Aminjarrinja Enterprises Pty Ltd v Jaimielee Paterson

[2016] FWC 3814

[2016] FWC 3814

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Aminjarrinja Enterprises Pty Ltd
v
Jaimielee Paterson
(U2015/14178)

COMMISSIONER WILSON MELBOURNE, 24 JUNE 2016

Application for costs orders against party involved in an application for an Unfair Dismissal Remedy.

INTRODUCTION

[1] A decision dismissing Jamielee Paterson’s application for an unfair dismissal remedy was published on 31 March 2016. 1 Subsequent to the decision, the Respondent in that matter, Aminjarrinja Enterprises Pty Ltd, made an application to the Fair Work Commission for an order for costs pursuant to s.400A of the Fair Work Act 2009 (the Act) against Ms Paterson. This decision concerns the costs application.

[2] As stated above, Ms Paterson’s application for unfair dismissal was dismissed by me, upon application by the Respondent, pursuant to s.399A of the Act, because I was satisfied that the Applicant had unreasonably failed to comply with a direction of the Fair Work Commission relating to her application.

[3] Having received the application for costs, the Commission issued directions for the provision of written submissions from both parties and proposed to them that the matter would be determined by me on the papers, unless either party requested a hearing. Aminjarrinja Enterprises relies upon its Form F6 – Application for Costs, with its accompanying schedule constituting its submission on the costs application. Ms Paterson did not file any material with the Commission. Neither party requested a hearing. A perusal of the submissions does not indicate that the question now before me involves disputed fact and so I am of the opinion that I am not required, because of s.397 of the Act, to conduct a conference or hearing in relation to the matter. The costs application has, therefore, been determined by me on the papers.

[4] For the reasons set out below, I have declined to issue a costs order as sought by the costs Applicant.

BACKGROUND TO THE COSTS APPLICATION

[5] On 11 November 2015 Ms Paterson lodged her application for unfair dismissal remedy under section 394 of the Act. The application provided that Ms Paterson’s employment had been terminated by Aminjarrinja Enterprises on 20 October 2015.

[6] Directions were issued by me on 22 December 2015 and the matter was listed for hearing on 23 February 2016. The hearing was to address both Ms Paterson’s application for an extension of time for the lodgement of her application, which appeared to have been filed one day outside the prescribed 21 day limit for filing such an application, and the merits of her unfair dismissal application.

[7] Ms Paterson was directed to file material by 22 January 2016. Ms Paterson did not comply with this direction. Aminjarrinja Enterprises then filed an application to dismiss Ms Paterson’s unfair dismissal application pursuant to s.399A(1)(b) of the Act on 17 February 2016.

[8] On 17 February 2016, I communicated to the parties that the s.399A application would be dealt with at the hearing on 23 February, which was conducted by telephone. Ms Paterson attended this hearing, as well as the solicitor for the Respondent. Arising from this hearing, Further Directions were issued by me on 23 February 2016. The Further Directions provided Ms Paterson with a further opportunity to file and serve written submissions. The Further Directions also required her to address the outstanding s.399A application and provide reasons for her failure to comply with the original 22 December 2015 Directions. These Further Directions required compliance from Ms Paterson by 8 March 2016. Ms Paterson was advised that if she failed to comply with the Further Directions, her application may be dismissed.

[9] Ms Paterson did not file any material with the Commission. I then moved to dismiss Ms Paterson’s application for unfair dismissal remedy pursuant to s.399A of the Act.

[10] Aminjarrinja Enterprises lodged its application for costs on 13 April 2016. The costs application discloses the following, relevantly;

• That the costs sought are the costs associated with the response to the unfair dismissal application; the filing of its Form F1 containing the s.399A application to dismiss; and the costs associated with the costs application itself;



• That costs are sought pursuant to s.400A of the Act only, with it submitted that there was an unreasonable act or omission of Ms Paterson in connection with the conduct or continuation of the matter, namely Ms Paterson’s failure to respond to the 22 December 2015 Directions and the 23 February 2016 Further Directions, respectively;



• That costs were incurred in defending the matter and making applications for the matter to be dismissed, noting;

“a. The [costs] Respondent has offered no reasonable excuse for her failure to comply with the directions dated 22 December 2015 despite repeated contact from the FWC, a gratis extension and ample notice from the Respondent concerning its applications.

b. The [costs] Respondent has offered no reasonable excuse for her failure to file and serve written submissions in support of both her application and for an extension of time for lodgment as directed at the hearing on 23 February 2016.”

• That such failure on the part of Ms Paterson constitutes an “unreasonable omission that evidences the pursuit of a claim in an improper or unreasonable manner…and that as a result of this unreasonable omission, the [costs] Applicant suffered financial loss”.

[11] Aminjarrinja Enterprises quantified its application for costs as $1822 and provided an itemised schedule in support of its contention.

LEGISLATION

[12] Section 400A of the Act provides 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.

[13] Relevantly, section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides;

“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.”

CONSIDERATION

[14] Section 400A of the Act allows for costs orders to be made if the Fair Work Commission is satisfied that costs were incurred because of an unreasonable act or omission of a party in connection to the conduct of the case. The Commission’s power to award costs under this provision of the Act is discretionary. There is also a requisite causal link between the act or omission and the costs being incurred.

[15] The costs incurred and claimed by Aminjarrinja Enterprises are in respect of three broad matters, namely;

• The costs associated with responding to the unfair dismissal claim, including compliance with directions of the Commission (items 1-4, and 7-14 of Schedule B);



• The costs associated with the filing of the s.399A application to dismiss (items 5-6 of Schedule B); and



• The costs associated with the costs application itself (items 15-16 of Schedule B).

[16] In respect of the costs associated with responding to the unfair dismissal claim, and to the instructing and drafting of submissions and witness statements, I am not satisfied that an act or omission of Ms Paterson caused such costs to be incurred by Aminjarrinja Enterprises. The preparation of such material is, as far as the requirement to file a Form F3 – Employer Response goes, a requirement prescribed by the Fair Work Commission Rules 2013. In respect of the filing of its written submissions and witness statements, Aminjarrinja Enterprises was directed by me to do so for the timely determination of the matter. Therefore, I find no act or omission on the part of Ms Paterson which caused the associated costs, at least in this respect, to be incurred by Aminjarrinja.

[17] The costs sought by Aminjarrinja are the costs of the services to it from its lawyers. In an environment in which it has been said that the “normal position” is that a person in proceedings before the Commission must appear on their own behalf, 2 I consider it was the Respondent’s choice to retain lawyers at this very early stage of the proceedings and that the costs of such were, in this matter at least, within its discretion.

[18] The s.399A application was filed because Ms Paterson failed to comply with the 22 December 2015 Directions. At that time of that application, Aminjarrinja had not filed its submissions in response to those Directions (and has not done since). Aminjarrinja Enterprises claims the correlating costs in filing that application.

[19] Section s.399A(1) of the Act provides that;

(1) The FWC may, subject to subsection (2), dismiss an application for an order under Division 4 if the FWC is satisfied that the applicant has unreasonably:...
(emphasis added)

[20] When made at first instance, on 17 February 2016, the s.399A application was not granted; instead the Commission heard Ms Paterson’s reasons for non-compliance, reminded her of the seriousness of the matter and issued the Further Directions, requiring her to file her material by no later than an amended date, being 8 March 2016. At the hearing of this matter on 23 February 2016, Ms Paterson indicated to me that she had experienced financial difficulties and trouble accessing her email, the latter owing to a lack of internet access because of her remote location and her inability to pay her internet bill. In granting her an extension to address the original Directions, and to respond to the s.399A application, Ms Paterson was instructed by me, and in no uncertain terms, that these were formal proceedings and that they were not to be taken lightly. After the Further Directions were explained to her, Ms Paterson undertook to be proactive in retrieving her email correspondence and responding to the Further Directions, indicating that she would pay her phone bill which would enable her internet access to do so.

[21] Self-evidently, I did not regard her non-compliance at that time with the 22 December 2015 Directions to be an unreasonable failure to comply with the Commission’s directions. Equally self-evidently, I did regard Ms Paterson’s failure to comply with the Further Directions to be an unreasonable failure to comply on her part.

[22] In granting the s.399A application I was satisfied that Ms Paterson had unreasonably failed to comply with the directions of the Commission, and by then on two occasions. I took into account all the circumstances of the matter, including the context of what was undertaken by her in the hearing on 23 February.

[23] If the failure of the Applicant to comply with directions was unreasonable for the purposes of s.399A, it does not, as a matter of course, follow that such failure will also be unreasonable for the purposes of, and subsequently enliven, the costs provisions under s.400A of the Act. The question, as far as the costs provisions are concerned, is a causal one, that is whether the unreasonable act or omission caused those costs to be incurred.

[24] The requisite test in s.400A is satisfaction by the Commission that one party caused costs to be incurred by another because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter. In this matter I am satisfied that Ms Paterson, in light of the undertaking provided in the course of the hearing, was unreasonable in failing to comply with the Further Directions or to discontinue her application prior to the date by which compliance was required.

[25] While such were grounds for the dismissal of her application pursuant to s.399A of the Act I am not satisfied that this act of Ms Paterson, and her subsequent omission to comply, had the effect of causing Aminjarrinja Enterprises to incur costs. After the compliance date for Ms Paterson to file material in accordance with the Further Directions had elapsed on 8 March 2016, and I moved to dismiss her application, the only costs incurred by the costs Applicant, as outlined in Schedule B, were for the instructing and drafting of the Form F6 – Application for costs. Such an application was made at the discretion of the costs Applicant. I am not satisfied that there exists a causal nexus between the unreasonable act or omission on the part of Ms Paterson and any of the costs incurred by the costs Applicant, and to the extent that there is, I decline to exercise my discretion to order those costs be paid by the Applicant.

[26] For these reasons I decline the costs application of Aminjarrinja Enterprises.

COMMISSIONER

 1   [2016] FWC 1962.

 2 Warrell v Walton [2013] FCA 291, (2013) 233 IR 335, at [24].

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