey J said that:
“Whilst the categories of case in which indemnity costs might be ordered are not closed, it is necessary for there to be ‘some special or unusual feature in the case to justify the court exercising its discretion’ to order costs on this basis: Preston v Preston [1981] 3 WLR 619 at 637. Normally, indemnity costs will not be ordered unless some harm has been inflicted on the applicant and it can be demonstrated that that harm has flowed from some deliberate and unwarranted decision or action of the party against whom the award is sought: cf Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd [1986] FCA 85; (1986) 10 FCR 177 at 178.”
[110] In Truong Giang Corporation v Quach, 19 Wigney J said:
“11. The relevant principles in relation to the award of indemnity costs are well established. The Court has a broad discretion to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth). Costs ordinarily follow the event and are awarded on a party – party basis unless there are particular or special circumstances which would warrant the Court making a special costs order, including an order that costs be assessed on an indemnity basis: Colgate-Palmolive Company v Cussons Pty Limited [1993] FCA 536; (1993) 46 FCR 225 (Colgate-Palmolive) at 232-234.
1. In Colgate-Palmolive, Sheppard J referred to some of the principles concerning indemnity costs and noted some instances or examples of circumstances which might warrant the exercise of the discretion to order indemnity costs. His Honour plainly did not intend the list to be exhaustive or determinative. The instances include: the making of allegations of fraud that are irrelevant or known to be false; misconduct that causes loss of time to the Court and the other parties; the conduct of proceedings with an ulterior motive or in wilful disregard of known facts or clearly established law; the undue prolongation of a case by groundless contentions; and an imprudent refusal of an offer of compromise (at 233).
1. Putting aside, for the moment, the non-acceptance of the offers of compromise, the circumstances of this case do not fall neatly into any of the instances referred to by Sheppard J. As already indicated, however, that does not matter. The categories of cases where an award of indemnity costs is appropriate is not closed. There could be no doubt that, in an appropriate case, indemnity costs could properly be awarded against a defendant or respondent who defended proceedings on a false and unreasonable basis and thereby exposed the plaintiff or applicant to unnecessary costs and delay. This, however, is not such a case.
[111] In many respects what was posited by Wigney J fits the circumstances of the current matter.
[112] It is appropriate in circumstances where the Department of Education and Training responded to the Applicant’s application for an unfair dismissal remedy on a false and unreasonable basis and thereby exposed the Applicant to unnecessary costs that the Department of Education and Training pay costs to the Applicant on an indemnity costs basis.
Further disposition of the matter
[113] At the costs hearing the Commission advised the parties that the costs hearing would be dealt with in two parts. First, determination of the whether any costs order should be made and secondly, if any costs order is to be made, determining the actual costs to be paid.
[114] This matter will be listed for mention and further programming.
COMMISSIONER
Appearances:
Ms A. Somasundaram on her own behalf.
Mr J. D’Abaco for the respondent.
Hearing details:
2016.
Melbourne:
February 19.
1 (1997) 76 IR 180.
2 [2015] FWCFB 1956.
3 see Wodonga Rural City Council v Lewis (2005) 142 IR 188 at [6], and Baker v Salva Resources Pty Ltd[2011] FWAFB 4014.
4 Wright v Australian Customs Service, PR926115. 23 December 2002.
5 PR932454, 6 June 2003.
6 Ibid at [8], also see Baker v Salva Resources Pty Ltd[2011] FWAFB 4014 at [10]; and Metecno Pty Ltd T/A Bondor v Cameron[2014] FWCFB 2128 at [16].
7 [2011] FWAFB 4014.
8 [2005] AIRC 421.
9 [2015] FWCFB 1956.
10 [2014] FWCFB 810.
11 Ibid at 27.
12 Ibid at 30.
13 see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30].
14 Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88]; Hatchett v Bowater Tutt Industries Pty Ltd (1991) 28 FCR 324 at 327; Re Ross and others, Ex Parte Crozier (2001) 111 IR 282 at [12]; Re Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v Australian Customs Service, PR926115, 23 December 2002 per Giudice J, Williams SDP and Foggo C and Church at [33].
15 Transcript at PN5711 – 5717.
16 [2012] FWA 10154.
17 [1998] HCA 11.
18 [2013] FCA 223 at [49].
19 [2016] FCA 50.
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