Bradford Newbond v GM Holden Ltd
[2016] FWCFB 321
•15 JANUARY 2016
| [2016] FWCFB 321 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
GM Holden Ltd
(C2015/6748)
VICE PRESIDENT WATSON | MELBOURNE, 15 JANUARY 2016 |
Application for costs – Whether unreasonable act or omission – Whether application made vexatiously or without reasonable cause –– Fair Work Act 2009 – ss.400A and 611.
Introduction
[1] This decision concerns an application for costs made by GM Holden Ltd (GM Holden) against Bradford Newbond arising from an application for an extension of time to lodge an appeal, an application for permission to appeal, and an appeal that was listed for hearing before this Full Bench on 28 October 2015. Mr Newbond sought to appeal against a decision of Commissioner Wilson handed down on 2 September 2015. 1 The application for an extension of time to lodge the appeal was dismissed by the Full Bench on transcript at the conclusion of the hearing on 28 October 2015.2
[2] On 11 November 2015, GM Holden filed an application for costs pursuant to ss. 400A and 611 of the Fair Work Act 2009 (the Act). Directions were issued for the filing of written submissions by both parties on the agreed basis that the costs application would be determined on the papers. We have had regard to the submissions of the parties but not the further evidentiary materials filed.
Background
[3] On 22 December 2014 Mr Newbond made an application under s.394 of the Act for an unfair dismissal remedy. On 2 September 2015 Commissioner Wilson dismissed Mr Newbond’s application pursuant to s.399A of the Act.
[4] The 21 day period for lodging an appeal expired on 23 September 2015. On 28 September 2015 Mr Newbond lodged a Notice of Appeal in which he made an application for an extension of time to lodge the appeal, an application for permission to appeal, and an appeal against the decision of the Commissioner. In his Notice of Appeal, Mr Newbond contended that the Commissioner failed to give any or adequate reasons for finding that that Mr Newbond failed to comply with an order for the production of documents issued by the Commission on 13 May 2015. The matter was listed for hearing on 28 October 2015 and directions were issued for the parties to file written submissions.
[5] Mr Newbond submitted that the reason for the delay in filing his appeal was the time taken to fully consider the implications of the Commissioner’s decision, whether there was a basis to appeal the decision, seeking external advice, and obtaining instructions. He also contended that he was distracted by the implications of a costs application made by GM Holden against him and his representative following the Commissioner’s decision.
[6] GM Holden sent an email to Mr Newbond’s representative on 28 September 2015 noting that the appeal had been lodged out of time. The email also stated that there was no basis for an extension of time to be granted in the matter and that it would press for costs against Mr Newbond and his representative should Mr Newbond continue with the appeal. No response was received and the appeal was not withdrawn. On 30 September 2015, GM Holden again contacted Mr Newbond’s representative and asked whether Mr Newbond would withdraw the appeal if it withdrew its costs applications in the unfair dismissal matter. Mr Newbond’s representative advised the company that Mr Newbond would not agree to this and was committed to continue proceedings against GM Holden.
[7] As we have noted, the application for an extension of time to lodge the appeal was subsequently dismissed by the Full Bench on transcript at the conclusion of the hearing on 28 October 2015.
Legislation
[8] The power to make an order for costs is dealt with in s.611 of the Act which provides:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all ofthe 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).”
[9] It is well established that an order for costs is a discretionary matter when the basis for making a costs order is established. Section 611 contains a number of separate bases for granting an order for costs. An application has been held to be made without reasonable cause if it is so untenable that it cannot possibly succeed. 3
[10] Section 400A of the Act provides:
“400A Costs orders against parties
(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.”
Should an order for costs be made?
[11] GM Holden submits that Mr Newbond’s actions in persisting with the application for an extension of time to lodge his appeal, cognisant of the fact that there was no compelling reason for the delay, constitutes an unreasonable act in connection with the conduct and/or continuation of the matter as the application was untenable. It also submits that Mr Newbond acted unreasonably in connection with the conduct or continuation of the matter by failing to agree to terms of settlement that could have led to the appeal being discontinued.
[12] GM Holden further contends that as it is clear that Mr Newbond’s application for an extension of time to lodge an appeal was bound to fail, it can properly be said to be without reasonable cause and prospects of success. It relies on the fact that it would be contrary to public interest to permit Mr Newbond to appeal from a procedural order, the reasons provided by Mr Newbond for the delay are not compelling, and there was no merit in the grounds relied upon. It also submits that Mr Newbond’s actions in lodging the appeal were vexatious as demonstrated by Mr Newbond’s representative stating that Mr Newbond was committed to continuing litigation against the company and would try other avenues if he did not succeed with the appeal.
[13] Mr Newbond submits that no costs were caused because of an unreasonable act or omission by him. He further contends that the fact that the Full Bench were not persuaded to allow an extension of time for lodging the appeal, does not mean that the application was made vexatiously, without reasonable cause, or that it was apparent that he had no reasonable prospects of success.
[14] In our view, the concerns raised by GM Holden are understandable. It successfully argued that Mr Newbond’s unfair dismissal application should be dismissed because of repeated failures to provide relevant documents ordered to be produced by the Commission. It was then faced with an appeal against the decision that was lodged out of time. It sought to have the matter resolved through settlement proposals put to Mr Newbond’s representative – an experienced consultant in this jurisdiction. It was nevertheless put to the expense of representation at the hearing of the application that was dismissed by this Full Bench.
[15] An application for an extension of time to lodge an appeal is dependent entirely on the circumstances of the matter and involves a discretionary judgment. The considerations include the reason for the delay and the merits of the matter. In this case, if an extension of time was granted Mr Newbond would have needed to establish that it was in the public interest to grant permission to appeal. If successful he would need to establish that the decision of Commissioner Wilson involved appealable error. The decision under appeal concerned a failure to comply with orders of the Commission. The Commissioner found that in three respects the orders were not complied with. The Commissioner summarised his findings as follows:
“[62] In three important respects, the Applicant and his representatives have failed to provide documents to the Commission in the manner ordered; namely the provision of all diary or other notes pertaining to “his interactions at GM Holden”; the provision of information about and documentation pertaining to income from all sources earned since termination; and bank account statements for the period since December 2014. In each of those respects, I am satisfied that the Applicant and his representatives have unreasonably failed to provide such documents. I am satisfied that even with the chance to reflect upon the matter since the time the Respondent put the Applicant on notice that it regarded him as being in breach of the Commission’s order, and even with the prospect of the Applicant’s substantive unfair dismissal application being dismissed as a consequence, there have been no steps taken by either the Applicant or his representatives to ensure full compliance with the order, even at this late time.
[63] This is not a circumstance in which the Applicant or his representative have put to the Commission in the course of the hearing on the matter either that there is no information or documents to be provided in any of the three outstanding classes or, in the alternative, that they have all remaining documents ready to be tabled to the Commission.
[64] As a result, I am satisfied that the Applicant has unreasonably failed to comply with an order of the Commission relating to his application.
[65] As a consequence, Mr Newbond’s application for unfair dismissal remedy is dismissed pursuant to s.399A of the Act.”
[16] In relation to the extension of time to lodge the appeal Mr Newbond submitted that the prospects of success and importance of the matter weigh in favour of an extension even through the reasons for the delay were not highly compelling. As to the merits of the appeal he submitted:
“Why the appeal should be upheld
12. The dismissal of the application was determined to arise from unreasonably failing to comply with the order issued by Commissioner Blair on 13 May 2015, which required compliance by 4pm that same day.
13. The Appellant had no reasonable opportunity in which to comply.
14. Commissioner Wilson failed to explain his reasons why the failure to comply was unreasonable in the circumstances of the order.
15. There were significant deficiencies with the order that made non-compliance not unreasonable. They are:
a. The order was not issued until 13 May 2015 with compliance required at 4pm that day.
b. The order contained items that are, in our submission, out of the scope of the matters that can be ordered under s590(2)(c) in that it required him to disclose matters as to the evidence he is relying upon to support certain quotes (item 1) and to disclose whether he had been keeping a diary (item 2 of the Schedule of the order). These are matters that appear to be best addressed in cross-examination and are not amenable to orders under s590(2)(c) which deals with documents, records or any other information.
c. The order required information, including the Appellant's personal bank records to be provided to the Respondent directly. This appears to be out of the scope of s590, which relates to the powers of the Commission to inform itself, not directly to another party to a proceeding.
16. The Respondent served the order on the Appellant not until 4.40pm on the day of issue, which was after the 4.00pm date for return. The Respondent acknowledged this was “well-nigh impossible” to comply with (pn 166 of transcript). In fact it was impossible to comply with.
17. Commissioner Wilson erred in adopting a too liberal a definition of ‘diary’, which was sought under item 2 of the Schedule of the order. The dictionary definition of ‘diary’ could not encompass all notes of events as found at [40] of the decision.
18. Commissioner Wilson erred in finding there had been non-compliance under item 2 of the Schedule where he had made no finding that there were such documents and was clearly uncertain as to whether any such notes even existed relevant to item 2 (para [41]).
19. The Commissioner erred in deciding at [61] that earnings from non-work sources were relevant to the Commission's proceedings. Non-work related income is not relevant, in our submission, for the matters under S.387 in relation to merit or S.392 (2)(e) re remuneration from employment or other work in relation to compensation. Non-work earnings and the Appellant's bank records, in our submission, are items of information that can have no rational bearing upon a question for decision, therefore are irrelevant, and must be left out of further consideration (per McKinnon v Secretary, Department of Treasury.
20. Commissioner Wilson demonstrated a lack of reasonable balance in making findings strongly criticizing the conduct of AWNA for not making a formal application to vary or set aside the order, for not seeking another compliance date and for not ensuring that the Appellant complied, but he made no criticism of GMH for preparing an order that sought to require answers to questions and to provide materials directly to it (outside the arguable scope of s590(2)( c)), by serving on the Appellant an order that it knew was impossible to be complied with, or by not seeking a renewed order that could arguably be complied with.
21. Commissioner Wilson relied upon previous decisions which went to different issues of compliance with directions necessary to prosecute the application. There is no known case where non-compliance with similar issues resulted in summary dismissal of an otherwise properly prosecuted application.”
(references omitted)
[17] GM Holden submitted:
“D. Appeal from the exercise of a discretion - s.399A.
13. The decision on the application under s.399A involved the exercise of a discretion. The applicable principles are not in dispute.
14. Mr Newbond fails to identify error of the requisite nature. Each of the findings made by the Commissioner was open on the material before him. He was right to apply the approach adopted by SDP Richards in Allen v Army and Air Force Canteen Service. That decision is consistent with the recent Full Bench decision in Cranas v Berkeley Challenge Proprietary Ltd.
E. The challenge to the scope of the order.
15. Mr Newbond continues to contest the terms of the Notice to Produce. For the reasons stated above, that challenge lacks substance. That the matters the subject of the Order may be dealt with in cross-examination does not render the Order invalid. In any event, it is trite to say that he was required to comply with the Order no matter what view he or his representatives had as to the validity or enforceability of the Order.”
(references omitted)
[18] In our view, Mr Newbond’s actions in persisting with the application for an extension of time to lodge his appeal, aware that the reasons provided for the delay were not compelling and that the matter could have been resolved via alternative settlement proposals from the company, meant that Mr Newbond acted unreasonably in connection with the continuation of the matter and the application was made without reasonable cause. It follows that the Commission has jurisdiction to make a costs order.
[19] It remains necessary to consider whether an order for costs should be made in the circumstances of this case. The policy behind the power to award costs on this ground appears to be to discourage frivolous applications. It is not consistent with the objects of the Act that applications that do not have a sound basis are made and that they consume time, resources and costs of parties who are required to participate in them.
[20] In this matter, we note that correspondence was sent by GM Holden to Mr Newbond’s representative on two occasions noting that there was no basis for the extension of time to be granted and that it would press for costs should the appeal continue. The correspondence also proposed a settlement offer in relation to the discontinuance of the appeal. Notwithstanding these circumstances, GM Holden was put to the expense of filing an outline of submissions and the expense of representation at the hearing of the application on 28 October 2015. We have also had regard to all of the circumstances of the matter. The history of the proceedings discloses a repeated and unreasonable failure to comply with directions. A singular failure or delay can perhaps be excused. Repeated failures should not. Against the background of non-compliance the grounds for an extension of time to lodge an appeal were weak. In our view, the continuation of the application was an unreasonable act and Mr Newbond should bear responsibility for the consequences.
Conclusion
[21] In all of the circumstances we consider that Mr Newbond should be ordered to pay reasonable costs of preparing the outline of submissions in relation to the out of time appeal application and the expense of representation at the hearing of that application.
[22] We direct the parties to confer on the quantum of the costs incurred. In the event of a failure to agree on an amount to be paid an order will be settled by Deputy President Hamilton.
VICE PRESIDENT
Final written submissions:
GM Holden on 30 November 2015.
Mr B. Newbond on 7 December 2015.
GM Holden in reply on 14 December 2015.
1 [2015] FWC 6024.
2 [2015] FWCFB 7622.
3 General Steel Industries Inc v Commissioner for Railways (NSW) (1964)112 CLR 125.
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