Benedict Hardless v BAE Systems Australia Limited T/A BAE Systems Australia Limited

[2020] FWC 93

[2020] FWC 93

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.789FC - Application for an order to stop bullying

Benedict Hardless
v
BAE Systems Australia Limited T/A BAE Systems Australia Limited; Robert McNeil; Shannon Soley; Lee Stewart; Ian Pertzel; Martin Roberts
(AB2018/522)

COMMISSIONER PLATT ADELAIDE, 10 JANUARY 2020

Application for costs pursuant to s.611 of the Fair Work Act 2009

[1] This decision concerns an application by BAE Systems Australia Limited T/A BAE Systems Australia Limited (BAE or BAE Systems) made on 24 April 2019 seeking an order for costs against Mr Benedict Hardless pursuant to s.611 of the Fair Work Act 2009 (the Act). The application is made in the context of an application made pursuant to s.789FC of the Act on 25 August 2018 by Mr Benedict Hardless in relation to an allegation that he was being bullied by BAE Systems and a number of persons named. The application was listed for Hearing from 8-12 April 2019. On 5 April 2019, Mr Hardless discontinued the s.789FC application.

[2] Written submissions with respect to costs were provided by each party 1 and a reply submission by BAE. A Hearing for the purposes of oral argument was conducted on 2 July 2019.

The Substantive Case

[3] On 3 September 2018, Mr Benedict Hardless lodged a s.789FC application seeking orders to stop bullying.

[4] On 3 September 2018, Ms Stephanie Dewhurst, HR Manager BAE Systems Australia, filed a response on behalf of BAE Systems and the persons named.

[5] On 4 September 2018, Mr Benedict Hardless (the Applicant) made a Form F52 application to the Commission dated 29 August 2018 for orders requiring the production of two documents:

•  The investigation report prepared by the Consultant (the Investigation Report); and

•  The Culture Plan for the Wagga Wagga site (the Culture Plan).

[6] The substantive application was first listed by the Fair Work Commission (the Commission) for Conference on 26 September 2018. At that time Mr Hardless was not represented and was not attending the workplace. Mr Hardless also advised he had lodged a worker’s compensation claim which had been accepted by Employers Mutual NSW Limited (EML) on 22 August 2018. The conference was adjourned until 29 October 2018 so as to ensure that the Applicant was safely able to participate.

[7] On 29 October 2018, Mr Hardless sought that the matter be adjourned for a further period of 12 months. The request for an adjournment was opposed and on this basis the matter was listed for a procedural hearing on 2 November 2018 to deal with the adjournment.

[8] On 2 November 2018, I declined the adjournment application noting the potential impact on the persons named and my performance obligations under s.577 of the Act and issued Directions for the hearing of the matter from 26-28 November 2018.

[9] On 5 November 2018, Mr Hardless sought that his Form F52 application be dealt with. On 6 November 2018, Ms Dewhurst advised that BAE Systems and the persons named opposed the application for production of documents on the basis of legal professional privilege.

[10] A Directions Hearing was conducted on 7 November 2018. Ms Erin Hawthorne sought to represent BAE Systems and the persons named, Mr Hardless opposed the application. Permission for representation, as it related to the production of documents application, was granted pursuant to s.596 of the Act on the basis of complexity and efficiency.

[11] Mr Hardless provided written submissions as to the production of the documents sought on 7 November 2018.

[12] On 8 November 2018, I issued Directions requiring BAE Systems to provide confidential copies of the documents sought to be produced to the Commission, and file submissions detailing the basis of their objection by 14 November 2018. The Form F52 application was listed for Hearing on 14 November 2018.

[13] On 12 November 2018, Mr Hardless, the Respondent and persons named made written submissions seeking permission to be represented pursuant to s.596 of the Act.

[14] On the same day the Applicant’s brother, Mr Philip Hardless who is a lawyer, lodged a Form F53 Notice of Representative Commencing to Act on behalf of the Applicant, Mr Benedict Hardless. All references in this Decision to Mr Hardless are references to the Applicant.

[15] On 14 November 2018, BAE Systems provided a written submission as to the basis on which it opposed production of the documents, and Mr Hardless (through his representative) submitted a further written submission as to why production should be ordered.

[16] On 15 November 2018, Mr Hardless submitted copies of two audio files in support of his claim that if privilege existed, it had been waived.

[17] On 16 November 2018, I conducted a Conference. Mr Hardless was represented by his representative, and BAE Systems and the persons named continued to be represented by Ms Hawthorne. Permission under s.596 of the Act was granted to all parties to be represented on the basis of complexity and efficiency.

[18] The parties agreed to participate in a conciliation conducted by myself. On that basis the determination of the contested application for production was adjourned and Hearing dates for the substantive matter vacated.

[19] Conciliation concluded on 22 November 2018 without resolving the matter. Revised Directions were issued on the same day. Further Directions were issued on 5 December 2018. The contested document production application was listed for Hearing on 19 February 2019.

[20] On 24 November 2018, Mr Hardless lodged a Form F51 application seeking the issuing of an order to a number of persons requiring them to attend the Commission to give evidence.

[21] On 29 November 2018, Mr Hardless filed a number of witness statements in support of his s.789FC application.

[22] On 17 December 2018, BAE Systems filed an application to dismiss the s.789FC application as (inter alia) it had no reasonable prospects of success. Directions as to the filing of material and the Hearing of this “dismissal application” were made on 21 December 2018.

[23] On 20 December 2018, Mr Hardless made a second Form F52 order for production of documents and a Form F51 order requiring a number of persons to attend to give evidence.

[24] On 7 January 2019, the parties were advised that I would not make the orders sought in the second Form F52 application and I provided reasons for this decision.

[25] On 8 January 2019, BAE Systems sought that the dismissal application be adjourned to allow it to consider the information provided by Mr Hardless. The adjournment request was refused.

[26] On 9 January 2019, the dismissal application was withdrawn.

[27] On 10 January 2019, Mr Hardless made an application for interim orders that he not be required to attend certain meetings by BAE Systems until the conclusion of the substantive application. This application was dealt with in a Conference on 11 January 2019, the orders sought were not granted.

[28] On 11 January 2019, the parties agreed to engage in further conciliation. On 19 February 2019, I accepted that the further conciliation had not resolved the matter. Further Directions were issued and the first application for production of documents was listed for Hearing on 1 March 2019 with any further submissions to be filed by 27 February 2019.

[29] On 21 February 2019, BAE Systems sought that I strike out objectionable material from the statements filed on behalf of Mr Hardless.

[30] On 25 February 2019, Mr Hardless advised that the Form F51 application filed on 20 December 2018 would not be pursued.

[31] On 1 March 2019, I heard the parties as to the Form F51 application made on 24 November 2018 as amended by Mr Hardless’ representative on the day. Each application was refused for reasons given in transcript. I then dealt with the remaining Form F52 application for production of documents. BAE indicated that the Culture Plan would be provided to the Applicant on a confidential basis for use in the current proceedings. The only document in dispute was the Investigation Report over which legal professional privilege was claimed.

[32] I had previously received written submissions from the parties and provided an opportunity for any additional oral submissions in respect of the Form F52 order for production of the Investigation Report over which BAE Systems asserted legal professional privilege. Additional oral submissions, as to how the confidential material would be dealt with were received on 15 March 2019.

[33] After considering the matters discussed on 15 March 2019, I provided extracts of the confidential material to Mr Hardless on 19 March 2019 in order to allow him to respond. Mr Hardless responded by email dated 21 March 2019 and contended that I should not receive or rely on the confidential material provided including the witness statement of Ms Hawthorne.

[34] On 25 March 2019, Mr Hardless provided statements from himself, Ms De Jong and Mr Tregea.

[35] On 28 March 2019, I conducted a case management conference. During that Conference I advised the parties I had determined to uphold BAE’s claim of privilege and would soon publish my decision.

[36] On 1 April 2019, I published my Decision 2 with respect to the application for privilege over the Investigation Report. The Decision concluded that the Investigation Report was privileged, that the privilege had not been waived and I declined to order its production.

[37] On 2 April 2019, Mr Hardless advised that they were considering an appeal of my decision issued on 1 April 2019 and that an appeal if made would be likely to include an application to stay the proceedings and vacate the hearing dates.

[38] My Associate advised the parties that the scheduled hearing would continue unless a stay was granted.

[39] On 3 April 2019, numerous emails were exchanged concerning case management and in particular the medical evidence and the need for the medical witnesses to attend. On 3 April 2019, it was agreed that Dr Barkla and Dr Van Gend would not be required to give evidence. As a result, the Hearing scheduled for 12 April 2019 (to receive medical evidence) was cancelled.

[40] On 3 April 2019, Mr Hardless filed a Form F1 application seeking that the hearing dates on 8-12 April 2019 be vacated and that the proceedings in AB2018/522 be stayed until further order. Mr Hardless contended that the proposed hearing be vacated in order to allow an appeal of the 1 April 2019 Decision to be considered. Mr Hardless identified that the Form F52 application (in respect of the Investigation Report) had been sought on 29 August 2018, followed up on 4 September 2018, 19 September 2018, and 5 November 2018. That Form F52 application had been part heard on 28 March 2019 and delivered on 1 April 2019 a week before the listed hearing date and that Mr Hardless had instructed that an appeal in respect of that decision was lodged.

[41] The application for the adjournment was heard on 4 April 2019. Written submissions were provided and oral arguments presented. A Decision rejecting the application was published on the same day. 3

[42] Between 11.30am and 11.47am on 5 April 2019, BAE filed additional statements by Mr McNeil and Ms Soley and advised that further statements would be provided.

[43] Throughout the entire process, the s.789FC application was pursued and defended by the parties with considerable vigour. The Commission sought to assist the parties to resolve the matter by consensus on multiple occasions. At no time was the evidence of the witnesses tested nor was I in a position to make any assessment of the merits of the application.

[44] At 1.07pm on 5 April 2019, Mr Hardless lodged a Notice of Discontinuance in respect of the substantive matter.

[45] On 23 April 2019, BAE lodged an application seeking costs. Directions were issued for the filing of submissions and the hearing of the costs application.

[46] On 30 April 2019, Mr Philip Hardless filed a Form F54 advising that he ceased to act for Mr Hardless.

[47] On 9 October 2019, I advised the parties that I had determined not to award costs, my reasons for this decision follow.

Submissions in relation to the costs application

[48] BAE filed submissions in support of an application for costs and a statement of Mr Henry Skene. Mr Hardless filed submissions in response to the application for costs and a confidential statement of Mr Philip Hardless.

[49] BAE contends that in the course of the proceedings, there were a significant number of interlocutory applications filed by Mr Hardless, and two interlocutory applications filed by BAE. The application for costs is brought in respect of the five applications filed by Mr Hardless and one application filed by BAE, on the basis of Mr Hardless’ response to that application (collectively the Applications). For clarity, BAE’s submissions and Mr Hardless’ response in relation to each application has been set out, in detail, later in this Decision. Prior to dealing with the submissions of each party in relation to each individual application, I have first set out the general propositions of each party and the applicable legal principles that they each submit apply to the costs application.

[50] BAE submitted, in relation to the applicable legal principles, that:

•  A party who has benefit of a general rule that parties bear their own costs will only rarely be ordered to pay costs and that the power to order payment of costs should be exercised with caution. 4

•  Cost orders have been made in Anti-bullying proceedings, including in respect of interlocutory applications, and there are no special tests to be applied.

•  In relation to s.611(2)(a) of the Act, the term ‘vexatiously’ has been judicially considered 5 and should be applied as follows:

•  The main purpose of the application (or response) was to harass, annoy, or embarrass the other party to the proceeding; or

•  To gain a collateral advantage; there is another purpose for the action other than the settlement of the issues arising in the application (or response);

•  The application is seriously or unfairly burdensome and productive of serious and unjustified trouble and harassment.

•  In relation to s.611(2)(a) of the Act, the following principles apply:

•  The inquiry is whether, at the time of making the application or response, there was no substantial prospect of success;

•  The inquiry is made at the time of making the relevant application or response; the fact a party later discontinues the proceeding is not a matter to be taken directly into account.

•  The test is similar to that for summary judgement: whether the claim is “so obviously untenable that it cannot possibly succeed” or “manifestly groundless”; 6

•  There may be cases which could not properly be described as “misconceived” which would nevertheless be held to have been instituted “without reasonable cause”.

•  In essence, the inquiry is not whether the application/response might have been successful, but whether it should not have been made.

•  In relation to s.611(2)(b) of the Act, whether it should be reasonably apparent that an application or response has ‘no reasonable prospects of success’ is an objective, as opposed to subjective, test.

[51] Mr Hardless’ submissions in response to the application for costs are relevantly summarised as follows:

•  At all times Mr Hardless has conducted himself in a fair and reasonable manner, has made all applications in good faith, with reasonable justification and grounds, has complied with all Commission directions, has taken reasonable steps to prosecute the application which has been at a significant financial and personal cost, and has lodged newly received material in a timely manner.

•  Mr Hardless is committed to returning to work in his pre-injury role and all of his actions have been aimed at returning to work with appropriate safeguards in place.

•  BAE’s evidentiary objections to Mr Hardless’ material did not constitute an application for the purposes of s.611 of the Act.

•  Mr Hardless resisted BAE being legal represented in order to avoid delays and legal technicalities.

•  The majority of matters BAE have taken issue with are as a result of its own conduct (its application for summary dismissal which was subsequently withdrawn, unreasonable directions to Mr Hardless which were withdrawn and their extensive evidentiary objections).

•  It does not follow that the application was made without reasonable cause or reasonable prospects of success simply because it was not granted.

•  Where applications or evidentiary objections were not heard, there is insufficient basis to determine that the application was brought without reasonable cause.

•  Mr Hardless and his solicitor travelled to Wagga Wagga a full week prior to the hearing of the substantive matter, at significant expense, and had accommodation and return flights booked for a date after the hearing which demonstrates Mr Hardless’ intention to see out the full hearing.

•  The decision to discontinue the substantive application was on the basis that; there was a significant volume of material filed by BAE one business day prior to the hearing, there was an inability to progress an appeal of the decision in relation to the production of documents application prior to the hearing of the substantive application, evidentiary rules were being substantially applied to the material filed by Mr Hardless, BAE had two additional witnesses attending and Mr Hardless was only notified of this two days prior to the substantive hearing and on advice of independent Counsel.

[52] Mr Hardless further submitted, in relation to the applicable legal principles, that:

•  The power to award costs is discretionary and the Commission must first decide whether there is power to award costs, and if there is power, whether the discretion to award costs is appropriate.

•  The threshold for finding that an application or a response to an application was vexatious or had no reasonable prospects of success is very high - Dryden v The Bethanie Group Inc 7 and Summers v Regional Enterprise Development Institute Ltd T/A REDI and ors8were nominated as examples of this approach.

•  Extreme caution should be exercised and a finding that an application, or response, has no reasonable prospects of success should only be reached when such application or response is ‘manifestly untenable or groundless’. 9

•  The principle of proportionality in incurring legal and other costs found in the Civil Procedure Act 2010 (Vic) is of persuasive value and relevant to Commission proceedings which should be informal and non-technical.

The Power to Award Costs

[53] The power to award costs is discretionary and subject to specified statutory prerequisites. The presumption under the Act is that each party bears their own costs.

[54] Section 611 of the Act is 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).”

Section 611(2)(a) Application brought vexatiously or without reasonable cause

[55] The meanings of the terms ‘vexatiously’ and ‘without reasonable cause’ were discussed in Church v Eastern Health. 10 The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain a collateral advantage.11

“[25] The meaning of the term ‘vexatious’ was considered by Asbury C in Mokomoko v Zennforce Protection Group Pty Ltd:

“[13] The circumstances in which an application will be found to have been made vexatiously were discussed by Justice North in Nilsen v Loyal Orange Trust as follows:

“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceedings. It is an alternative ground to the ground based on lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceedings. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.”

[14] In Attorney-General v Wentworth Roden J observed that litigation may be regarded as vexatious on objective or subjective grounds and that the test could be expressed as follows:

“1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought;

2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the Court adjudicate on the issues to which they give rise.

3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless...” (citations omitted)

Section 611(2)(b) Application had no prospects of success

[56] The meaning of the terms ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ were considered by a Full Bench in Baker v Salva Resources Pty Ltd 12 who said:

“[10] The concepts within s.611(2)(b) have been well traversed:

•  “should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and

•  a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”

[57] I now turn to each application for costs.

First Application: Hardless’ Application for a summons – 29 November 2018

[58] This application sought orders that eight persons named would be required to attend a hearing. It was filed and served at the same time as Mr Hardless filed his evidence in respect of the substantive proceeding.

[59] BAE contends that:

•  At the time, there was no clarity around what factual evidence would be in dispute in the proceeding and therefore no basis upon which any view could be formed about whether the requested orders (effectively a summons) would be necessary or expedient having regard to what were likely to be determinative considerations on the hearing of the merits, assist in resolution of the substantive application or otherwise add to the evidence about the relevant issues in the case.

•  Insufficient information was set out in the application as to why an order was sought. There was no summary of the evidence that the witnesses were expected to give or what steps had been taken to see if they would do so voluntarily. In many cases, the basis for the order appeared to be no more than the Applicant simply asserting the persons had participated in a prior investigation conducted on behalf of BAE under legal privilege. The application also included Mr Tregea and Ms De Jong, who had given evidence for the Applicant voluntarily.

•  At the hearing, Mr Hardless’ representative confirmed that little or no attempt had been made prior to filing the application (or in the time since) to ascertain whether the named people would agree to give evidence without an order. The fact statements were later filed by Mr Hardless for each of Mr Hope, Ms Paproth and Dr Van Gend tends to support that had this effort been made prior to the application being filed, it would not have been necessary to do so in respect of at least those witnesses.

[60] Mr Hardless contended that:

•  The majority of individuals in his application were mentioned in witness statements and/or directly observed events in the workplace. BAE Systems made assertions in their Form F73 response and verbally at hearings that certain changes had been made in the workplace, certain contractual conditions existed and that all alleged instances of bullying either did not occur or were reasonable management action. These assertions gave rise to factual disputes, and Mr Hardless held a reasonable belief that the identified witnesses could assist in resolution of those factual disputes.

•  Justification for seeking attendance orders was given in the application form, although the precise nature of the evidence that would be given by an individual could not be given at the time the application was made. There was a reasonable belief that those individuals, present in the workplace, would have knowledge relevant to the factual disputes in the substantive matter. This is supported by the fact that those individuals had been interviewed by the employer’s appointed investigator when internally handling the complaints of bullying.

•  As to making insufficient effort to secure witness attendance voluntarily prior to seeking orders, Mr Hardless was estranged from the workplace and did not have contact information for the witnesses available at the time the application was made. He believed he could not obtain more detailed information about the evidence that would be provided by the individuals concerned, because BAE Systems had directed those persons not to further discuss the matters traversed with BAE Systems’ internal investigator.

•  Mr Hardless correctly recalled notes that I exercised my discretion to decline to issue summonses unless all informal options had been exhausted to secure the statements and attendance of witnesses. Mr Hardless respects the discretion exercised in this matter but contends this does not mean that he should have pre-empted that discretion particularly when the informal pursuit of witness attendance is not reflected in the Fair Work Commission Rules 2013 or Practice Note 1/2016. Mr Hardless infers that his (then) representative (his legally qualified brother) had advised him that procedural norm in other jurisdictions supported the making of this application.

[61] The application was heard by the Commission at an interlocutory Hearing on 1 March 2019.

[62] After discussing the basis upon which each order requiring a person to attend was sought the various applications were withdrawn or refused.

Decision

[63] Mr Benedict Hardless has no experience in the industrial relations field. It is apparent that despite his legal qualifications, Mr Philip Hardless has little experience in the industrial relations jurisdiction. Whilst lawyers are usually obligated not to take in matters outside their areas of competence, I accept that Mr Philip Hardless was placed in a difficult position as a result of the request for assistance by his brother, Mr Benedict Hardless.

[64] Whilst there are numerous Commission decisions which deal with orders to produce documents, decisions on the criteria to be considered with respect to the issuance of an order requiring a person to attend and give evidence before the Commission appear to be rare.

[65] In my view before issuing a order requiring a person to attend and give evidence before the Commission, the Commission Member should be satisfied that the person sought to be summonsed has knowledge or evidence relevant to the matters in issue and would not or could not attend without the issuance of the order. In my view the party seeking to call the witness should seek the voluntary attendance of the witness unless it is obvious that such attendance would not occur (e.g. the witness was incarcerated).

[66] Whilst Mr Hardless was unable to provide sufficient evidence to satisfy me to issue the orders, I am not persuaded that the application for orders requiring persons to attend to give evidence were vexatious, without cause or had no prospect of success. It appears to me that the main driver of the application was the inexperience of Mr Hardless and his representative in this jurisdiction. The fact that the application was not successful does not automatically enliven costs. In addition, the time imposition on BAE appeared to be relatively minor.

[67] In the circumstances, I am not persuaded to exercise my discretion to award costs.

Second Application: BAE’s Application to strike out parts of Hardless’ evidence - 20

December 2018 (in respect of Hardless’ response to that application)

[68] On 20 December 2018, BAE sought that portions of the evidence filed by Mr Hardless on 29 November 2018 be struck out as they were objectionable or inadmissible (or both).

[69] BAE Submits that:

•  At the case management conference on 15 March 2019, some time was spent going through BAE’s objections to evidence. At that conference, Mr Hardless’ representative conceded that some of the material was inadmissible and indicated that parts would be withdrawn. The representative made a comment to the effect that he had not previously reviewed some parts of the evidence that had been filed by Mr Hardless to which the objections related (in November 2018). The Commission issued Directions requiring that Mr Hardless review the statements and provide revisions. A later hearing was scheduled. Revised statements were filed by Mr Hardless on 27 March 2019. The changes addressed some, but only some, of the objections which were the subject of BAE’s application. There were a number of objections which remained to be determined at the hearing. The Commission listed BAE’s application for further hearing on 28 March 2019. The hearing on 28 March 2019 was lengthy, much of the material that had been the subject of BAE’s application was withdrawn by Mr Hardless or struck out by the Commission, subject to leave being given to Mr Hardless to file further revised evidence, which he later did on 1 April 2019.

•  BAE had to prepare additional evidence in response to the revised and additional evidence filed by Mr Hardless. It filed two new witness statements and was in the process of finalising the third at the time the proceedings were discontinued on 5 April 2019.

•  BAE contends that Mr Hardless’ response to the BAE application was to do nothing to amend or revise his evidence until late March 2019 (over 3 months since BAE’s application was made), then the review was incomplete, necessitating review of numerous drafts of the statements, and lengthy attendances in conference in the Commission.

[70] It was submitted that Mr Hardless’ failure to appropriately review and revise the evidence in a timely manner, and to press for admission of evidence that was clearly inadmissible was without reasonable cause and/or that it should have been reasonably apparent that this had no reasonable prospect of success within the meaning of s.611 of the Act.

[71] In response Mr Hardless submits:

•  The Fair Work Commission Rules 2013 provides that an application must be made in the approved form, and if no specific form exists, then a Form F1 application. No formal application was made by BAE in relation evidentiary objections of BAE Systems. What BAE seek to rely on as an application is simply a passing reference in an email to a potential application (which was never made) and subsequent objections via email. Mr Hardless’ responses to the evidentiary objections of BAE are therefore not a “response to an application” within the meaning of s.611 of the Act, and the power for the Commission to award costs is not enlivened.

•  In the alternative, if the Commissioner forms the view that the evidentiary objections of BAE Systems were an ‘application’ for the purposes of the making of a cost order, then the rules of evidence do not apply to proceedings in the anti-bullying jurisdiction of the Commission. It is therefore unreasonable to expect that, absent a direction from the Commission, witness statements be amended in response to a vast array of technical evidentiary objections from another party that are based on a strict application of the rules of evidence. To do so would be inconsistent with the requirement that the Commission perform its functions in a manner that is quick, informal and avoids unnecessary technicalities.

•  The significant time spent dealing with a statement ‘line by line’ was only necessary due to the ‘line by line’ objections submitted by BAE. BAE Systems insisted that evidentiary objections be addressed ‘line by line’ and therefore it is unreasonable to seek costs on the basis that the objections were dealt with in such a way.

•  During the hearing some changes were made by consent following comments from the Commissioner regarding his views on certain issues, some changes were partially implemented, and on many of the objections BAE did not prevail.

•  BAE has asserted that their evidentiary objections attracted no reasonable response. Not only does this ignore the detailed response provided to the objections, it overlooks the guidance provided by the Commissioner in relation to when the objections would be dealt with (and in light of this the appropriate time to respond to those objections). The discretion of the Commission appeared clear in an email from the Commissioner’s Associate to the parties on 21 February 2019, which stated inter alia that “With respect to any objections to evidence filed on behalf of either party, please be advised that the Commissioner will only deal with same during the course of the substantive hearing in April”.

•  On 1 March 2019, the Commissioner advised the parties as follows: “I would encourage both parties to review their documentation and highlight information which is hearsay and I presume I don't need to tell you what that is, and also highlight opinion evidence”.

•  Following this suggestion from the Commissioner, three revised statements (including Mr Hardless’) addressing the majority of the objections by consent were provided to BAE on 25 March 2019 for their consideration.

Decision

[72] There is no dispute that BAE raised objections to the material filed by Mr Hardless. The Act provides parties with a variety of means to filing applications including in writing, by telephone and verbally. The fact that the procedural application was not made in writing on a Form F1 does not prevent the application for costs, in respect of that conduct, being made.

[73] As to the suggestion that the ‘rules of evidence’ do not apply to the Anti-bullying jurisdiction, the provision of s.591 of the Act, which provides that the Commission is not bound by the rules of evidence and procedure in relation to a matter before it, applies equally to all matters. It should be noted, however, that the Commission tends to follow the rules of evidence in order to ensure procedural fairness. 13

[74] Mr Hardless’ material contained a range of non-permissible material. Where parties are both represented it is reasonably expected that the material submitted would be of a higher standard than normal with irrelevant and non-permissible material excluded. Despite the matter being drawn to the attention of the parties, the deficiencies remained and could not be resolved by the representatives. As a result, a Conference was held.

[75] My assessment was that Mr Philip Hardless did not initially appear to appreciate the lack of relevance of some material and/or the operation of rules concerning opinion and hearsay evidence in this jurisdiction. This was resolved during the Conference.

[76] I accept that the failure of the representatives to appropriately deal with the issue resulted in the imposition of additional Commission conferences and wasted time. Despite this, I do not believe that Mr Hardless’ application was vexatious, without cause or had no prospect of success.

[77] In my view, the actions of Mr Philip Hardless were not so dilatory as to warrant the exercise of my discretion to award costs.

[78] The circumstances in respect of this application do not form an appropriate basis for the exercise of my discretion to award costs.

Third Application: Hardless’ Application for orders requiring persons to attend the Commission to give evidence – 20 December 2018

[79] On 17 December 2018, BAE made an application that Mr Hardless’ s.789FC application be dismissed.

[80] On 20 December 2018, Mr Hardless filed an application seeking orders that eight persons named appear at the hearing of BAE’s application for summary dismissal, and for the production of 14 documents and categories of documents.

[81] The application for production of documents duplicated earlier applications, which were the subject of ongoing submissions and hearings in respect of the Investigation Report and the Culture Plan and in many cases appeared to be directed at the substantive issues in the proceeding, which were not yet crystallised. These were essentially the reasons that it was declined on 7 January 2019.

[82] BAE submitted that the application was made without reasonable cause and/or in circumstances where it should have been reasonably apparent it had no reasonable prospect of success.

Decision

[83] Whilst I accept that the application for orders requiring persons to attend to give evidence and production of documents were duplicitous, for the same reasons as detailed in the first application, I am not persuaded that the applications for orders requiring persons to attend to give evidence is an appropriate basis for the exercise of my discretion to award costs.

[84] In respect of the application for production of documents, I am not satisfied that the application was vexatious, without cause or had no prospect of success. It appears to me that the main driver of the duplicitous application was the defence of BAE’s application to strikeout the claim. The fact that the application was not successful does not automatically enliven costs. In addition, the time imposition on BAE appeared to be relatively minor.

[85] In the circumstances I am not persuaded that the application for production of documents is an appropriate basis for the exercise of my discretion to award costs.

Fourth Application: Hardless’ Application for interim orders regarding medical examinations and meetings – 10 January 2019

[86] On 7 January 2019, Mr Hardless filed new medical evidence, following which BAE directed him to attend an independent medical examination and a meeting at the workplace, which he refused to do. BAE discontinued the summary dismissal application in light of the new medical evidence on 9 January 2019.

[87] On 10 January 2019, Mr Hardless filed an application seeking orders that would prohibit BAE from requiring him to attend a medical appointment or any meetings other than on certain conditions. The grounds for that application as articulated in the form and at the subsequent hearing were that:

•  The direction represented continuation of bullying.

•  The conduct was harassing and intimidating and/or unreasonable, including because it was alleged that the workers compensation legislation prohibited BAE giving the directions or the Applicant responding to them and various other alleged requirements under workers compensation legislation had not been met.

[88] Mr Hardless also sought an order that BAE not terminate his employment or commence any disciplinary action.

[89] BAE submits there was no proper basis put forward for seeking this order. BAE withdrew its directions to Mr Hardless. Notwithstanding this the application was pressed.

[90] In advance of the Hearing on 11 January 2019, Mr Hardless filed a witness statement with annexures and the Commission asked the parties to come prepared to address a particular case relevant to the application. The Hearing proceeded. Much of the time was taken up with oral argument in respect of the Applicant’s assertion that the workers compensation legislation prohibited him attending a meeting and attending a medical appointment.

[91] BAE submitted that the application was made without reasonable cause and had no reasonable prospects of success. The basis upon which the application had been brought was misconceived and/or manifestly groundless for the following reasons:

•  The allegation that the direction represented continuation of bullying was misconceived: given the Applicant was not at work at the time the direction was given, it was not conduct which occurred “at work” within the meaning of the Act.

•  The allegation conduct was harassing and intimidating and/or unreasonable, including because it was alleged that the workers compensation legislation prohibited BAE giving the directions or the Applicant responding to them and various other alleged requirements under workers compensation legislation had not been met was also misconceived. There was no jurisdiction for any order to be made on this basis in the Commission.

[92] Mr Hardless submitted that:

•  The application required the Commission to turn its mind to two questions of law, the first being whether the directions given to Mr Hardless by BAE were reasonable and the second being how those things affect the balance of convenience. It was therefore reasonable to make the application and the orders were justified to preserve the status quo in the case and to allow Mr Hardless to preserve his capacity to advance the substantive application.

•  Given the application asked the Commission to determine arguable questions of law, it is not appropriate for the Commission to find that there was no reasonable cause for making the application.

•  In the first instance Mr Hardless’ solicitor put forward detailed questions and alternative proposals and advised that Mr Hardless was most willing to attend a meeting by telephone or attend a medical examination within reasonable proximity to his residence. These informal attempts were unsuccessful and lead to the making of the application.

•  Making the application lead to BAE withdrawing its direction to attend the workplace and in them altering the location of the medical examination. Had the directions been reasonable prior to the application, then there would have been no need to make the application. This supports an inference being drawn that at the time of the making of the application there was a reasonable prospect of success.

Decision

[93] In some circumstances, parties to Anti-bullying matters may seek to have certain preliminary issues dealt with prior to the substantive matters of issuing an order to stop bullying being determined. The Commission has powers to make interim decisions generally under s.589(2) and specifically under s.789FF of the Act. In Re Bayley 14Commissioner Hampton determined he had power to make interim orders to prevent further steps in an investigation process.

[94] This application arose as a result of Mr Hardless’ concern that he was about to be dismissed. At the hearing of the application, BAE withdrew one of the demands that gave rise to the application. The application was resolved by discussion with the assistance of the Commission. I accept that Mr Hardless genuinely felt that his continued employment was at risk and I am not satisfied that the application was vexatious, without cause or had no prospect of success.

[95] The circumstances in respect of this application do not form an appropriate basis for the exercise of my discretion to award costs.

Fifth Application: Hardless’ applications objecting to BAE’s evidence – 28 March and 1

April 2019

[96] On 28 March 2019, approximately two hours prior to a Directions Hearing, Mr Hardless made an application to strike out significant parts of the evidence filed for the Respondents. No indication had previously been provided that there was any objection to the evidence filed.

[97] At the Hearing, some of the objections were discussed and it became apparent that many were misconceived and many were withdrawn by Mr Hardless’ representative. With only one very minor wording amendment, all the objections that were determined were dismissed.

[98] Mr Hardless’ representative made a comment to the effect that he had not read the objections prior to the application being made. The Commission provided Mr Hardless with the opportunity to seek advice and reconsider the objections that had been filed, with any objections that were pressed to be dealt with at a later date.

[99] It is submitted that at the time the application was filed it was filed without reasonable cause and/or in circumstances where it ought to have been apparent that it had no reasonable prospects of success.

[100] Subsequently, on 1 April 2019, Mr Hardless made a further application seeking to strike out parts of the Respondents’ evidence. BAE took steps in relation to the application to review and consider its position on these objections and Counsel had also been consulted. The objections were also the subject of oral argument at the Hearing on 4 April 2019.

[101] Mr Hardless submitted that an application must be submitted in the approved form and if no specific form exists, then a Form F1 application must be used. On this basis, Mr Hardless submits that his objections to the evidence cannot therefore be regarded as an ‘application’ within the meaning of s.611 of the Act and cannot be the subject of a cost order. In the alternative, if the Commission is of the view that there was a proper application before it, then the following should be taken into account: 15

•  The objections were initially put together by Mr Hardless. However, after they were discussed for 5 minutes at hearing, the Commission directed Mr Hardless to have them reviewed by a lawyer. After the direction was given, and once settled by Counsel, a concise and sound set of objections were lodged.

•  The objections were not dissimilar to those made by BAE in review of Mr Hardless’ statement. If the rules of evidence are strictly applied to Mr Hardless’ objections, then it is unreasonable that they not also be applied to BAE’s objections.

•  The application of the rules of evidence is an arguable point of law and therefore it is not appropriate for the Commission to find that there was no reasonable cause for objecting to the evidence.

•  The objections were not heard and the parties were not directed to file any submissions in relation to them. On this basis, there is insufficient basis to determine if the applications were brought without reasonable cause.

Decision

[102] As noted earlier, this s.789FC application was rigorously litigated by the parties. It appears that after BAE’s criticism of Mr Hardless material, Mr Hardless returned fire. Unfortunately, it appears that Mr Philip Hardless left the task of reviewing BAE’s material to Mr Benedict Hardless with his limited legal skill - this was an unwise decision. I am not persuaded that the application to strike out some of BAE’s evidence was vexatious, without cause or had no prospect of success. The circumstances in respect of this application do not form an appropriate basis for the exercise of my discretion to award costs.

Sixth Application: Hardless’ applications for an adjournment and appeal – 3 April 2019

[103] One of the interlocutory disputes in this proceeding which is not the subject of a costs application related to whether the Investigation Report was privileged or not. At the Hearing on 28 March 2019, the Commission indicated that the decision was that the document was subject to legal professional privilege and a decision would be published shortly thereafter. The Decision was published on 1 April 2019.

[104] Mr Hardless indicated an intention to appeal, and on 2 April 2019 the Commission advised that the hearing would proceed unless a stay was obtained. The Commission requested that any stay application be filed by midday on 5 April 2019 (the day before the substantive hearing was scheduled to commence).

[105] On 3 April 2019, Mr Hardless filed an application seeking the hearing be stayed on the basis of the appeal (which had not at that stage been filed).

[106] Submissions were filed by both parties on 4 April 2019 in advance of a hearing. After oral argument, the hearing was adjourned to enable Mr Hardless to file his appeal, which he did, following which the hearing reconvened for further oral submissions on the application. The adjournment was refused.

[107] On the morning of 5 April 2019, BAE filed further material, shortly afterwards, the appeal and the substantive proceeding were both discontinued.

[108] BAE submitted that both the application for the stay and the application for the appeal were made vexatiously, or without reasonable cause and/or in circumstances where it ought to have been apparent that there was no reasonable prospect of success for the following reasons:

•  The stay application was made when no appeal had been filed, and after the Commission had informed Mr Hardless it would not be staying the proceeding unless a stay order was made in connection with the appeal.

•  The grounds for the stay application (being the alleged instructions to make an appeal which had not been made) did not provide a reasonable basis for the order to be made.

•  In the appeal, the grounds included matters in respect of which it is submitted it should have been apparent there was no reasonable prospect of success on the basis that:

•  The appeal wrongly asserted as errors of law matters that had previously been determined by authorities;

•  It wrongly asserted as errors of law matters that were expressly considered by the Commissioner had not been considered, including matters which were the subject of oral and written submissions; and

•  An objective view of the assertions made in the appeal demonstrates they were baseless and, objectively considered, provide a basis for the Commission to infer that the appeal was brought in order to delay the substantive proceeding (rather than as a genuine appeal).

•  The Applicant did not seek expedited hearing of the appeal.

•  The course of conduct of Mr Hardless from the time he was informed of the outcome of the privilege decision on 28 March 2019 to 5 April 2019 support an inference being made that he had no intention of proceeding with the substantive hearing at the time the stay application was made and the appeal was filed. If this inference is drawn, it is submitted these applications were made for a collateral purpose (being to avoid proceeding to a substantive hearing) and/or were unfairly burdensome and productive of serious and unjustified trouble, and accordingly were vexatious.

[109] Mr Hardless submitted the following:

•  The request for an adjournment was to prepare an appeal, which if successful would have made available a document of immense forensic value to the case. Therefore, it cannot be said that such request for an adjournment was unreasonable, without reasonable cause or vexatious.

•  An appeal should normally be lodged within 21 days of a decision being made, however given the matter was proceeding there was no time to prepare for the appeal without seeking an adjournment. During the adjournment the Commissioner opined that it would strengthen the grounds for an adjournment if there was an appeal reference number. A reference number was promptly obtained.

•  Comprehensive reasons were made in the appeal application and those reasons are relied on. Given the appeal contained several arguable points of law, it is not appropriate for the Commission to find that there was no reasonable cause for making the application and the Commission should not speculate as to matters that would have been determined by the Full Bench.

•  Since no directions were issued in respect of the appeal application, and the application was not the subject of any proceedings whatsoever, there is insufficient basis to determine if the application was brought without reasonable cause.

•  In relation to the application for an adjournment, the Commissioner exercised his discretion “balancing [the] need for prompt resolution versus potential prejudice”, noting that “none of the options are perfect, all involve a risk of wasted costs, time and potential inefficiencies”. The mere fact that Mr Hardless did not prevail in the application does not establish that it was unreasonable, without reasonable cause or manifestly groundless.

Decision

[110] On the information before me I am unable to conclude that the application for a stay (or an adjournment) of the hearing to allow the (at that stage foreshadowed) appeal to run its course was vexatious, without cause or had no prospect of success.

[111] In respect of complaints in relation to the conduct of the appeal, that is not a matter for me to determine - that application is a matter for the Full Bench.

[112] With regard to Mr Hardless’ conduct of the matter after my decision to refuse to require production of the material over which legal professional privilege was claimed, I am not satisfied that the Anti-bullying application was made for a collateral purpose (i.e. vexatiously).

[113] Whilst it could be argued that this ruling should have been made earlier in the process, my focus (consistent with my obligations under s.577 of the Act and acknowledging the desirability of preserving the relationship in s.789FC cases) was to seek to resolve the matter by consent. As a result, the resolution of a technical legal question was deferred.

[114] The withdrawal of the application was made on the Friday before the Appeal, which was due to start on the Monday in Wagga Wagga. It was made after Mr Hardless and his representative had travelled to the hearing location. It was made shortly after BAE provided additional evidence in compliance with the compressed timeframes.

[115] Whilst the decision to withdraw was made at a late stage, it was made early enough to reduce the impact of travel costs on the Commission and BAE.

[116] There is a need to carefully consider the basis upon which a matter is withdrawn just before a hearing. To impose costs on all late withdrawals may force applicants to proceed in cases where they would not wish to do so. Not to impose costs may reward those who do nothing to prepare and withdraw at the last minute.

[117] There is no suggestion that Mr Hardless had not prepared for the hearing of his application. There is no evidence to contradict the reasoning provided by Mr Hardless in respect of his decision to withdraw.

[118] I do not believe that Mr Hardless’ actions in seeking a stay and his conduct post 28 March 2019 provide an appropriate basis upon which to exercise my discretion to award costs.

Conclusion

[119] For the reasons provided above, BAE’s costs application is dismissed. I apologise to the parties for the delay in publishing my formal decision and the provision of these reasons. An Order 16 reflecting this Decision will also be issued.

COMMISSIONER

Appearances:

B Hardless the Applicant.

E Hawthorne of Counsel on behalf of the Respondent.

Hearing details:

2019.

Adelaide:

July 10.

Printed by authority of the Commonwealth Government Printer

<PR715778>

 1   BAE’s submission dated 10 May 2019 including the chronology, Statement of Mr Henry Skene including schedule of attendances and costs, BAE’s reply submissions dated 24 May 2019, Submission by Mr Hardless dated 20 May 2019, Email dated 17 June 2019, Statement of Philip Hardless dated 14 June 2019, Report of Dr Joanna Barkla dated 8 March 2019, Letter dated 21 November 2018 from Mr Hardless’ representative to BAE’s representatives contained an offer concerning the production of the Investigation Report, Wotif Hotel Booking for Wagga Wagga between 1 -13 April 2019 for Mr Benedict Hardless, Copy of Qantas flight itinerary for Mr Philip Hardless for flights between Perth and Wagga Wagga and return to Sydney. Email from Mr Hardless to FWC (containing submissions) dated 24 June 2019.

 2   [2019] FWC 2114.

 3   [2019] FWC 2262.

 4   Church v Eastern Health T/A Easter Health Great Wealth and Wellbeing[2014] FWCFB 810.

 5   Nilsen v Loyal Orange Trust (1997) 76 IR 377; Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16.

 6   Church v Eastern Health T/A Easter Health Great Wealth and Wellbeing[2014] FWCFB 810 citing Heidt v Crysler Australia Limited (1976) 26 FLR 257.

 7   [2013] FWC 224.

 8   [2019] FWC 609.

 9   Baker v Salver Resources Pty Ltd [2012] FWAFB 4014 citing Deane v Paper Australia Pty Ltd, PR932454 (Giudice J, Williams SDP, Simmonds C, 6 June 2003).

 10   [2016] FWC 8753.

 11   Ibid.

 12   [2011] FWAFB 4014.

 13   Thompson v John Holland Group Pty Ltd[2012] FWA 10363.

 14   [2017] FWC 1886.

 15   Respondent’s Submissions in Response to Application for Costs paras [67]-[70].

 16   PR705779.