Brendan Mitchell v Shepherd Group Services Pty Ltd

[2014] FWC 8625

[2014] FWC 8625

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Brendan Mitchell
v
Shepherd Group Services Pty Ltd
(U2014/10108)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 1 DECEMBER 2014

Application for costs.

[1] Shepherd Group Services Pty Ltd (Shepherd Group) has applied for cost against Brendan Mitchell.

[2] Mr Mitchell lodged an unfair dismissal application alleging that Shepherd Group had unfairly dismissed him.

[3] On 8 October 2014, I issued a decision 1 dismissing Mr Mitchell’s application because he failed to comply with directions issued by the Commission. That decision sets out the background in relation to this matter and I do not repeat those matters here.

[4] On 14 October 2014, Shepherd Group filed an application for costs against Mr Mitchell. It relied upon ss.611(a) and (b) of the Fair Work Act 2009.

[5] Mr Mitchell was notified of the hearing and advised my chambers that he would not be attending because he needed to attend work and could not afford to take the time off. Mr Mitchell was advised the hearing would proceed and the matter would be determined and that he could file material prior to the hearing. Mr Mitchell did not file any material.

[6] Section 611 of the Act provides the Fair Work Commission with the power to award costs in certain circumstances:

“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).”

Submissions of Shepherd Group

[7] It was submitted on 31 July 2014 Mr Mitchell should have been aware that his application was vexatious and without reasonable cause. 2 This was the date the conciliator advised the parties that the matter would proceed to hearing.

[8] On 7 August 2014, Mr Pinchin filed a notice of representative commencing to act and on the same day advised that he had ceased to act. It was submitted that it could be inferred that Mr Mitchell had been advised by Mr Pinchin that the application had no reasonable prospect of success. It was submitted that from this point on the application became vexatious and that Mr Mitchell should have know that his application had no reasonable prospects of success. 3

[9] It was further submitted that once the directions were issued on 31 July 2014, Mr Mitchell had no intention of pursuing the matter and he must have been aware that his failure to comply with directions meant that his application could not possibly succeed. 4 His failure to discontinue the application was vexatious and calculated to cause cost and inconvenience to Shepherd Group.

[10] It was submitted that Mr Mitchell deliberately ignored all directions of the Commission “for the purpose of causing maximum cost and inconvenience” to Shepherd Group. 5

[11] It was submitted that Shepherd Group, as a member of the Civil Contractors Federation, chose to be represented by it in the proceedings. While the Federation provides some free support hours once those have been used the Federation charges its members for services.

[12] The Federation itemised the services it provided to Shepherd Group.

Consideration

[13] The Full Bench in ACI Operations Pty Ltd v Mr Dale Cook 6 adopted the approach of Commissioner Thatcher in Walker v Mittigong Sands Pty Ltd:7

“[11] The general position in proceedings before Fair Work Australia is that each party bears their own costs: s.611(1). However costs may be awarded in either of the circumstances described in s.611(2). In this case it is contended that the appeal by ACI had “no reasonable prospect of success.” If such a finding is made Fair Work Australia has discretion to make an order for costs.
[12] After reviewing relevant authorities on the power to order the payment of costs and the notion of “no reasonable prospect of success”, Commissioner Thatcher in Walker v Mittagong Sands Pty Ltd 3 said:

“[44] In relation to the criteria ‘without reasonable cause’ and ‘no reasonable prospect of success’, I have concluded that:

(a) the criteria ‘no reasonable prospect of success’ in paragraph 611(2)(b) is lower and wider than the term ‘without reasonable cause’ referred to in paragraph 611(2)(a), which is similar to the test traditionally applied by a court to summarily dismiss actions. Circumstances which satisfy the ‘without reasonable cause’ test would be likely to satisfy the ‘no reasonable prospect of success’ criterion, but the reverse would not necessarily apply.
(b) when FWA is required to form an opinion as to whether the application had a reasonable prospect of success, it is not to undertake an assessment of whether a certain and concluded determination could be made that the proceedings would necessarily fail. The test in paragraph 611(2)(b) is not about whether there is no ‘real’ prospect of success and does not of necessity require that the proceedings were hopeless or bound to fail (by applying a test such as whether an application is manifestly untenable or groundless).
(c) a similar approach should be taken by FWA to the construction of the expression ‘no reasonable prospect of success’ as was adopted by the majority of members of the High Court in Spencer in respect of the term ‘no reasonable prospect’, namely:

“No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is ‘no reasonable prospect’. The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like ‘no reasonable prospect’ is to be avoided. ... Rather, full weight must be given to the expression as a whole.”

(d) it is a matter of judgment, sometimes of fine judgment, in all of the circumstances of a particular case whether an application or response had no reasonable prospect of success.
(e) an assessment of whether an application or response was made without reasonable cause or had no reasonable prospect of success should be undertaken with caution, particularly when the matter had not been determined by FWA and questions of fact and issues of law are important and in dispute.”

[13] We respectfully endorse this summary of the approach to be adopted.”

[14] Mr Mitchell’s employment was terminated for misconduct in circumstances where he had previous warnings about his performance.

[15] The test to be applied in determining whether an application had no reasonable prospects of success is an objective one.

[16] I am not able to infer that because Mr Pitchen ceased to represent Mr Mitchell that Mr Mitchell must have been told that his application had no reasonable prospects of success. I cannot conclude that Mr Mitchell’s failure to file material in support of his claim meant that he knew he had no reasonable prospects of success. While the failure to file material in support of his claim may have made his task at the hearing of the matter more difficult, in that he may have been limited at the hearing to cross examining the witnesses for the Respondent and would only have been permitted to lead evidence at the hearing if the presiding member gave him such leave, it cannot be concluded prior to the respondent’s evidence being filed that he had no reasonable prospect of persuading the Commission that the dismissal was unfair.

[17] Wilcox J in Kanan v Australian Postal and Telecommunications Union 8 said as follows:

“It seems to be that one way of testing whether a proceeding is instituted “without reasonable cause” is to ask whether, upon the facts apparent to the application at the time of instituting the proceedings, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being “without reasonable cause”. But where on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may be properly said that the proceeding lacks a reasonable cause.”

[18] I am unable to find that Mr Mitchell’s application was made without reasonable cause. At the time the application was dismissed there had been no evidence filed by either party. Mr Mitchell’s application and Shepherd Group’s response indicates that there was a factual dispute between the parties about the events that led to the dismissal. It cannot be said based on those contested matters that Mr Mitchell’s application was made without reasonable cause.

[19] North J said in Nilsen v Loyal Orange Trust  9 that 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.”10

[20] There is no evidentiary basis on which I could conclude that Mr Mitchell instituted or maintained his application vexatiously.

[21] In this matter there was no application for costs made under s.400A of the Act.

[22] The application for costs is therefore dismissed.

DEPUTY PRESIDENT

Appearances:

Mr R Baonza and Mr C Shepherd representing the Respondent

Hearing details:

2014:

Melbourne to Sydney (by videolink);

31 October.

 1   [2014] FWC 7040

 2   Application for costs at 3(d).

 3   Ibid at 3(f).

 4   Ibid at 3(h).

 5   Ibid at 3(i).

 6   [2012] FWAFB 3292 see also McKinnon v Eventide Homes (Stawell) Inc [2013] FWCFB 9405

 7   [2011] FWA 2225

 8 9\(1992) 43 IR 257 at pp264-265

 9 76 IR 180

 10   Ibid at 181 and adopted by the Full Bench in Lisa Holland v Nude Pty Ltd [2101] FWAFB 6508 at [7]

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