Aniek Aardoom v Kevesther Pty Ltd
[2023] FWC 2333
•12 SEPTEMBER 2023
| [2023] FWC 2333 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Aniek Aardoom
v
Kevesther Pty Ltd
(U2023/2522)
| COMMISSIONER DURHAM | BRISBANE, 12 SEPTEMBER 2023 |
Application for costs orders against party involved in an application for an Unfair Dismissal Remedy – application dismissed Application for an unfair dismissal remedy
Kevesther Pty Ltd (the Company) has applied for an order for costs pursuant to section 400A and section 611 of the Fair Work Act 2009 (Cth) (the Act) against Ms Aniek Aardoom (Ms Aardoom). The application arises out of proceedings initiated by Ms Aardoom on 26 March 2023, alleging that she had been unfairly dismissed by the Company on 3 March 2023.
Background
After the application was filed on 26 March 2023, the Company subsequently engaged the services of a solicitor and, on 11 April 2023, filed a Form F3 Employer Response with the Fair Work Commission (the Commission). On 9 May 2023, a notice of representation was filed by the Company’s representative by way of a Form F53.
The response raised a number of objections to the application including that the application was out of time, that the Company were a small business and the applicable Small Business Fair Dismissal Code had been complied with, and that there was no dismissal, as Ms Aardoom had abandoned her employment (no dismissal).
It was apparent on the face of the application and the response that the application had been made outside the time period prescribed by section 394 of the Act. The matter was programmed to determine whether the Commission should exercise the discretion under section 394(3) of the Act to extend the time period for the filing of the application on the basis that there were exceptional circumstances within the meaning of that subsection.
Directions were made for the filing of material and the matter was listed for 12 June 2023 to determine the question of whether an extension of time should be granted.
The matter was heard by way of determinative conference and a decision was published on 21 June 2023.
The matter of leave to appear was dealt with at the commencement of the determinative conference - noting that Ms Aardoom raised no objection, when asked whether she opposed the Company being represented. After considering the submissions made on behalf of the Company, and the fact that Ms Aardoom had not raised any objection, leave was granted. It is also important to note, that after leave was granted, the Company's representative was reminded that Ms Aardoom was self-represented and asked to be mindful of this during the proceedings.
After considering the evidence and the particular circumstances of the matter, it was found that there were no exceptional circumstances and therefore no additional time could be allowed for Ms Aardoom to make her application. Subsequently the application was dismissed (extension of time decision).[1]
The Costs Application
On 5 July 2023, the Company filed an application seeking an order for costs against Ms Aardoom, pursuant to sections 611 and 400A of the Act. I note that the costs application was filed within 14 days after the determination of the relevant matter, as required by section 402.
To limit any additional costs being incurred, the parties consented to the Commission determining the application on the papers, save that the Company asked to be heard in relation to the quantum of any costs to be ordered. Subject to the costs order being granted, the Company would be afforded time to file an amended costs schedule if necessary.
Submissions of the Parties
With respect to section 611, the Company submits that the application was made vexatiously, and that it should have been reasonably apparent to Ms Aardoom that she had no reasonable prospects of success. In support of this, they argue that:[2]
1. The application was jurisdictionally destined to fail because it was out of time with no exceptional circumstances to explain the delay.
2. Ms Aardoom would have faced significant additional jurisdictional challenges establishing that she had not abandoned her employment, or that she was not dismissed pursuant to the Small Business Fair Dismissal Code.
3. Ms Aardoom’s prospects of success with respect to the merits of the case were slim.
In light of the above, The Company is of the view that they have incurred costs, pursuant to section 400A(1), because Ms Aardoom should not have commenced proceedings at all, and should not have continued the proceedings for several months thereafter until the matter was dismissed.[3] The Company further argues that Ms Aardoom had sufficient time and opportunity to discontinue the application but “turned a blind eye”.[4]
The application sought an order for costs referrable to the period commencing 30 March 2023 to 22 June 2023 inclusive.[5]
Ms Aardoom’s written submissions in response to the cost application argue that no costs should be granted on the following grounds:[6]
1. The Company took it upon themselves to seek legal representation.
2. The merits of her application more generally were not discussed because the proceeding only determined the out of time component.
3. That the application was made with reasonable cause and was not vexatious because she has substantial evidence regarding the merits of her case.
4. She remains firmly of the view that, had she been successful in gaining an extension of time, she would have been able to demonstrate that she had been unfairly dismissed.
5. That she had little knowledge and understanding of the proceedings.
Ms Aardoom also sought to introduce additional information that had not been considered during the determinative conference.
The Company filed a written reply taking issue with several of Ms Aardoom’s submissions, in particular the new material which they described as an attempt to reopen the original proceedings. The Company submitted that such additional material should be deemed inadmissible. In this regard, I concur with the submissions of the Company and as such, any new evidence or allegations raised in Ms Aardoom’s reply material have been disregarded.
Relevant Provisions
Section 400A of the Act provides:
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.
Section 611 of the Act provides:
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).
Consideration
The starting point for any consideration of costs in proceedings before the Commission is set out in section 611(1), which provides that a person must bear their own costs in relation to a matter before the Commission. However, section 400A provides the Commission with a discretionary power to award costs against a party to a matter arising under Part 3-2 of the Act if the Commission is satisfied that the party against whom costs orders are sought, caused the costs to be incurred by the other party because of an unreasonable act or omission of the first mentioned party in connection with the conduct or continuation of the matter.
Previous decisions of the Commission have made it clear that the power to award costs should be exercised with some caution and only in clear cases so as not to erode the broad principle embodied in section 611(1) and generally, parties are to bear their own costs.[7] Consequently, applicants with the benefit of a provision such as section 611 will rarely be ordered to pay costs. That approach has been adopted in relation to costs applications under section 400A.[8]
A Full Bench decision of the Commission observed that section 400A(1) establishes two preconditions for the making of an order for costs under the subsection.[9] The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.
In determining whether to order costs, I have taken the above principals and preconditions, as they relate to both Sections 611 and 400(A)(1) into consideration.
Section 611 – was the application made vexatiously or without reasonable cause; or should it have been reasonably apparent there was no reasonable prospect of success
The Company argues that Ms Aardoom’s application was made without reasonable cause and that this should have been apparent to her. In pressing this view, they suggest that Ms Aardoom should have known that her case would face significant jurisdictional challenges with respect to:
1. Establishing that she had not abandoned her employment.
2. That she was not dismissed pursuant to the Small Business Fair Dismissal Code.
3. Successfully arguing “exceptional circumstances” to explain the delay in lodging her application.
In support of this view, the Company seeks to rely on comments made by me, in the extension of time decision regarding the “challenges” Ms Aardoom may face in this regard if this matter was to proceed.[10]
Whilst these observations were made in the context of the matter before me at that time, it simply does not follow that the Commission expressing an opinion of this kind means that the application was made vexatiously or without reasonable cause. It is also of note that whilst acknowledging these “challenges”, the merits of the case were noted as a neutral consideration in my final decision.[11] In any case, these comments were not made until after the available evidence had been heard, and as such, Ms Aardoom could not have been aware that I would have reached these conclusions at the time of lodging her application, nor during the determinative conference.
Whilst Ms Aardoom’s case may have had challenges, it could not be said that it was hopeless. There were facts in dispute between the parties that would necessarily have turned on the evidence if the matter had proceeded. In particular, Ms Aardoom would have had the opportunity to present her evidence with respect to whether or not she had abandoned her employment (no dismissal) or whether or not the Small Business Fair Dismissal Code had been fully complied with.
It is also important to note the full bench authority which established that a conclusion that an application has no reasonable prospects of success should only be reached with great caution and in circumstances where the application is “manifestly untenable or groundless or so lacking in merit or substance as to be reasonably arguable”.[12] This sets a high bar for an applicant for costs orders under section 611. Having considered the evidence, and the circumstances of this case, I am not prepared to accept that Ms Aardoom’s case would have had no reasonable prospect of success.
With respect to the suggestion that Ms Aardoom had no reasonable prospects of successfully arguing “exceptional circumstances” to explain the delay in lodging her application, it is important to note that I considered multiple issues before ultimately concluding that exceptional circumstances did not exist. Again, it simply does not follow that because I did not find exceptional circumstances existed such as to warrant an extension of time, that Ms Aardoom should have known this before lodging her application.
Ms Aardoom, is a young woman with limited resources, who has evidenced that she was suffering mental health issues during the period leading up to, and throughout each of the proceedings relating to her unfair dismissal application.[13] Whilst I determined that these issues would not have incapacitated her to the extent that she was incapable of lodging her application on time, this should not be taken as cause to totally disregard them.[14]
It is clear that Ms Aardoom felt genuinely aggrieved by the Company’s decision to dismiss her. In these circumstances, and again noting that she was not represented at any stage of these proceedings, it is understandable that she sought to progress her matter, even in the face of the Company’s jurisdictional objections. It also stands to reason that she was content with the Commission determining the jurisdictional objections, rather than simply accepting the submissions of the Company in this regard from the outset.
Taking into account the broad principles embodied in section 611(1) and for the reasons outlined above, I reject the Company’s contention that Ms Aardoom brought her application vexatiously or without reasonable cause.
Section 400A - Unreasonable Act or Omission in Relation to the Conduct or Continuation of a Matter
The Company reiterates its arguments regarding section 611, as its basis for costs with respect to section 400A, submitting that Ms Aardoom should not have commenced proceedings at all, nor continued them.[15] As explored above, I do not agree with the notion that Ms Aardoom should not have commenced proceedings at all. Furthermore, I do not find Ms Aardoom’s persistence to continue the proceedings to be an unreasonable act or omission.
Additionally, the Company refers to Ms Aardoom’s late filing of material that was due on 24 May 2023.[16] It should be noted that Ms Aardoom advised my Chambers on 25 May 2023 that she had no further material to provide, then subsequently requested an extension of time on that same day to file further material. After considering procedural fairness, and taking into account that Ms Aardoom was self-represented, I granted her until the 26 May 2023 to lodge her additional material. Ms Aardoom complied with this direction.
The Company further submits that Ms Aardoom’s omission to provide material as per my original directions, resulted in the Company incurring cost that could have been entirely avoided.[17] I do not find Ms Aardoom’s seeking of an extension for the filing of material regarding my directions, in and of itself, an unreasonable act or omission. Again, for the reasons outlined above, I consider her conduct understandable given the circumstances. I therefore do not accept that it was an unreasonable act or omission.
Section 400A - Act or Omission Caused the Other Party to the Matter to Incur Costs
As I have not found there to be an unreasonable act or omission in relation to Ms Aardoom’s conduct or her continuation of the matter, I am unable to make a finding that costs were incurred on this basis.
Conclusion
For the reasons outlined above, I reject the Company’s contention that Ms Aardoom brought her application vexatiously or without reasonable cause. I consider that Ms Aardoom was genuinely aggrieved at the Company’s decision to dismiss her and that she felt entitled to pursue her right to have the Commission determine whether she had been unfairly dismissed, and the jurisdictional objections that followed.
Having regard to the conclusions above, the preconditions for the making of an order for costs pursuant to section 400A and 611 have not been satisfied. Further, had they been satisfied, I would not have been inclined to exercise my discretion to do so given the particular circumstances of this matter as set out above. The costs application is dismissed.
COMMISSIONER
[1] Aardoom v Kevesther Pty Ltd [2023] FWC 1496 at [34].
[2] Form F6 Costs Application, page 14.
[3] Ibid, page 16.
[4] Ibid, page 17.
[5] Annexure B of Form F6 Costs Application.
[6] Ms Aniek Aardoom’s response to Form F6 Costs Application, page 1.
[7] E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[2014] FWCFB 810.
[8] HCL Australia Services Pty Limited T/A HCL v Gautam Amba and Brett Wilson[2019] FWC 1891 at [34].
[9] Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478.
[10] Form F6 Costs Application, page 4, 14, 15, and 16.
[11] Aardoom v Kevesther Pty Ltd [2023] FWC 1496 at [30].
[12] Ryman, Jeremy v Thrash Pty Ltd T/A Wisharts Automotive Services[2016] FWCFB 1638 at [4].
[13] Aardoom v Kevesther Pty Ltd [2023] FWC 1496 at [12].
[14] Ibid at [20].
[15] Form F6 Costs Application, page 16-17.
[16] Ibid, page 17.
[17] Ibid.
Printed by authority of the Commonwealth Government Printer
<PR766134>
0