Bird v Royal Flying Doctor Service of Australia Central Operations

[2016] FWC 408

[2016] FWC 408

DECISION

Fair Work Act 2009

s.394—Unfair dismissal

s.400A – Costs

Julie-ann Bird

v

Royal Flying Doctor Service of Australia Central Operations T/A Royal

Flying Doctor Service, Central Operations

(U2015/9347)

COMMISSIONER HAMPTON ADELAIDE, 7 MARCH 2016

Application for costs by respondent employer in connection with an application for relief

from unfair dismissal – unfair dismissal application dismissed due to non-compliance with

directions – earlier settlement offers – whether applicant’s conduct unreasonable –

applicant’s conduct unreasonable in not discontinuing or engaging in the process having

failed to file materials – discretion exercised – limited costs awarded – order made.

1. Introduction

[1]        This is an application by the Royal Flying Doctor Service of Australia Central

Operations T/A Royal Flying Doctor Service, Central Operations (RFDS) seeking an order

for costs against Ms Julie-ann Bird pursuant to s.400A of the Fair Work Act 2009 (the FW

Act). The application is made in the context of an earlier application, by Ms Bird, claiming a

remedy for an alleged unfair dismissal pursuant to s.394 of the FW Act.

[2]        Ms Bird was a Flight Nurse working from the Alice Springs base operated by the

RFDS.
[3]	The s.394 unfair dismissal application was dismissed by the Commission following a

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s.399A application by the RFDS. The s.399A decision was issued on 1 December 2015. The

s.399A application was, for the most part, based upon the fact that Ms Bird had not complied

with a series of directions issued by the Commission in preparation for a scheduled hearing of

the unfair dismissal matter.

[4]        In the s.399A decision, the Commission concluded as follow:

“[17] Accordingly, pursuant to s.399A(1) of the FW Act, the Commission may

dismiss the unfair dismissal application if satisfied that Ms Bird has unreasonably

failed to comply with the directions.

[2016] FWC 408

[18] Ms Bird did not file any material in response to the s.399A application, and has

not provided any satisfactory reason for non-compliance with the relevant directions.

[19] I am satisfied that Ms Bird has unreasonably failed to comply with a direction

of the Commission in relation to the unfair dismissal matter. Ms Bird has also been

provided with a reasonable opportunity to advance her case in relation to the unfair

dismissal application, and the RFDS’ s.399A application, and has not done so. Indeed,

and in any event, the most recent indication is that Ms Bird does not intend to proceed

with the matter. In all of the circumstances I consider that it is appropriate to exercise

my discretion to dismiss the unfair dismissal application.

[20] Accordingly, Ms Bird’s unfair dismissal application is to be dismissed. An

order to that end is being issued in conjunction with this decision.”

[5]        In conjunction with the s.399A application, the RFDS also submitted a costs

application. In the s.399A decision the Commission advised the parties as follows in relation

to the costs application:

“[21] I have not dealt with the RFDS application for costs at this point. I have

adopted this course of action as the status of any discussions between the parties is not

clear and the RFDS may wish to rely upon communications and events that were

undertaken on a without prejudice basis (except as to costs). Further, given how the

events have unfolded, other than a broad summary of events provided with the costs

application, the RFDS has not had the opportunity to provide evidence or submissions

in support thereof.

[22] In that context, if the RFDS intends to proceed with its s.400A costs

application, it should provide any supporting evidence in the form of a sworn

statement. In that event, I will make appropriate arrangements for Ms Bird to be given

an opportunity to provide any response before determining that matter.

[23]      Liberty to apply is also granted.”

[6]        Directions were subsequently issued to the parties, providing for the filing of

submissions and evidence in support of their respective positions in relation to the costs

application. Those directions also included the capacity for the parties to seek a hearing, and

noted that should relevant disputed facts emerge, a hearing or conference would be convened.

The parties have now filed their material, no party has sought a hearing and there would not

appear to be a dispute on the facts that directly concern this costs application. That is, there is

a dispute about the fairness of the dismissal and the circumstances applying at that time,

however there is no apparent dispute about the facts associated with the conduct of the parties

in the context of proceedings associated with the s.394 application.

[7]        Accordingly, it is now appropriate to determine whether the costs application should

be granted based upon that material.

[2016] FWC 408

2. The power to award costs

[8] Sections 400A and 402 of the FW Act provide 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.

…

402 Applications for costs orders

An application for an order for costs under section 611 in relation to a matter arising

under this Part, or for costs under section 400A or 401, must be made within 14 days

after:

(a) the FWC determines the matter; or

(b) the matter is discontinued.”

[9]        The RFDS formally confirmed an intention to proceed with the costs application and

requested that the Commission determine the matter. This occurred within 14 days after the

dismissal of the unfair dismissal application by the Commission. I have taken that

confirmation to be an application and have waived compliance with the Fair Work

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Commission Rules 2013 to the extent required.

[10] The power to award costs is discretionary and subject to specified statutory

prerequisites. Costs do not follow the event as the presumption of the Act is that each party

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bears their own costs. However, costs may be awarded where the Commission is satisfied

that the unreasonable act or omission of a party, in connection with the continuation or

conduct of the matter, has caused the other party to incur costs.

3. Events surrounding the application

[11] On or around 15 July 2015, Ms Bird filed an application pursuant to s.394 of the FW

Act. On 23 July 2015, the RFDS filed a Form F3 Response with the Commission. Based on

those documents, Ms Bird contended that her dismissal was unfair because the alleged

misconduct relied upon by the RFDS was not severe enough to represent serious misconduct

and there was no procedural fairness in the decision making process of the employer. The
[2016] FWC 408

RFDS contended that there was a valid reason for dismissal associated with Ms Bird’s

conduct and that the dismissal was not unfair within the meaning of the FW Act.

[12] On 3 August 2015, the Commission received a Form F53 from a Solicitor

commencing to act for Ms Bird.

[13]      On 5 August 2015, the parties participated in a telephone Conciliation Conference

conducted by a Commission Conciliator. The RFDS proposed a settlement offer, which

included a payment equivalent to two weeks wages (approximately $4,352.22 gross) and

agreed to make that offer available to Ms Bird until close of business on 7 August 2015.

[14]      On 10 August 2015, the representatives for the parties held discussions in relation to

the offer and Ms Bird’s representative advised that the offer was rejected, and subsequently

put a counter-offer to the RFDS. The counter-offer included a payment equivalent to

13 weeks’ wages and a request that the RFDS’s findings that Ms Bird had been dishonest in

her employment, be retracted.

[15]      The RFDS, through its solicitor, rejected Ms Bird’s counter-offer and made an

alternate offer, which included a payment equivalent to five weeks’ wages (approximately

$10,880.56 gross). The offer was left open until close of business on 20 August 2015.

[16]      On 20 August 2015, Ms Bird’s representative advised of the rejection of the further

offer put by the RFDS and also made a further counter-offer in the following terms:

 Full and final release;

 Without admission of liability;

 Upon the payment of 10 weeks' pay;

 Subject to a deed of release which withdraws any allegation of dishonesty on the

part of Ms Bird; and

 that the termination of the employment be treated as a resignation.

[17]      The new counter-offer was available to the RFDS until the close of business on

28 August 2015.

[18]      On 3 September 2015, a Directions Conference was conducted by the Commission

and following consultation with the parties, the unfair dismissal matter was listed for hearing

on 21 and 22 December 2015 with directions relating to filing of Outlines of Argument and

Witness Statements to follow. During the Directions Conference, the concept of a Member

Assisted Conciliation (MAC) being conducted ahead of the hearing was discussed and agreed.

[19]      On 4 September 2015, Directions and a Notice of Listing in respect of the Hearing

were sent to both parties. The Directions required that Ms Bird file and serve her material by

2 November 2015. A similar direction was issued to the RFDS, with compliance required on

or before 16 November 2015.

[20]      The hearing in the matter was confirmed for 21 and 22 December 2015.

[2016] FWC 408

[21]      On 24 September 2015, the RFDS put a further settlement offer to Ms Bird (through

their respective representatives) as follows:

 Payment equivalent to six weeks’ salary ($13,066.27 gross), subject to the

execution of a Deed of Settlement and Discharge, the key components of which

would be:

 Denial of liability;

 Full and final release and satisfaction of all claims, including discontinuance of

the unfair dismissal application;

 Termination to be recorded as a resignation;

 Certificate of service (already provided);

 Mutual non-disparagement; and

 Confidentiality.

[22]      The offer was available to Ms Bird until close of business on 30 September 2015.

[23]      On 30 September 2015, Ms Bird’s representative requested that the time within which

to consider the offer be extended until close of business on 1 October 2015 so as to enable

him to seek instructions from his client. This was accommodated by the RFDS, however no

response was provided within the revised timetable.

[24]      On 7 October 2015, Ms Bird’s representative wrote to the RFDS representative,

apologising for not responding, and indicating that he had been waiting on instructions. At

that time, he advised that the employer’s offer would not be accepted and that he had no

further instructions in respect of a counter-offer.

[25]      On 12 October 2015, the parties participated in a MAC before a Member of the

Commission. During the MAC, the RFDS put a settlement offer to Ms Bird on the same terms

contained in its correspondence dated 24 September 2015. At the Applicant’s request, the

offer was left open until close of business on 13 October 2015.

[26]      At 3.56pm on 13 October 2015, the RFDS received an email from Ms Bird’s

representative confirming her acceptance of the settlement terms discussed at the MAC,

subject to the final terms of a deed. By agreement between the parties, the RFDS’s

representative undertook to prepare the deed of settlement and provide it to Ms Bird’s

representative by close of business on 14 October 2015. This was done.

[27]      At 11.22am on 14 October 2015, Ms Bird’s representative emailed the RFDS’s

representative indicating that the contents of the Deed were appropriate and that he would

provide it to her by mail that day.

[28]      On 22 October 2015, not having received an executed Deed from Ms Bird, the

RFDS’s representative contacted her representative, via phone and email, to seek an update on

the status of the Deed.

[29] On 27 October 2015, Ms Bird’s representative contacted the RFDS’s representative

and confirmed that the Deed had been provided to his client, in hard and soft copy.
[2016] FWC 408

[30]      At 12.01pm on 28 October 2015, not having heard from Ms Bird’s representative, the

RFDS’s representative contacted him via telephone to ascertain the status of the Deed. At that

time, Ms Bird’s representative advised that he had been trying all morning to contact her

without success. The RFDS advised that it was considering its position in respect to the

settlement offer.

[31]      At 4.59pm on 28 October 2015, correspondence was sent to Ms Bird’s representative

noting that, despite the in-principle agreement reached by the parties almost two weeks prior,

no executed copy of the Deed had been received. Ms Bird’s Representative was advised that

the in-principle agreement would remain open to her only until close of business on Friday,

30 October 2015 and that, if the executed Deed was not provided by that time, the settlement

offer would be withdrawn. Furthermore, that correspondence stated:

“Please also be advised that, if your client is unsuccessful at trial, I am instructed to

make an application for costs against your client pursuant to section 400A of the Fair

Work Act 2009 (Cth). I consider that support for such an action would be found in

your client's conduct to date.”

[32]      At approximately 10.25am on 30 October 2015, Ms Bird’s representative contacted

the RFDS’s representative, via phone, and advised that the RFDS’s settlement offer had been

refused and the Deed would not be signed. The Commission was advised shortly thereafter by

the RFDS’s representative that the applicant had decided not to proceed with the in-principle

agreement.

[33]      At 11.32am on 30 October 2015, email correspondence was sent to the parties from

the Commission, confirming that the Directions issued on 4 September 2015 would need to be

adhered to, and any requests for extensions must be submitted at the earliest opportunity.

[34]      At 8.58am on 2 November 2015, Ms Bird’s representative sent email correspondence

to the Commission seeking an extension of time to file her materials, on the basis that

Ms Bird was not contactable due to her need to attend to a family illness interstate, and that it

was unlikely that she would be in a position to complete her submissions by close of business

on that day. This extension was opposed by the RFDS.

[35]      At 1.28pm on 2 November 2015, email correspondence was sent to the parties

confirming that the Commission had granted a seven day extension to Ms Bird to file her

submissions (with some additional time being provided to the RFDS). Subsequently, the

RFDS continued in the preparation of its materials for the unfair dismissal application, which

were then due to be filed on or before 23 November 2015.

[36]      On 4 November 2015, Ms Bird’s then Representative submitted a Form F54 to the

Commission confirming that it was ceasing to act for her.

[37]      Ms Bird failed to file and serve her materials by close of business on 9 November

2015 as required by the amended directions.

[38]      On 10 November 2015, the RFDS made an application to dismiss the unfair dismissal

application under s.399A(1)(a) of the FW Act. Further, the RFDS made an application for

costs pursuant to s.400A of the FW Act in anticipation of a decision concerning the status of

the unfair dismissal matter.

[2016] FWC 408

[39]      Despite the s.399A application, the RFDS continued to prepare its materials in

anticipation of the Hearing proceeding, noting that its materials were due to be filed and

served by 23 November 2015.

[40]      On 13 November 2015, the Commission issued Directions to the parties in relation to

the RFDS’s s.399A application. The parties were directed as follows:

“The Commission directs as follows:

1.   On or before Wednesday 25 November 2015, the applicant is to file with the

Commission, and provide to the respondent, submissions providing reasons as to

why the Commission should not dismiss the unfair dismissal application, and any

evidence or other documentary material to support the reasons. Further she is to

file a submission outlining why costs should not be awarded against her.

2.    Should the applicant fail to file materials as required by Order 1 above, by the due

date, the Commission will deal with both applications on the basis of the material

already before the Commission, without further notice or hearing.

3.    In the event that the applicant files any materials as required, the respondent is, on

or before Monday 30 November 2015, to file with the Commission, and provide to

the applicant, any response to the submissions and evidence filed by the applicant.

4.    Subject to 5, the matter will be determined on the basis of the materials filed.

5.   If there are disputed facts relevant to either application or if a party seeks a

hearing, the matter will be listed for hearing at short notice.”

[41]      On 13 November 2015, Ms Bird sent an email to the Commission that was intended

for the RFDS’s representative indicating that she had not checked her emails due to family

issues and would like to come to a mutual agreement. This email was forwarded to the

RFDS’s representative by the Commission.

[42]      On 16 November 2015, the RFDS’s representative wrote to Ms Bird acknowledging

her wish to reach a mutual agreement and advised her that if she had a settlement offer that

she wished the employer to consider, she should advise them of this as soon as possible. At

the point of submitting materials in relation to the costs application, no response had been

received by the RFDS.

[43]      On 24 November 2015, the Commission wrote to Ms Bird and reminded her of the

requirement to file submissions in accordance with the directions issued on 13 November

2015. Furthermore, the Commission attempted to contact Ms Bird via telephone and left

voicemail messages on her mobile and home phones.

[44]      On that same day, Ms Bird returned the Commission’s phone call and stated she had

been in hospital for two weeks and that a private resolution had been agreed between the

parties and the matter would not be proceeding. Ms Bird stated that this required an apology

(from the RFDS) which would be forthcoming. The Commission requested that this be

confirmed in writing (email) and that the RFDS be advised.
[2016] FWC 408

[45]      On 25 November 2015, the RFDS received an SMS sent by Ms Bird advising that she

had “withdrawn from arbitration”' and that the Commission had been advised of that fact. The

RFDS advised the Commission of this development and the Commission confirmed the

nature of the advice received from Ms Bird on the previous day and that no written

confirmation had yet been provided.

[46]      On 27 November 2015, the Commission received email correspondence from the

RFDS’s representative indicating that they had not received any correspondence from

Ms Bird in relation to her withdrawal nor had they received her submissions with respect to

the unfair dismissal application or the s.399A application. Furthermore, a timeframe was

requested for determining the s.399A application given the impending hearing dates.

[47]      The s.399A application was determined by the Commission on 1 December 2015 in

accordance with the directions issued on 13 November 2015. Ms Bird did not file any

materials at that time and I note that some of the background circumstances and propositions

outlined in this decision have only been communicated by Ms Bird after the s.399A decision

was issued.

[48]      On 11 December 2015, the RFDS confirmed with the Commission that they wished to

pursue the s.400A application for costs against Ms Bird.

4. The position of the parties

4.1 RFDS

[49]      The RFDS contends that they have incurred costs of legal representation since the time

that Ms Bird filed her application. The RFDS did attempt to keep costs to a minimum

however, when the applicant failed to honour the in-principle agreement reached at the MAC,

the RFDS had to progress its preparations for “trial” so as to ensure its adhere to the

directions issued by the Commission.

[50]      The RFDS contends that the termination of Ms Bird was both procedurally and

substantively fair, however they have at all times attempted to reach a mutually agreeable

settlement in respect of the s.394 application.

[51]      Furthermore, the RFDS contends that they have incurred unnecessary costs as a result

of Ms Bird’s:

 Unreasonable conduct and continuation of her claim;

 Pursuit of her claim, despite the offer, and in-principle acceptance, of a reasonable

settlement offer;

 Acceptance and subsequent refusal of a settlement agreement;

 Failure to meet and comply with the Directions issued by the Commission; and

 Failure to file and serve a Notice of Discontinuance on or before 30 October 2015

as she made no attempt to prosecute her claim, file materials or comply with

directions generally, resulting in the RFDS unnecessarily preparing for the

Arbitration Conference/Hearing.

[2016] FWC 408

[52]      The RFDS contends that due to Ms Bird’s unreasonable conduct and continuation of

her claim, they have incurred costs that should now be met by Ms Bird.

[53]      THE RFDS relied upon an affidavit sworn by Ms Amanda Green, a Solicitor with

Normal Waterhouse Lawyers; being the RFDS’s legal representative in this matter.

4.2 Ms Bird

[54]      Ms Bird contends that she has afforded the RFDS every opportunity to “make

amends” and to apologise to her and that her offer is still available to the employer.

[55]      Ms Bird provided email correspondence between herself and the RFDS, which

occurred on 18 January 2016. In the correspondence, Ms Bird stated as follows:

 There are numerous allegations that she has been accused of which are defamatory,

without merit and cannot be substantiated;

 There are numerous emails that she refutes were never received by her during her

employment, including one that lead to her termination;

 The investigation that occurred prior to her dismissal was fundamentally floored

(sic) and she was not afforded procedural fairness; and

 She did not access the RFDS website, internet or email after she had been

suspended and cannot understand how she could be dismissed without any word

from the RFDS.

[56]      Additionally, Ms Bird provided email correspondence of the same date that provided

her summary of the events that led up to the day of the dismissal.

[57]      Ms Bird provided a statutory declaration confirming her views about the unfairness of

the dismissal, which also stated that “had the RFDS listened to me at conciliation and

reopened the “investigation”, I would have been exonerated of the allegations made in my

dismissal, a different outcome achieved and no further conciliation or arbitration required”.

[58]      In relation to the settlement offers, Ms Bird stated in the correspondence provided to

the Commission that:

 She feels she was pushed and coerced by her then Solicitor to sign the proposed

settlement agreement (the deed), which she declined to do;

 She was advised to sign the deed and move forward as arbitration would be too

stressful for her;

 She could not sign a deed that did not exonerate her;

 All she wanted from the conciliation was reinstatement, a retraction of the

allegations and an apology;

 She is still hopeful of achieving a mutually beneficial agreement between the

RFDS and herself;

 The offer put to the RFDS was fair and was:

 An apology and retraction of the false allegations;

[2016] FWC 408

 Credit for 5 months extra service to attain 10 years of service with the RFDS;

and

 Financial compensation.

 Her reputation both personally and professionally has been decimated and this has

caused her a lot of pain and suffering;

 She had had communication difficulties and did not use her home phone; and

 Overall she has lost a lot of confidence.

[59]      Ms Bird’s submissions and evidence did not engage with the issues relied upon by the

RFDS other than as set out above.

5. Consideration

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[60] In Sarah Wintle v Foothills Administration Centre Pty Ltd T/A Jim's Group Bissett C

helpfully provided the following context for the operation of s.400A of the FW Act:

“[11] Section 400A was inserted into the Act by virtue of Fair Work Amendment Act

2012. The concept of an 'unreasonable act or omission' in relation to a costs order has

been in the Act since it came into effect in 2009 – albeit only in relation to lawyers and

paid agents (see s.401(1)(b) of the Act as originally enacted) with s.401 reading as it

does today by virtue of the Fair Work Amendment Act 2012. The ability to make a

costs order where costs were incurred by an unreasonable act or omission of a party to

the matter was included in the Workplace Relations Act 1996 by virtue of the

Workplace Relations Amendment (WorkChoices) Act 2005.

[12] In Construction, Forestry, Mining and Energy Union v Benegalla Mining

Company Pty Limited (No 2) Katzman J found:

1. Before this amendment a costs order could only be made in a matter arising

under the Act (and its predecessors) if the proceeding had been brought

vexatiously or without reasonable cause. The Explanatory Memorandum to the

Work Choices Bill provides little guidance on the proper approach to deciding

whether an act or omission is unreasonable. It notes (in cl 2643) that a costs

order under the subsection (initially s 347(1A)) can be made irrespective of the

outcome of the proceeding. It provides an "illustrative example" of parties who

continually disregarded the court's directions by filing documents late and

continually raised frivolous arguments during the proceedings. I see no reason,

however, why the Court's power should be limited to circumstances of this

kind. Young J expressed a similar opinion in Paras v Public Service Body Head

of the Department of Infrastructure (No 3) [2006] FCA 745; (2006) 152 FCR

534. The section refers to "an unreasonable act or omission", not to a course of

conduct.

1. "Unreasonable" can mean several things. The Macquarie Dictionary

definition is:

1. not reasonable; not endowed with reason.

[2016] FWC 408

2. not guided by reason or good sense.

3. not agreeable to or willing to listen to reason.

4. not based on or in accordance with reason or sound judgement.

5. exceeding the bounds of reason; immoderate; exorbitant.

1. It seems to me that if the union's conduct can be characterised as not

endowed or guided by reason or good sense, or not based on or in accordance

with reason or sound judgment, it would be unreasonable within the meaning

of s 570. While the Court should not rush to the conclusion that a costs order

should be made, neither should it baulk at the prospect if the circumstances

warrant it. No party should assume that any old allegation may be made in

proceedings arising under the FW Act because it is unlikely to be penalised in

costs.

1. Certainly, the mere fact that the union made allegations of wrongdoing

which it later failed to pursue does not mean that its actions were unreasonable.

But this case does not simply concern the making of allegations which were

not pressed. There was in my view no proper foundation for making the

allegations in question in the first place or in pursuing them until the heel of the

hunt, especially when the folly of doing so was exposed by the evidence

Bengalla had served.

[13] The Explanatory Memorandum to the Fair Work Amendment Bill 2012 says of

s.400A:

[169] ...the power to award costs under section 400A is not intended to prevent

a party from robustly pursuing or defending an unfair dismissal claim. Rather,

the power is intended to address the small proportion of litigants who pursue or

defend unfair dismissal claims in an unreasonable manner. The power is only

intended to apply where there is clear evidence of unreasonable conduct by the

first party.

...

[171] However, the power to award costs is only available if the FWC is

satisfied that the act or omission by the first party was unreasonable. What is

an unreasonable act or omission will depend on the particular circumstances

but it is intended that the power only be exercised where there is clear evidence

of unreasonable conduct by the first party.

[14] The provisions of s.400A need to be read in the general context of costs matters

provided for in the Act. Section 611 of the Act states that a ‘person must bear the

person's own costs in relation to a matter before the FWC.’ Whilst section 400A and

s.587 allow for costs orders to be made the starting point for any consideration of an

award of costs must be that each party bears its own costs.”

[2016] FWC 408

[61]      As would be clear from the outline of events above, there is a significant disconnect

between the positions advanced by Ms Bird and the reality of her circumstances. That is,

despite:

 Failing to engage in and comply with the process leading to the scheduled hearing

of the unfair dismissal application;

 Subsequently informing the Commission that there was an agreement to settle the

matter (when there was not) and that she was not intending to continue with the

arbitration of the application;

 Having had the unfair dismissal application dismissed by the Commission; and

 Facing an application for costs as a consequence;

Ms Bird continues to be optimistic that a mutually beneficial settlement that exonerates her

will be achieved.

[62]      In that light, I have considered whether the issues involved at each stage of

proceedings have been sufficiently explained to Ms Bird. I am satisfied that they have been,

and that a reasonable opportunity to be heard and to explain her position has been provided at

each stage. Amongst the reasons for that satisfaction, I note that:

 Ms Bird was legally represented for much of the process leading to this point;

 Ms Bird was an employee in a professional position with apparent relevant

communication skills;

 At each stage, the requirements and issues involved were set out by the

Commission and the requirements were explained to the parties (including

Ms Bird) as part of the directions issued;

 There was an opportunity at each stage for Ms Bird to seek clarification from the

Commission and this occurred from time to time;

 There was a reasonable opportunity for Ms Bird to comply with the directions and

significant latitude was provided in terms of the timeframes, including when these

were not met; and

 Despite not being obliged to do so, staff of the Commission followed-up with

Ms Bird in the context of the directions when she failed to lodge materials, and in

so doing, further explained the requirements and context.

[63]      The RFDS costs application relies upon three propositions associated with Ms Bird’s

conduct; namely that Ms Bird is alleged to have unreasonably:

A	Continued with the unfair dismissal application despite the in-principle
acceptance of the settlement offer arising from the MAC;
B	Failed to comply with various directions of the Commission; and
C	Failed to lodge a notice of discontinuance with the Commission, which
required the RFDS to continue preparations for the scheduled hearing.

[64] Given the terms of s.400A of the FW Act, it is necessary to consider whether one or

more of these three propositions involved Ms Bird acting unreasonably, and if so, whether

those actions caused costs to be incurred by the RFDS. In the event of a positive finding on
[2016] FWC 408

both elements, associated with one or more of these contentions, a discretion will arise to

award costs, with such discretion to be exercised judicially.

[65]      I turn firstly to consider the proposition associated with the in-principle agreement to

settle the unfair dismissal application. The Commission has not heard or determined the merit

of the unfair dismissal application. There would however be little doubt that it would have

been prudent for Ms Bird to have accepted the in-principle agreement arising from the MAC

as apparently recommended by her then legal advisor. Indeed, based upon the material before

the Commission, it appears that Ms Bird did initially accept the proposal however following

consultation with her husband, refused to confirm the resolution. In the end, Ms Bird has not

had the substantive application heard and has not received any outcome at all.

[66]      However, the question arising from the Act is not whether Ms Bird’s actions were

imprudent (or whether the RFDS’s settlement offer was reasonable), but rather whether these

actions were objectively unreasonable. It is not contended by the RFDS that there was an

actual binding agreement to settle and in the absence of any capacity to make findings about

the substantive merit of the application (as would be the case if a decision on merit had

already been made) it is difficult to determine whether the continuation of the case was

unreasonable.

[67]      I am not satisfied that Ms Bird’s conduct in not settling her application was

unreasonable.

[68]      It is convenient to deal with the failure by Ms Bird to comply with directions issued by

the Commission, and the alleged failure to lodge a notice of discontinuance, together as they

largely involve the same events.

[69]      Based upon the events set out earlier in this decision and in the s.399A decision, there

is no doubt that Ms Bird failed to comply with some directions of the Commission. There

were two main instances where this occurred; being in relation to the filing and service of

materials required in support of her position in the unfair dismissal application, and the

provision of materials in relation to the s.399A application.

[70]      In summary, Ms Bird was directed to file submissions and witness statements in

relation to her position on the unfair dismissal application by 2 November 2015. No

submissions were received from Ms Bird by 2 November 2015, however on that day

Ms Bird’s representative sent an email to the Commission seeking an extension of time to file

her materials. The reasons for the request for the extension was that Ms Bird had not been

contactable due to her need to attend to a family illness interstate, and that it was unlikely that

Ms Bird would be in a position to complete her submissions by close of business on that day.

[71]      An extension for the filing of submissions was granted by the Commission following

Ms Bird’s request and she was then given until 9 November 2015. Ms Bird failed to file and

serve her materials by that time and no contact was made with the Commission by or on

behalf of Ms Bird.

[72]      On 13 November 2015, the Commission issued directions to the parties in relation to

the RFDS’s s.399A application. These directions required Ms Bird to file and serve, by

24 November 2015, reasons as to why the Commission should not dismiss her application and

any material to support these reasons. On that same day, Ms Bird sent an email to the
[2016] FWC 408

Commission (which was forwarded to the RFDS) indicating that she had not checked her

emails due to family issues, had declined to sign the deed, was seeking a retraction of the

allegations, and was keen to still come to a mutual agreement with the RFDS.

[73]      On 24 November 2015, the day before her submissions in relation to the s.399A

application were due, Ms Bird returned a telephone call from the Commission and advised,

amongst other matters, that the matter would not be proceeding. The Commission requested

that Ms Bird confirm her position in writing (email) and that the RFDS be advised.

[74]      Ms Bird failed to confirm this in writing with the Commission and did not comply

with the direction to file any materials with the Commission concerning the s.399A

application. However, Ms Bird communicated her position to the RFDS as follows:

"Dear Rob, I should be home from hospital tomorrow and will contact Amanda. Please

inform her that I have withdrawn from arbitration as so far the outcomes from

conciliation are not satisfactory to either party. I'm open to discussion from next week.

At present l have lost my voice and have limited hearing. I just want an equitable

outcome for RFDS and myself. I have informed fair work of my withdrawal from

5

arbitration.”

[75]      The s.399A decision was dismissed on 1 December 2015 and Ms Bird then

immediately contacted the Commission, repeated her earlier position and queried why the

unfair dismissal application had been “discontinued”, and indicated, in effect, that she was

following up the prospect of a private settlement with the RFDS as encouraged by the

Commission and the RFDS.

6

[76] Under the Fair Work Commission Rules 2013, the Commission is, amongst other

methods, able to accept a verbal discontinuance or a discontinuance communicated by email.

However, given the need for some certainty about Ms Bird’s position and noting the

problematic history of the matter, the Commission required Ms Bird to confirm her position

and the discontinuance in writing. This was not provided to the Commission, however as

outlined above, some communication was made by Ms Bird to the RFDS.

[77]      The RFDS was aware of Ms Bird’s intended withdrawal from the “arbitration”,

however for the same reasons that motivated the Commission to seek some formal

clarification of Ms Bird’s position, it was not unreasonable for the employer to await formal

confirmation that the unfair dismissal application had been discontinued by Ms Bird, or

dismissed by the Commission, before ceasing case preparations.

[78]      I have allowed for the real prospect that Ms Bird may have somehow conceived of a

basis whereby she could withdraw from the arbitration but retain a valid application that could

still be settled with the RFDS. This is at least one more generous interpretation of the events

as they have unfolded however this was not apparent at the time of the events or the s.399A

decision. Indeed, despite an opportunity to explain why costs should not be awarded against

her in the knowledge of the various propositions being advanced by the RFDS, Ms Bird has

not provided that explanation and her actual motivation and understanding can only be

implied from her more recent submissions.

[2016] FWC 408

[79]      The concept of somehow not proceeding with the arbitration, but retaining the

application in order to reach an agreement with the RFDS, was objectively untenable and this

should have been obvious from the history of the matter. Further, there was at that point not

only no agreement between the parties but there were no actual live settlement proposals. It is

also evident from Ms Bird’s view as how the application should have been resolved, that an

agreed resolution of that nature was very unlikely at that point.

[80]      I do note that Ms Bird had earlier signalled that she was seeking further discussions,

and to the RFDS’s credit, when contacted by her even at that very late stage, it indicated that

it would be prepared to consider any proposals that Ms Bird might advance. However, this

was before the events of 24 November 2015 and there were no proposals ever actually

advanced by Ms Bird, and this left the RFDS with no option but to conduct itself as if the

unfair dismissal application might proceed.

[81]      I have also considered the fact that at least in some communications, as referred to

above, Ms Bird refers to being in Hospital during mid-November. There is no evidence about

this or details about the impact that this may have had on her conduct around that time. Even

allowing for that circumstance at face value, this may be relevant to the question of not

lodging her materials in the lead up to the arbitration. However, this would not explain

Ms Bird’s subsequent disengagement from the process and the fact that she did not lodge or

confirm a discontinuance as requested by the Commission, or take up the earlier invitation

made by the RFDS to actually advance a settlement proposal, even at that late stage.

Objectively, this represents an unreasonable omission that also created unnecessary costs for

the RFDS.

[82] Accordingly, the prerequisites of s.400A of the FW Act have been met in this case and

a discretion to award costs arises. In exercising that discretion I have taken into account all of

the circumstances of the case, including those of the parties, and the fact that Ms Bird has

been on notice that costs may be sought by the RFDS.

[83]      On balance, I consider that some costs should be awarded in favour of the RFDS.

[84]      In this case I consider that the costs should reflect the basis upon which I have found

that the unreasonable act or omission led to the costs being incurred by the RFDS. This means

that an order for costs associated with the matter more generally is not appropriate. Rather, the

costs order should relate to those costs reasonably incurred by the RFDS in preparation for the

scheduled unfair dismissal hearing after 9 November 2015, including any costs associated

with following up Ms Bird’s non-compliance with the related directions.

[85]      The costs are to be paid within a period of 28 days from this decision, or the date that

the costs are taxed by the Commission, whichever is the latter. The RFDS is to provide a

written assessment of the costs to Ms Bird within 7 days. If the costs are not agreed within 14

days of the receipt of the assessment by Ms Bird, the RFDS is to lodge the assessment in the

Commission for referral to the relevant Presidential Member of the Commission for the

purpose of taxing the costs.
[2016] FWC 408

7

[86] An order to give effect to this decision is being issued today.

COMMISSIONER

Written submissions:

Ms Bird, 18 January 2016.

RFDS, 19 January 2016.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR576301>

1

[2015] FWC 8228, Order issued PR574554.

2

S.586 of the FW Act.

3

S.611 of the FW Act.

4

[2013] FWC 9407.

5

Text message to the RFDS from Ms Bird on 25 November 2015.

6

Rule 10(2).

7

PR577750.