Andrew Portelli v Baxter Healthcare Pty Ltd T/A Baxter Healthcare

[2017] FWC 2523

[2017] FWC 2523

FAIR WORK COMMISSION

DECISION

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

Andrew Portelli
v
Baxter Healthcare Pty Ltd T/A Baxter Healthcare
(U2016/11819)

COMMISSIONER JOHNS SYDNEY, 9 MAY 2017

Application for costs - Fair Work Act 2009 ss.400A and 611 - Whether application made vexatiously or without reasonable cause.

[1] People who incur legal costs in a matter before the Fair Work Commission (Commission) generally pay their own costs. 1 However, the Commission has the discretion to order one party to an unfair dismissal matter to pay the other party’s legal or representational costs, but only where the Commission is satisfied the matter was commenced or responded:

a) vexatiously or without reasonable cause, or
b) with no reasonable prospect of success. 2

[2] Costs may be awarded to one party if the Commission is satisfied that the costs were incurred as a result of an unreasonable act or omission of the other party. 3

This decision is about whether Andrew Portelli should be held liable for the costs of Baxter Healthcare Pty Ltd (Baxter) which it incurred in defending an unfair dismissal application brought against it by Mr Portelli. Mr Portelli commenced his unfair dismissal application (UFD Application) on 23 September 2016, but discontinued it on 31 January 2017 (that being 6 days before the matter was listed to be heard on 6 February 2017).

On 9 February 2017 Baxter made an Application for Costs. It filed an Amended Application for Costs on 7 April 2017. Baxter seeks costs in the amount of $10,332.00 on an indemnity basis.

[3] The Application for Costs was listed for hearing on 31 March 2017 and 19 April 2017.
[4] At the beginning of the hearing on 31 March 2017 Baxter made an application to be represented by a lawyer, Mr Brad Swebeck from HWL Ebsworth Lawyers (HWLE). A determination of this issue was necessary to ensure that the manner in which the hearing was conducted was fair and just. 4
[5] In Warrell v FWC the Federal Court held that,

“A decision to grant or refuse “permission” for a party to be represented by “a lawyer” pursuant to s 596 cannot be properly characterised as a mere procedural decision. It is a decision which may fundamentally change the dynamics and manner in which a hearing is conducted. It is apparent from the very terms of s 596 that a party “in a matter before FWA” must normally appear on his own behalf. That normal position may only be departed from where an application for permission has been made and resolved in accordance with law, namely where only one or other of the requirements imposed by s 596(2) have been taken into account and considered. The constraints imposed by s 596(2) upon the discretionary power to grant permission reinforce the legislative intent that the granting of permission is far from a mere “formal” act to be acceded to upon the mere making of a request. Even if a request for representation is made, permission may be granted “only if” one or other of the requirements in s 596(2) is satisfied. Even if one or other of those requirements is satisfied, the satisfaction of any requirement is but the condition precedent to the subsequence exercise of the discretion conferred by s 596(2): i.e., “FWA may grant permission…”. The satisfaction of any of the requirements set forth in s 596(2)(a) to (c) thus need not of itself dictate that the discretion is automatically to be exercised in favour of granting ‘permission’.”[at para 24]

[6] Section 596 of the FW Actprovides as follows:

“Representation by lawyers and paid agents
(1)    Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to FWA on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.
(2)    The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a)    it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or
(b)    it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or
(c)    it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.”

[7] The applicant opposed the respondent being represented.
[8] In short the respondent submitted that determining an Application for Costs involves complex technical and legal issues, in relation to which the respondent should be permitted to have legal representation.
[9] After considering the submissions of the parties the Commission, as presently constituted, determined that allowing the respondent to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. 5 Permission was granted pursuant to s.596(2)(a) of the Fair Work Act (FW Act).

The Cost Hearing

[10] At the hearings:

a) the applicant represented himself, and
b) the respondent was, for the reasons explained above, represented by Mr Swebeck.

[11] In advance of the hearings the parties had filed their materials. Consequently, in coming to this decision the Commission, as presently constituted, has had regard to the following materials:

a) Form F6 – Application for costs dated 9 February 2017,
b) Form F6 – Amended Application for Costs dated 7 April 2017,
c) Respondent’s Outline of Submissions Regarding Costs Application (Exhibit R1),
d) Statement of Rania Kristin Yensch Jones and its annexures dated 27 February 2017 (Exhibit R2). Ms Jones was not required for cross-examination, 6
e) Outline of Submissions in Reply of the Respondent Regarding Costs Application (Exhibit R3),
f) Statement of Rania Kristin Yensch Jones and its annexures dated 7 April 2017 (Exhibit R4),
g) Respondent’s Further Outline of Submissions Regarding Costs Application (Exhibit R5),
h) Correspondence from HWL Ebsworth Lawyers dated 7 April 2017 (Exhibit R6),
i) Statement/Submissions of Andrew Portelli and its annexures filed on 31 March 2017 (Exhibit A1), and
j) Email from Andrew Portelli dated 18 April 2017 (Exhibit A2).

Background
[12] Drawing heavily on the material filed by the respondent the background to the UFD Application is summarised as follows:

a) The employment of Mr Portelli with Baxter ceased with effect on 28 July 2016. Baxter says Mr Portelli resigned. Mr Portelli submitted he had no choice but to resign, i.e. that it was a constructive dismissal. Because the UFD Application was discontinued no evidence was lead about this contested fact.

b) On or around 3 August 2016 Mr Portelli entered into a settlement agreement with Baxter in relation to his employment with Baxter and the cessation of that employment (Settlement Agreement). Baxter says the Settlement Agreement was freely entered into by Mr Portelli. Mr Portelli says he signed the Settlement Agreement in circumstances where he was unable to obtain legal advice, was in hospital and also under the influence of medication. I surmise that the applicant contended that he did not have the mental capacity to enter into the Settlement Agreement. Because the UFD Application was discontinued no evidence was lead about this contested fact.

c) On 23 September 2016 (i.e. 57 days after his employment ended and 36 days outside the 21day time limit for unfair dismissal applications) Mr Portelli lodged the UFD Application.

d) On around 5 October 2016 Baxter lodged an employer response with the Commission in response to the UFD Application (Employer Response).

e) In the Employer Response, Baxter raised objections to the UFD Application on the basis that, it submitted, Mr Portelli was not dismissed and Mr Portelli had voluntarily entered into the Settlement Agreement.

f) On 5 October 2016 a copy of the Employer Response was emailed to Mr Portelli.

g) On 4 November 2016 a conciliation conference in respect of the UFD Application was conducted by a Conciliator with the Commission (Conciliation). At the Conciliation, Baxter confirmed that it objected to the UFD Application on the basis that the UFD Application was made out of time, Mr Portelli had voluntarily entered into the Settlement Agreement and Mr Portelli was not dismissed.

h) On 9 November 2016 the Conciliator sent Baxter and Mr Portelli a letter confirming the outcome of the Conciliation (9 November Letter). In the 9 November Letter the Conciliator stated that Mr Portelli had advised that he would discontinue the UFD Application and confirmed that Mr Portelli should complete and return a Form F50 Notice of Discontinuance. A blank Form F50 Notice of Discontinuance was enclosed with the 9 November Letter.

i) On 10 November 2016 Baxter sent a completed "Form F4 Objection to unfair dismissal application" to the Conciliator (Objection). In the Objection, Baxter again raised objections to the UFD Application on the basis that the UFD Application was made out of time, Mr Portelli had entered into the Settlement Agreement and Mr Portelli was not dismissed.

j) On 10 November 2016 the Conciliator sent an email to Baxter confirming that Mr Portelli had advised that he was not continuing with the UFD Application and that the Conciliator had closed the file.

k) On 16 November 2016 Baxter received an email (copied to Mr Portelli) advising that the matter had been allocated within the Commission as presently constituted. The Commission requested a copy of the alleged Settlement Agreement and “contact details of the applicant’s support person (Sharon Morris from the NUW).”

l) On 19 December 2016 Baxter complied with the Commission’s request for a copy of the alleged Settlement Agreement and “contact details of the applicant’s support person (Sharon Morris from the NUW).”

m) Also on 19 December 2016 Mr Portelli wrote to the Commission in the following terms,

“I wish to reopen my case as I believe it falls under constructive dismissal, I was left with no option but to resign as my only other option was to be terminated because I was falsely accused of bullying and because of a workcover injury I was receiving treatment for.

My NUW representative advised me that an unfair dismissal claim would be costly to pursue considering the claims Baxter had made about me, also that it would be hard to prove my innocence.

I believe that I have been bullied by Baxter as I had been very vocal in reporting Chain Of Responsibility breeches of legislation that Baxter were committing and because of my refusal to sign documentation for overweight trucks leaving the site, all of which I reported to Senior Management and Directors.

I also was responsible for reporting numerous safety breeches occurring on site involving high reach equipment among other issues. I was branded as a whistleblower by Senior Management & HR and was forced into resigning. I am able to provide evidence that has recently come to light to prove that I was falsely accused.

I believe Baxter has used this method to dismiss employees on other occasions.

I was, and still am on medication for depression as a result of this whole ordeal, and it has made me delay my responses. I apologise for my delays but I struggle to clear my head in these difficult times.”

n) On 20 December 2016 the Commission listed the matter for hearing on 18 January 2017 7 and wrote to the parties in the following terms,

“The Commissioner has reviewed the Settlement Agreement purported to be executed by the applicant on 28 July 2016.

The Commissioner notes that the Settlement Agreement includes terms which,

1. Have the applicant acknowledging that the payments made are in “full and final satisfaction of all claims … [including in relation to ] unfair dismissal” (clause 2),
2. Provide that the applicant “releases [the respondent from all claims relating to] cessation of employment…” (clause 3),
3. Allows the respondent to plead the Settlement Agreement “as a bar to any proceedings” (clause 5).

In the face of such a comprehensive Settlement Agreement, the Commissioner remains to be convinced that the Commission can exercise any jurisdiction in relation to the matter.”

a) On 21 December 2016, Baxter's legal representatives, HWLE sent an email to the Commission confirming that Baxter objected to Application on the basis that:

i. Mr Portelli voluntarily entered into the Settlement Agreement which barred him from bringing any future claims against Baxter,

ii. Mr Portelli was not dismissed, and

iii. the UFD Application was made out of time.

(21 December Email)

a) Mr Portelli was copied into the 21 December Email.

b) On 22 December 2016, HWLE sent an email to the Commission in which, amongst other things, it confirmed that Baxter proposed to make an application for security for costs. Mr Portelli was copied into that email.

c) Later that day, 22 December 2016, on behalf of Baxter, HWLE lodged a "Form F6 Application for security for payment of costs" (Security for Costs Application) via email to the Commission. Mr Portelli was served with the Security for Costs Application.

d) In the Security for Costs Application, Baxter:

i. confirmed that it objected to the UFD Application on the basis that:

A. Mr Portelli voluntarily entered into the Settlement agreement which barred him from bringing any future claims against Baxter,

B. Mr Portelli was not dismissed, and

C. the UFD Application was made out of time,

i. stated that it considered the UFD Application hopeless and bound to fail and that it had high prospects of success in making out its objections, and

ii. indicated that it would make an application for costs against Mr Portelli if it was successful in defending the UFD Application.

a) In the Security for Costs Application, Baxter sought an order for the payment of $7,000 by Mr Portelli by way of security for costs.

b) On 25 January 2017 Mr Portelli filed an outline of submissions and other materials in the Commission.

c) On 27 January 2017 Baxter filed the following documents in the Commission:

i. Outline of Submissions Regarding Jurisdictional Objections,

ii. Outline of Submissions Regarding Security for Costs Application,

iii. Outline of Submissions Regarding Permission to Be Represented, and

iv. Witness Statement of Alison Johanna Jonas dated 27 January 2017.

a) At least by 30 January 2017 the applicant was minded to discontinue his UFD Application. However, he was concerned that the respondent might make an application for costs against him. The applicant contacted his union representative. The following text message exchange occurred,

“Applicant: ‘Should I contact the respondent and informed them of my decision first in case they intend on covering costs even if I cancel? Otherwise there is no point in cancelling is that?’

Union rep: ‘No you simply withdraw. Asking them if they are doing it will tell them to. Everything I’m being told is it won’t proceed farther.’

Applicant: ‘I hope you are correct, I am worried that they will pursue.’

‘And I don’t know what to do if they end up going this way,’

Union rep: ‘There is nothing else I can tell you. Likelihood is they won’t ask for costs that the sooner you do it the better it is. I’ve given you all the information I have.’”

b) On 31 January 2017 Mr Portelli lodged a "Form F50 Notice of Discontinuance" with the Commission via email.

Legislation

[13] Section 402 of the FW Act provides that an application for costs under s.611 and s.400A must be made within 14 days after the matter is determined by the Commission. Baxter’s Application for Costs was made on 9 February 2017 (i.e. 9 days after the filing of the Notice of Discontinuance) and, therefore, within the specified time period. Accordingly s.402 of the FW Act is satisfied.
[14] It is important to remember that there is a presumption contained in the FW Act against awarding costs and that the power to award costs is discretionary. It is a two stage process:

a) decide whether there is power to award costs, and
b) if there is power, consider whether the discretion to award costs is appropriate. 8

[15] In another application for costs, I observed:

“[5] It might be said that the Applicant has suffered enough … and that the imposition of a costs order is akin to kicking a man when he is down. It might be said that an Application for Costs in the present circumstances lacks a sense of Christian charity or empathy with the Applicant’s plight.
[6] However, Respondents aggrieved by the costs they have incurred in the defence of an unsuccessful unfair dismissal application, are not required to act charitably or empathetically. Further, whether an Application for Costs offends against common notions of decency is irrelevant.
[7] Consequently, the Commission, as presently constituted, has not entertained thoughts of charity, empathy or decency in deciding whether the Respondent should succeed in its Application for Costs. However, s.577 of the FW Act does require the Commission to perform its functions and exercise its powers in a manner that is fair and just. Further, s.578 of the FW Act which requires the Commission to take into account equity, good conscience and the merits of matter. 9”

[16] Those remarks are equally apposite in the present matter.
[17] Section 611 of the FW Act provides as follows:

“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).”

[18] In order for Mr Portelli’s UFD Application to be characterised as “vexatious”:

a) the main purpose of it must have been to harass, annoy or embarrass Baxter, 10 or
b) there must have been another purpose for the UFD Application other than the settlement of the issues arising in it. 11

[19] The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. 12

In order for Mr Portelli’s UFD Application to be characterised as having been made ‘without reasonable cause’ I must find that:

a) it was ‘so obviously untenable that [it could not] possibly succeed’,
b) it was ‘manifestly groundless’,
c) it was ‘so manifestly faulty that it [did] not admit of argument’,
d) it ‘disclose[d] a case which the [Commission] is satisfied [could not] succeed’, or
e) ‘under no possibility [could] there be a good cause of action’. 13

[20] I may also consider whether, at the time the application was made, there was a ‘substantial prospect of success.’ 14 Importantly, it is inappropriate to find that an unfair dismissal application was without reasonable cause if success depends on the resolution of an arguable point of law.15

Because:

a) an application is not without reasonable cause just because the Commission rejects a person’s arguments, 16 and
b) a proceeding is not to be classed as being instituted without reasonable cause simply because it fails, but rather in circumstances where on the applicant’s own version of the facts, it is clear that the proceeding must fail, 17

it must follow that an unfair dismissal application is not without reasonable cause or instituted without reasonable cause just because the applicant, at some point, decides to file a Notice of Discontinuance.

[21] In summary, a finding that an unfair dismissal application has no reasonable prospects of success should be reached with extreme caution and should only be reached when an application is ‘manifestly untenable or groundless’. 18

Section 400A of the FW 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.”

[22] Therefore s.400A sets out additional circumstances in which the Commission can make costs orders against parties in unfair dismissal matters. The Commission may order costs against a party to an unfair dismissal if the first party caused the second party to incur costs:

a) because of an unreasonable act or omission, or
b) in connection with the conduct or continuation of the matter.

[23] What is unreasonable will depend on the circumstances. 19 It is intended that costs only be ordered where there is clear evidence of unreasonable conduct.20
Submissions of Baxter
[24] In the original Security for Costs Application Baxter sought $14,985.00. In its amended Security for Costs Application it sought $10,332.00. In either case it can be observed that, when the amounts charged are compared with the work described in the itemised schedule of costs, in choosing HWLE as its representative Baxter chose a “Rolls Royce service”. That is a matter for it, but it is doubtful that all the costs charged would survive a party-party costs assessment as to what was truly necessary and reasonable in a matter such as this. The following exchange highlights my concern,

“The Commissioner:  ….  You can run your case how you like.  What I'm trying to figure out here - you know - what is fair and reasonable in the necessary defence of this matter, such that if I were to find that the application made by Mr Portelli was doomed to fail which parts of that should he bear the liability for?  Now, you know in item four in the itemised schedule it says, "Considering and settling correspondence to Fair Work Commission and applicant and security for costs."

When I look at the letter of the 22 December it says, “Dear Associate refer to the above matter.  Please find attached security for costs application.  We confirm the applicant in this matter, Mr Portelli, has been copied into this email and we hereby service the security for costs application on Mr Portelli.”  And then I look at the security for costs application and are fairly standard in form.  I can’t understand how considering that takes 800 bucks worth of time – honestly – really?

….

Mr Swebeck:  ….  This is item four, Commissioner?

The Commissioner:  Yes.

Mr Swebeck:  Without knowing what the correspondence was with the client I would suggest that in our view, Commissioner, that that is a reasonable amount of time spent in preparing the application, preparing the correspondence to the Fair Work Commission and also any correspondence that might have been sent to the client in terms of the seeking of instructions as to where those security of costs applications should be filed.

The Commissioner:  But who did that considering and settling?

Mr Swebeck:  I can't recall, Commissioner, without the - it probably would have been my time - but I can't confirm that.

The Commissioner:  What's your hourly rate?

Mr Swebeck:  450 from memory.

The Commissioner:  Well, it took you nearly two hours to read a one, two, three, four paragraph email and a standard form six-page application for security of costs.  You've got to be joking here.”

[25] In any case the respondent seeks costs on an indemnity basis.
[26] Baxter submitted that,

“20. The Application had no reasonable prospects of success on the basis that:

a. The Commission had no jurisdiction to determine the merits of the Application because:

I. the Application was lodged outside the time limitation provided for such applications in section 394 of the Fair Work Act 2009 (Cth) (FW Act); and
II. the Applicant was not "unfairly dismissed" within the meaning of section 385 of the FW Act because the Applicant was not dismissed within the meaning of section 386 of the FW Act (or at all);and

b. Mr Portelli was prevented from bringing the Application by reason of the Settlement Agreement.

21. As such, the Application was at all times "hopeless and bound to fail" (Merribee Pastoral v ANZ Banking Group [1998]193 CLR 502) and made vexatiously and/or without reasonable cause.

22. Mr Portelli was put on notice of Baxter's objections to the Application as early as 5 October 2016. Mr Portelli was again put on notice of Baxter's objections at the Conciliation on 4 November 2016 and in correspondence on 21 December 2016 and 22 December 2016. Mr Portelli was put on notice on 22 December 2016 that Baxter would make an application for costs if it was successful in defending the Application. Notwithstanding this, Mr Portelli proceeded with the Application and failed to discontinue the Application until 31January 2017.
23. By reason of the Applicant's unreasonable conduct, Baxter has incurred costs in defending the Application.
24. In all the circumstances, an order ought to be made under 611 of the FW Act for Mr Portelli to pay Baxter's costs on the basis that:

a. the Application was made vexatiously and/or without reasonable cause; and

b. it should have been reasonably apparent to the Applicant that the Application had no reasonable prospects of success.

25. Further or in the alternative, an order ought to be made under section 400A of the FW Act for Mr Portelli to pay Baxter's costs on the basis that Mr Portelli caused Baxter to incur costs because of the Applicant's unreasonable continuation of the matter.”

Submissions of Portelli

[27] Mr Portelli submitted that,

“1. Around 01/12/15 I called Mick Tomruk and Daniel Van Vemde to meet to inform them that I have started taking medication for Depression. I showed them the fact sheets for both medication as they explained the possible side effects (Document (i)), and asked them to let me know of any change in my behaviours. The next day 02/12/15 Daniel called me upstairs and informed me that I was to be transferred to Wetherill Park. I told him that this was the second time somebody has tried to move me over to that warehouse. I told him that I am sick of the constant harassment from him and that I believed that he was targeting me. (Refer to Diary Transcripts- Document (A) & Doctors Certificate- Document (D))
2. On the 28th/06/16 I took the day off sick as I struggled to sleep due to anxiety attacks during the night, I rang my Union Rep- Sharon Morris to inform her and decided it would be best to meet up to discuss the allegations against me. On the following day- 29/06/16 Daniel Van Vemde- Warehouse Manager informed me that he would not be paying me sick leave for that day as I did not produce a Doctors certificate, to my knowledge I am the first person to have had this happen to. I rang Sharon and informed her of this and she told me she would take care of it. (refer to Diary Transcripts- Document (A))
3. Meeting with HR on 28/07/16 to discuss the investigation into bullying allegations made against me by Carley which I have always argued to be false. My Union Rep was present as my support person. The meeting went for two hours, in this time I defended myself and brought up valid answers to the investigation findings. It made no difference in the end as I was told that Baxter wishes to terminate employment effective immediately. I asked if I would be paid my long service leave if I was terminated and Alison said I would not, Alison informed me if I resigned that I would. I had 5 mins to discuss with Sharon and it was decided that the only option would be to take the money and so I would not have a termination on my record. I asked Sharon about an unfair dismissal claim and she replied that it is costly and the union would not likely support me given the bullying investigation. I did not get a chance to go over all the adverse treatment I had been exposed to in the year leading up to this event with my union rep and she did not have a background of the full circumstances involved in the lead up to this event. I have this information immediately available if needed.
4. On 02/08/16 I was admitted to hospital for my Workcover Operation on my shoulder which Baxter was aware of prior to the bullying accusations. I was sent a Separation Certificate on the 28/07/16 and only had 2 working days to comply which made it difficult to seek further legal advice other than the union whilst in hospital and under the influence of medication. I panicked and didn’t know what to do, so to my regret I signed the document. ( Refer to Document (B) & email to my personal email address from Louise Busuttil (E))
5. In the weeks to follow I was recovering from my operation and struggling with my depression because what had happened. Based on what my Union Rep had told me and the fact that I was silly enough to sign the settlement agreement whilst under the influence of medication I didn’t believe that I would be able to lodge a complaint for constructive dismissal to the FWC. I wanted to seek legal advice but was unable to drive and also felt that I would be unable to afford legal representation. It wasn’t until I heard that another employee- Richard Caruana was terminated for similar reasons as me and it also involved Carley Kneller. He mentioned to me that I could contact the FWC and then I decided to contact the FWC and found out I was able to represent myself so I lodged my claim. ( Refer to Diary Transcripts- Document (A) & Workcover Certificates- Document (C))
6. I believe that I was forced into resigning because of raising safety issues with management and the HR department. The allegations of bullying towards Carley Kneller were false and the investigation conducted by HR was one sided. I have attached witness statements (Document (J)) by Daren Buckley, Ron Barrow, Mick Tomruk and Peter Gibson that tell a different story and will also show the adverse treatment I received by management after reporting safety hazards and breeches in Chain of Responsibility legislation. I believe because of all the points made above I should lodge an application with the FWC. I believe that my case had a exceptional chance of success, and it was unfortunate that I was unable to afford legal advice to find out about the 21 day cut off, I also put this down to being in recovery from my operation, being on Panadeine Forte, Tramadole and my Depression medication- Eleva and Ativan- (See fact sheets for side effects- Document (i))
7. I was scheduled for a hearing with the Commission on the 6th of February to establish exceptional circumstances.
8. On the 4th January I was sent an email from Alison Jonas and their Lawyers accusing me of being in possession of confidential documents i replied that i was not in possession of any documents belonging to Baxter.
9. On the 17th of January my Fiancé Asli Ozkasim- who is still employed at Baxter received a formal letter from the HR department about somebody observing some sort of document in her car. (See attached letter Document (F)) It states that the document was clearly visible to anyone walking past the car, I have also attached a photo from the window (Document (G)). As you can see it was not clearly visible for anybody to see and it became clear to Asli that she was now being watched and harassed by Baxter because of her association with me and my case lodged with the FWC. She felt that the HR department were taking steps to put pressure on me to drop the case or even to taking steps to terminate her employment. Asli went to her car and got the document in question which turned out to be a blank Baxter writing pad and handed it to Louise Busuttil. Asli did not tell me about this until the 26th of January to not add to my stress. We then had a discussion about the incident and we both came to the conclusion that perhaps it would be better for her if I discontinued the case so that she did not lose her job. This is outlined in the statement from Asli. (Document(K))
10. On the 30th of January I contacted my Union Representative, Sharon Morris. I asked her about how I go about discontinuing the case, I also pointed out my concerns with the Respondent pursuing costs if I discontinued at this stage. She responded by telling me that she was being told by her team that it would not continue any further and that it would be unlikely that they would pursue costs. I have attached the SMS conversation (Document(H)).
11. I took Sharon’s advice and Asli’s concern for being further harassed by Baxter and possibly losing her employment and decided to file my discontinuance on the 31st of January. To my shock and dismay the Respondent filed for costs on the 2nd of February.
12. As I am an unrepresented litigant I’m unable to obtain legal representation as a consequence. I could not seek representation from my union the National Union of Workers (NUW) due to the fact that I joined with a pre-existing issue. It is the union’s policy not to assist members who have joined under these circumstances. I am unable to afford any costs.
13. I believe that I had a claim that was valid and that the reasons I was forced into resigning were unjust and harsh. I had a good employment record and had no warnings with respect to my conduct or performance prior to the incident and complaints that led to me being forced to resign. The filing of the Notice of Discontinuance was not due to the fact that you felt that you would not win the case. I certainly did not file the case with an intention to be vexatious in any way. It was my illness and my concern for my Fiancé- Asli Ozkasim and her employment security which were motivating factors for me to discontinue proceedings.
14. I acknowledge that my former employer Baxter Healthcare did incur legal costs in preparing for the hearing but the fact that the hearing did not proceed would have limited those costs.
In summary I would like to say that I never believed that my case had “no chance of success” nor was it Vexatious in any way. I still believe that if I was given the chance to bring my case before the Commission that I would have an great chance of success, had it not been the fact that I was late with my submission- which I was oblivious to at the time I would have a great chance of success, but given the advice from the union in both cases and the circumstances at the time and my condition which involved various medications for my injury and my depression I do not believe I was thinking straight enough to make informed decisions. As my GP is currently on leave I will endeavour to get a certificate that indicates that I was unable to continue with proceedings due to my anxiety and depressive state. I do not find myself in the position to be able to cover any costs as I am still unemployed.”

The UFD Application

[28] In his F2 UFD Application filed on 23 September 2016 Mr Portelli,

a) indicated that his employment,

i. commenced on 11 January 2007,

ii. ceased on 28 July 2016,

a) conceded that his UFD Application was out of time. He wrote,

“I was forced to resign on 28 July, on 2 August I was in hospital for an operation on my shoulder which was a work-related injury and covered under WorkCover I have since been recovering from the procedure and also am suffering depression as a result of this and am on medication to help this. I was unaware of my rights and because I was forced to resign and sign a separation agreement I did not think I was eligible for this. A colleague was also unfairly dismissed recently and he advised me to seek further advice from the Fair Work Commission. I believe I was forced to resign because of safety hazards that I raised and were not acted upon, also because of my WorkCover injury.”

b) claimed he had been falsely accused of bullying, and

c) said he was seeking “compensation for being dismissed because of the complaints raised about safety concerns that went unanswered and my bullying claims not being acted upon prior to my notification of dismissal.”

[29] In its F3 Employer Response to Unfair Dismissal Application filed on 5 October 2016 Baxter,

a) submitted that the applicant was not dismissed but that he had resigned by mutual agreement, and

b) raised one objection to the Commission exercising jurisdiction in relation to the UFD Application on the ground that there was a legally binding agreement that confirms that the applicant resigned and that therefore the applicant had not been dismissed.

Consideration – s.611

Was Mr Portelli’s UFD Application made vexatiously (s.611(2)(a))?

[30] In its written submissions Baxter properly identified Attorney-General v Wentworth as the relevant authority and submitted that,

“… In light of the facts giving rise to the Objections, the Application was so obviously untenable manifestly groundless as be utterly hopeless and therefore made vexatiously.”

[31] I do not accept that this logic necessarily follows from the making of the UFD Application.
[32] In his written material and before the Commission during the costs hearing Mr Portelli presented as a plain and uncomplicated individual who, it seemed, had some difficulty in understanding the matters alleged against him. Rather than being motivated to harass, annoy or embarrass Baxter, Mr Portelli presented (in his written material and before the Commission) as someone who genuinely and strongly believed he had been constructively dismissed and unfairly so.
[33] Nothing in the evidence before the Commission demonstrated that Mr Portelli was motivated by the intention of engaging with the Commission in a manner that was vexatious with the intent to harass or embarrass Baxter or to gain a collateral advantage.
[34] There is nothing in the evidence before me that would enable me to make a finding that Mr Portelli had any other motive in pursuing his dismissal other than to seek justice in his mind for what he believed was an unfair dismissal. On that basis I do not find Mr Portelli to have made a vexatious application.
[35] The Commission, as presently constituted, is not satisfied the application was made vexatiously.
Was Mr Portelli’s UFD Application made without reasonable cause (s.611(2)(b))?
[36] Baxter submitted that,

“…upon the facts apparent to the Applicant at the time of instituting to Proceedings, a reasonable person reviewing all the circumstances of the matter would have come to the view that there was no substantial prospect of success, and therefore the application was made without reasonable cause.”

[37] Baxter correctly frames the issues to be determined. In considering whether Mr Portelli pursued his application ‘without proper cause’ or ‘reasonable cause’ an assessment needs to be made as to whether the application had no reasonable prospects of success, and if done objectively, that fact should have been reasonably apparent to Mr Portelli.

Should it have been reasonably apparent to Mr Portelli that his UFD Application had no reasonable prospect of success (s.611(2)(b))?

[38] There is no evidence before me that would enable me to make a finding that Mr Portelli was aware, or should have been aware that his UFD Application would not succeed at the time of lodging his UFD Application.
[39] Baxter submitted that,

“33. The Commission has held that the reference point for determining whether section 611(2)(b) of the FW Act is satisfied cannot be limited to the time at which the application is made but applies in the course of proceedings until the time at which the matter is determined by the Commission or discontinued. 21

34. The Respondent submits that … it should have been reasonably apparent to the Applicant prior to the filing of the Application that it had no reasonable prospects of success.

35. Even if this should not have been reasonably apparent to the Application at the time of filing the Application (which is denied), the Respondent submits that it should have been reasonably apparent to the Applicant at an early stage in the Proceedings. In this respect, the Applicant was put on notice of the Objections, which rendered the Application hopeless, on the following occasions:

a. on 5 October 2016, when the Employer Response was filed;

b. on 4 November 2016, at the Conciliation;

c. on 21 December 2016, being the date of the 21 December Email;

d. on 22 December 2016, when the Security for Costs Application was filed; and

e. on 27 January 2016, when the Respondent's evidence and submissions were filed.”

[40] All that can be said of the material filed by the respondent is that it demonstrated that Baxter firmly believed in its position that the applicant could not be successful in his UFD Application. That firm belief on behalf of Baxter is not, in and of itself, proof that the UFD Application had no reasonable prospect of success.
[41] The material filed by the respondent suggested that the applicant had a difficult task to overcome the objections raised. However, it was not a lay down misère. The respondent’s materials were not enough to establish that the applicant’s case was one that:

a) was ‘so obviously untenable that it could not possibly succeed’,
b) was ‘manifestly groundless’,
c) was ‘so manifestly faulty that it [did] not admit of argument’,
d) it ‘disclose[d] a case which the [Commission] is satisfied [could not] succeed’, or

e) ‘under no possibility [could] there be a good cause of action’.

[42] Because the UFD Application was discontinued none of the contested issues were put to the test. On the materials before the Commission it is difficult to determine whether Mr Portelli’s matter would have had a reasonable prospect of success had an extension of time been granted. But there is some utility in considering what might have occurred had the UFD Application not been discontinued.

The extension of time objection

[43] Relevant to the Commission considering whether an extension of time to lodge the application should be granted is s 394(3) of the FW Act:

“(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.”

[44] Section 394(3) of the FW Act states that the Commission may allow a further period to lodge an application provided there are “exceptional circumstances” taking into account the five nominated criteria. The principles are well established and set out in a decision of a Full Bench of Fair Work Australia (as the national tribunal was then called) in Nulty v Blue Star Group. 22 In that matter the Full Bench held the following in relation to “exceptional circumstances”:

“[13] In summary, the expression “exceptional circumstances” has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered…”

[45] In reviewing the material the following can be said about what might have been determined in respect of the s.394(3) criteria,
Section 394(3)(a) - The reason for the delay
[46] It is undisputable that there were 57 days between when the cessation of the applicant’s employment took effect and when a proper application was filed with the Commission. That is to say the UFD Application was 36 days late.
[47] The applicant says the reason for delay was related to his recovery from surgery that he underwent immediately following the termination of his employment. He submitted that,

“In the weeks to follow those recovering from an operation and struggling with my depression because of what it happened. Based on what my union rep had told me and the fact that I was silly enough to sign the settlement agreement whilst under the influence of medication I didn’t believe that I was able to lodge a complaint for constructive dismissal to the FWC. I wanted to seek legal advice but was unable to drive I also felt that I would be unable to afford legal representation.”

[48] During the hearing Mr Portelli said he “was suffering from depression” 23 and provided a medical certificate which confirmed he was depressed from 17 November 2015 to 3 January 2017.24

Noting that exceptional circumstances can arise out of a combination of events, in circumstances, such as the present, where the applicant attributes the reason for delay to his medical condition and also representative error, his application for an extension of time cannot be said to be obviously untenable, manifestly groundless or one that discloses a case which could not succeed. There are many decisions of this Commission where just one of the reasons asserted by the applicant has been accepted as exceptional circumstances. In the present matter the applicant relies upon a combination of two potentially credible reason is for the delay.

Consequently, this factor could have weighed in favour of granting the applicant an extension of time had the matter been fully argued before the Commission.

Section 394(3)(b) - Whether the person first became aware of the dismissal after it had taken effect
[49] It is uncontested that the applicant first became aware of the cessation of his employment on 28 July 2017.
[50] This factor would likely have weighed against granting the applicant an extension of time.
Section 394(3)(c) - Any action taken by the person to dispute the dismissal
[51] The filing of the UFD Application was the only action taken by the applicant following the cessation of his employment.
[52] The limited action taken by the applicant would likely have either weighed against or been a neutral consideration in deciding whether to grant the applicant a further period to make his application.
Section 394(3)(d) - Prejudice to the employer (including prejudice caused by the delay)
[53] Noting the period of the delay it is difficult to see how the respondent would suffer any prejudice other than the usual prejudice associated with delay. There would be no exceptional prejudice.
[54] Consequently, the prejudice would likely have been a neutral factor in considering whether to grant the extension of time.
Section 394(3)(e) - The merits of the application
[55] In the matter of Kornicki v Telstra-Network Technology Group 25the Commission considered the principles applicable to the extension of time discretion under the former s.170CE(8) of the Workplace Relations Act 1996 (Cth). In that case the Commission said re:

“The merits of the substantive application. If the application has no merit then it would not be unfair to refuse to extend the time period for lodgement. However we wish to emphasise that a consideration of the merits of the substantive application for relief in the context of an extension of time application does not require a detailed analysis of the substantive merits. It would be sufficient for the applicant to establish that the substantive application was not without merit.” 26

[56] The Commission, as presently constituted, further notes that in deciding the present matter (had a Notice of Discontinuance not been filed), it would not have been permitted to “embark on a detailed consideration of the substantive case.” 27

The substantive factual contest between the applicant and the respondent is whether there was a constructive dismissal.

Mr Portelli said,

“Well, at the time I felt that I was put in a position that I had no other option but to resign.  I felt that the whole reason that I was put in that position, and that being the case that I was accused of bullying somebody was false and as you could imagine anyone at the time, they don't want a termination on the record, taking into account that I was due to go to into hospital on a WorkCover - for a WorkCover operation - I thought to myself that I had no other option.  Because, you know, if I was terminated that coupled with the fact that I have been on workers' comp was going to cancel my chances of finding another job which I might add I'm still unemployed.  So at the time I thought that was my only option to resign.” 28

[57] The circumstances described by the applicant, including an alleged threat of termination (if he did not resign) and a threat to the payment of his long service leave (if he was terminated summarily), support a possible finding that there was a constructive dismissal. On the applicant’s version of events his application could not be said to be doomed to fail. Mr Swebeck conceded that “the resignation was put into effect so that it would enable Mr Portelli to obtain an amount of money with respect of long-service leave.” 29

If the applicant had been able to establish that that there was a constructive dismissal then he may have been able to establish that the termination of his employment was harsh, unjust or unreasonable and, consequently, unfair. In this regard it is likely that there would have been a finding that the applicant’s case was not without merit or lacking in any substance. Consequently, this factor would likely have weighed in favour of granting applicant a further period to make his application.

Section 394(3)(f) - Fairness as between the person and other persons in a similar position
[58] Having reviewed the materials it not apparent that the issue of fairness as between the applicant and other persons in a similar position would have been a relevant consideration in this matter. It would likely have been a neutral consideration in determining whether to grant an extension of time.
[59] Having reviewed the elements of s.394(3) it is readily apparent that it would have been open to the Commission to find, on balance, in the exercise of its discretion that it was satisfied that there were exceptional circumstances warranting the applicant being allowed a further period for his UFD Application to be made (i.e. being granted an extension of time to lodge his application). That is to say, the applicant’s extension of time application was not doomed to fail even on his own version of events.

The Settlement Agreement objection

[60] It is obvious from the email that I sent to the parties on 20 December 2016 that I had a very real concern about the impediment that the Settlement Agreement may have presented to the applicant being able to continue with his UFD Application. It presented a real obstacle for him to overcome.
[61] The respondent submitted that it was a clear example of accord and satisfaction. 30 An amount of money was paid to Mr Portelli in exchange for the releases and other promises made by him in the Settlement Agreement.31

However, while settlement agreements entered into freely with the consent of the parties who are competent to do so will bind the parties, in the present matter, the applicant alleged he was not competent to enter into the Settlement Agreement because he was in hospital and on medication at the time.

[62] Mr Portelli said,

“…when I come out of surgery my fiancée was with me and she said, "Look, you haven't signed these documents."  Stupidly I didn't read through them properly and I just signed the documents.

You can imagine in the release statement in the hospital it does say there I wasn't supposed to sign any legal documents up until 24 hours after my operation.” 32

[63] Genuine consent is an essential requirement and if the applicant could have established that he lacked the capacity to enter into the Settlement Agreement it may have been set aside. It would not be the first time that this Commission has given weight to the circumstances under which a settlement agreement/deed was executed. 33

The “not dismissed” objection

[64] I have already dealt with this issue in considering the merits of the claim in the context of the extension of time objection. It seems to me that the applicant’s argument that he was constructively dismissed was not without merit.
Conclusion in relation to no reasonable prospect of success (s.611(2)(b))
[65] Having considered each of the objections raised by the respondent, it is apparent that a reasonable person (in this case Mr Portelli) at the time of making his application, there was no substantial information before him in relation to his unfair dismissal claim that would indicate to him that he was likely to be unsuccessful, especially given there was a dispute about whether there was a constructive dismissal and whether, at the time that he entered into the Settlement Agreement, he had the capacity to do so.
[66] Mr Portelli cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a) or in circumstances where there was ‘no reasonable prospect of success’. The fact that he filed a Notice of Discontinuance is not admission of the same. As previously stated the test is not whether the application might have been successful, but whether the application should not have been made. On Mr Portelli’s own version of the facts, it was not clear that the proceedings would ultimately fail.
[67] What then of the fact that the applicant filed the Notice of Discontinuance so late in the proceedings and only 6 days before the hearing. Exhibit A2 is relevant to this issue. Mr Portelli’s doctor wrote that,

“Andrew has been attending this surgery since 17 November 2015 with anxiety and depression for which he has been receiving medication …. It would have been unwise for him to proceed with the case as it would have had a serious impact on his health and prevented him from getting another job.”

Consideration – s.400A
[68] The considerations relevant to whether the applicant was unreasonable in continuing with the matter are the same as those addressed above in answer to Baxter’s submission that,

“…the reference point for determining whether section 611(2)(b) of the FW Act is satisfied cannot be limited to the time at which the application is made but applies in the course of proceedings until the time at which the matter is determined by the Commission or discontinued.”

[69] My preliminary view expressed during the hearing was that from 5 October 2017 the applicant was on notice about the likely success of the respondent’s objection to the extension of time.
[70] However, for the reasons set out above, having now considered the matter more carefully, I am not satisfied that the applicant unreasonably continued with the UFD Application until he discontinued it on 31 January 2017. I accept that, at all times, the applicant had a difficult race to run if he was to hurdle the objections raised by the respondent, but, had he persevered, those hurdles were not insurmountable.
Conclusion
[71] In the decision of Meys v Sawtell Hotel, Vice President Catanzariti stated:

“[50] … It is not the role of this Commission to exercise its discretion to issue a costs order in lieu of the prima facie assumption that a party will bear its own costs – an assumption which the authorities require me to cautiously adhere to – when to do so would inflict additional financial and emotional hardship on an already vulnerable self-represented Applicant who has not acted vexatiously, unreasonably or in bad faith.”  34

[72] For the reasons set out above the Commission, as presently constituted, is not satisfied that Mr Portelli’s application was made vexatiously or without reasonable cause. Nor is the Commission, as presently constituted, satisfied that it should have been reasonably apparent to Mr Portelli that his application had no reasonable prospect of success. Therefore, the Commission has no jurisdiction pursuant to s.611 of the FW Act to order costs.
[73] I accept that Baxter incurred significant costs to prepare for, and to defend proceedings in this matter. However, for the reasons above I am not satisfied that there is any jurisdiction to depart from the presumption against awarding costs.
[74] In all the circumstances of this matter the Commission, as presently constituted, is not satisfied that it was unreasonable for Mr Portelli to instigate proceedings. Further, the Commission, as presently constituted, is not persuaded that s.400A of the FW Act is enlivened and therefore the Commission has no jurisdiction to order costs pursuant to s.400A of the FW Act.
[75] Having determined that the Commission does not have jurisdiction to order costs in this matter it is not necessary for me to say anything further about the exercise of the discretion. However, even if the jurisdiction to order costs pursuant of s.611 or 400A was enlivened, I would have declined to order costs in this case as a matter of discretion. This is because, it was obvious to me that as a self-represented applicant, Mr Portelli likely struggled to fully understand the technical aspects of the jurisdictional hurdles he had to overcome in order for his matter to proceed.
[76] There was no evidence to suggest that Mr Portelli did not genuine feel he might be successful in his UFD Application. Mr Portelli is unemployed and was merely attempting to pursue a cause of action because he genuinely felt there was an injustice attached to the cessation of his employment with Baxter. Further, in discontinuing the UFD Application without reaching an agreement with Baxter that it would not pursue costs against him because he was relying on the advice of his union, Mr Portelli was badly served by that advice (as is evident by the application presently before me). This was akin to representative error on behalf of his union.
[77] For the reasons given, Baxter’s application for costs pursuant to s.400A and s.611 of the FW Act is dismissed.
[78] An Order to that effect will be issued with this Decision.

COMMISSIONER

Appearances:

Mr A Portelli, for the applicant

Mr B Swebeck, for the respondent

Hearing details:

2017

Melbourne, Sydney

March, 31, April, 19

 1 s.661(1) FW Act.

 2 s.661(2) FW Act.

 3 s.400A(1) FW Act.

 4   Warrell v FWC [2013] FCA 291.

 5   Transcript PN14-15.

 6   Transcript PN19-20.

 7   On 22 December 2016 the matter was relisted for 6 February 2017 at the request of the respondent and with the consent of the applicant.

 8   McKenzie v Meran Rise Pty Ltd (AIRCFB, Giudice J, Watson SDP, Whelan C, 7 April 2000) Print S4692 [7].

 9   Bradshaw v BHP Coal Pty Ltd[2014] FWC 4871.

 10   Nilsen v Loyal Orange Trust (1997) 76 IR 180, 181; citing Attorney-General v Wentworth (1988) 14 NSWLR 481, 491; cited in Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16 [7].

 11   Ibid.

 12   Church v Eastern Health (2014) 240 IR 377 [29].

 13   General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, 129; cited in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370 [17].

 14   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257; cited in Dryden v Bethanie Group Inc [2013] FWC 224 (Williams C, 11 January 2013) [20].

 15   Ibid.

 16   R v Moore; Ex Parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470, 473; cited in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370 [20].

 17   Zornada v St John Ambulance Australia (Western Australia) Inc. (2013) 237 IR 48 [35].

 18   Baker v Salver Resources Pty Ltd [2012] FWAFB 4014 (Watson SDP, Drake SDP, Harrison C, 27 June 2011) [10]; citing Deane v Paper Australia Pty Ltd (AIRCFB, Giudice J, Williams SDP, Simmonds C, 6 June 2003) PR932454 [7].

 19 Explanatory Memorandum, Fair Work Amendment Bill 2012, 37 [171].

 20 Explanatory Memorandum, Fair Work Amendment Bill 2012, 37 [171].

 21   Stanley v QBE Management Services Pty Ltd [2012] FWA 7165.

 22 [2011] 203 IR 1

 23   Transcript PN118, 31 March 2017. See also PN70, 19 April 2017.

 24   Attachment D to Exhibit “A1”.

 25   Print P3168, 22 July 1997 per Ross VP, Watson SDP and Gay C.

 26   Ibid.

 27   Kyvelos v Champion Socks Pty Ltd, Print T2421 [14].

 28   Transcript PN93.

 29   Transcript PN90.

 30   Transcript PN80.

 31   Transcript PN89.

 32   Transcript PN95-96.

 33   J Le Good v Stork Electrical Pty Ltd Print R3294

 34   [2016] FWC 5561

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