Compuworld Pty Ltd v On Ni Liu
[2021] FWCFB 1048
•26 FEBRUARY 2021
| [2021] FWCFB 1048 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Compuworld Pty Ltd
v
On Ni Liu
(C2020/4575)
VICE PRESIDENT HATCHER | SYDNEY, 26 FEBRUARY 2021 |
Application for costs
Introduction and background
[1] In a decision 1 issued on 21 August 2020, we refused permission for Compuworld Pty Ltd (Compuworld) to appeal a decision and order issued by Deputy President Asbury on 22 May 2020.2 The Deputy President’s decision concerned the consent arbitration of a general protections dismissal claim made by Ms On Ni Liu against Compuworld. In her decision, the Deputy President determined that Compuworld had contravened ss 340 and 351 of the Fair Work Act 2009 (FW Act) by dismissing Ms Liu for reasons which included prohibited reasons, and the Deputy President ordered pursuant to s 369(2)(b) and (c) of the FW Act that Compuworld pay Ms Liu compensation totalling $52,094.60.3 In its notice of appeal, Compuworld contended that:
(1) the basis of the $15,000.00 awarded for non-economic loss was unjust;
(2) it was unjust to apportion full responsibility for the loss of income from the Commonwealth Government paid maternity leave scheme to Compuworld;
(3) the finding of discrimination was unjust, and disregarded the decline in business activity and the fact that two other employees were also made redundant; and
(4) the hearing before the Deputy President was favoured towards Ms Liu as she had legal representation and Compuworld did not.
[2] Ms Liu was granted permission for legal representation in the appeal pursuant to 596(2) of the FW Act.
[3] In our appeal decision, we concluded that it would not be in the public interest to grant permission to appeal because we were not persuaded that the Deputy President’s decision was tainted by legal or factual error or that her exercise of the discretion had miscarried, the matter turned on its own facts, and the appeal did not raise any genuine question of law or any issue of importance or general application.
[4] Ms Liu has now applied for her costs in respect of the appeal pursuant to s 611 of the FW Act. This decision is concerned with that application.
[5] Ms Liu contends that Compuworld’s appeal was made vexatiously, in that:
• the appeal constituted a refusal to accept and abide by the Deputy President’s decision, and Compuworld sought to delay the payment of the amount ordered to Ms Liu because it simply did not want to pay her;
• prior to the appeal, Compuworld had on 22 June 2020 obtained a stay of the Deputy President’s compensation order on the condition that it pay the amount awarded into an interest-bearing account operated by Ms Liu’s nominated legal representative by 29 June 2020, 4 but it had only paid the amount of $26,670.90 and the balance remained outstanding as at 18 January 2021;
• as such, the appeal was another deliberate action by Compuworld to put Ms Liu in a disadvantageous position since her termination of employment;
• the grounds of appeal were repetitious of submissions made during the hearing at first instance which were considered and rejected by the Deputy President; and
• Compuworld brought their appeal with the intention of harassing and annoying Ms Liu and with the intention of exploiting her disadvantageous emotional and financial position.
[6] Ms Liu also contended that Compuworld’s appeal was made “without there being any real reason, basis or purpose” and thus was brought without reasonable cause. In this respect, Ms Liu submitted that the appeal was so manifestly faulty that it did not admit of argument. In this respect, Ms Liu referred to our finding in respect of the fourth appeal ground, where we said that no material submissions were made in relation to this ground, no instances of “favour” towards Ms Liu were identified, and it therefore could not usefully be the subject of appellate consideration. 5 Ms Liu also referred to our finding in relation to the second appeal ground, where we said that the appeal ground did not allege any error nor provide any supporting evidence to establish an error.6
[7] Finally, Ms Liu contended that, on the facts known to Compuworld at the time it made the appeal, it should have been reasonably apparent that the appeal had no reasonable or substantial prospect of success. Ms Liu submitted that Compuworld did not raise an error of law or fact in the appeal, nor did they put forward any evidence that had not already been considered and well-traversed during the arbitration before the Deputy President. In addition to the findings concerning the second and fourth appeal grounds, Ms Liu referred to our conclusion concerning the first appeal ground, in which we said that the Deputy President’s award regarding non-economic loss was far from being unjust, counter intuitive or disharmonious with other authorities. 7 Ms Liu also referred to our conclusions regarding the third appeal ground, where we said that the evidence did not provide any support for Compuworld’s submission that the finding of discrimination was unjust, that the Deputy President had disregarded Compuworld’s business activity and other employee redundancies,8 and that Compuworld had not challenged the Deputy President’s credibility findings which were fundamental to her rejection of its case.9
[8] Ms Liu quantified her legal costs in the appeal as being $15,340.30 and she provided an itemised costs schedule to support this amount.
Consideration
[9] The power to award costs under s 611 of the FW Act is limited. The section provides:
611 Costs
(1) A person must bear the person's own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).
[10] In Hansen v Calvary Health Care Adelaide Limited 10a Full Bench said in relation to s 611 generally:
“[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).
[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all.”
[11] The relevant principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 11 and may be summarised as follows:
• An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
• An application is not made without reasonable cause simply because the application did not succeed.
• Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether 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 characterise the application as having been made without reasonable cause.
• In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
• An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed.
[12] In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 12as follows (footnotes omitted):
“[10] The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ 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.”
[13] We do not consider that there is any proper basis to conclude, pursuant to s 611(2)(a) of the FW Act, that Compuworld’s appeal was made vexatiously. Ms Liu has sought to impute improper motives for the making of Compuworld’s appeal, but her submissions in this respect do not rise above the level of assertion and appear to be based on nothing more than that the appeal was made. We do not consider that there is any reason to infer a motive other than that Compuworld was aggrieved by the Deputy President’s decision and order and wished to see it overturned in part or whole. That Compuworld’s appeal grounds were repetitious of submissions made before the Deputy President and rejected in her decision can hardly constitute a basis to infer improper motivation since it is often the case that submissions which are not accepted at first instance will succeed on appeal. If, as appears to be the case, Compuworld failed to comply with the condition attached to the stay order and if, since our appeal decision, it has failed to pay to Ms Liu the balance of the compensation amount ordered by the Deputy President, that is undoubtedly a serious matter, but we do not consider that this gives rise to an inference that the appeal was brought for an improper motive. We note that an order made pursuant to 369(2) is enforceable under Pt 4-1 of the FW Act.
[14] As is apparent from the authorities referred to above, there is a considerable overlap between the concept of an application being “made … without reasonable cause” in s 611(2)(a) and one where it “should have been reasonably apparent” to the applicant that the application “had no reasonable prospect of success” under s 611(2)(b). We are not persuaded that either criterion is satisfied in this case. Our decision to refuse permission to appeal was a discretionary one based upon an assessment of the merit of the appeal grounds and our characterisation of the nature of the proceeding and the issues raised by the appeal. Our conclusion that the appeal grounds lacked sufficient merit to justify the grant of permission in the public interest did not involve a finding that the appeal was manifestly untenable or groundless. The stay decision issued by the presiding member on 22 June 2020 13 included a finding that he was “very narrowly persuaded that ground 3 of the appeal is arguable and might have some prospects of success”. In circumstances where the Deputy President accepted that Compuworld’s “economic situation” was a (non-discriminatory) reason for Ms Liu’s termination,14 we do not consider that appeal ground 3, which contended that “a finding of discrimination was unjust”, can be said to have been manifestly untenable or groundless. Appeal ground 1, which challenged the award of $15,000 for non-economic loss on grounds including that it was “manifestly unjust” having regard to the Deputy President’s finding that there were other casual factors for Ms Liu’s mental distress following her dismissal,15 also cannot, in our opinion, be characterised as manifestly untenable or groundless. Although the other two appeal grounds may fairly be described as hopeless, the criteria in s 611(2)(a) and (b) must be satisfied on the basis of an assessment of the relevant application as a whole, and cannot be satisfied on a piecemeal basis with respect to particular grounds in an application. Because we are not persuaded that appeal grounds 1 and 3 were manifestly untenable or groundless and therefore inarguable, we cannot conclude that Compuworld’s appeal was made without reasonable cause or that it should have been reasonably apparent to Compuworld that the appeal had no reasonable prospect of success.
[15] Because we are not satisfied that any of the jurisdictional preconditions to the making of a costs order under s 611(2) have been made out, Ms Liu’s costs application must be dismissed.
VICE PRESIDENT
Determined on the basis of written submissions.
Printed by authority of the Commonwealth Government Printer
<PR727308>
1 [2020] FWCFB 4250
2 [2020] FWC 2569
3 PR719598
4 PR720401
5 [2020] FWCFB 4250 at [33]
6 Ibid at [27]-[28]
7 Ibid at [26]
8 Ibid at [29]
9 Ibid at [32]
10 [2016] FWCFB 8162
11 [2014] FWCFB 810, 240 IR 377 at [23]-[33]
12 [2011] FWAFB 4014, 211 IR 374
13 [2020] FWC 3270
14 [2020] FWC 2569 at [179]
15 Ibid at [215]
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