Daniel King v Patrick Projects Pty Ltd

[2020] FWC 2758

[2020] FWC 2758

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.400A—Costs
s.401—Costs
s.611—Costs

Daniel King
v
Patrick Projects Pty Ltd
(U2014/7097)

COMMISSIONER JOHNS SYDNEY, 27 MAY 2020

Application for costs – Fair Work Act 2009 ss.400A; 401 and 611.

[1] People who incur legal costs in a matter before the Fair Work Commission (Commission) generally pay their own costs. 1 However, the Commission has the discretion to order one party to an unfair dismissal matter to pay the other party’s legal or representational costs, but only where the Commission is satisfied the matter was commenced or responded to:

a) vexatiously or without reasonable cause, 2 or

b) with no reasonable prospect of success. 3

[2] Costs may be awarded to one party if the Commission is satisfied that the costs were incurred as a result of an unreasonable act or omission of the other party. 4

[3] This decision is about whether the Respondent, Patrick Projects Pty Ltd (Patrick Projects), should be held liable for the costs of the Applicant, Daniel King, which he incurred in prosecuting an unfair dismissal application brought against Patrick Projects.

[4] Mr King commenced his unfair dismissal application (UFD Application) on 6 May 2014 in respect of his dismissal on 30 April 2014. The UFD Application was determined in Mr King’s favour on 30 November 2014. 5 This occurred in the context of Patrick Projects having accepted a recommendation made by her Honour Senior Deputy President Drake on 25 November 2014 that Patrick Projects concede that the dismissal was harsh, unjust or unreasonable. That concession occurred on the morning of the second day that Mr King was giving his evidence in the matter. There then followed a hearing and determination about what remedy should be awarded. At all times Mr King sought reinstatement. He was unsuccessful in that pursuit. On 17 March20176 Mr King was awarded compensation in the amount of $64,655.

[5] On 31 March 2017 Mr King made an Application for Costs. At the time of filing his Application for Costs the attached schedule of costs amounted to $41,307. The parties agreed that the question of whether Patrick Projects should be held liable for costs should be determined in advance of the question of quantum.

[6] The Application for Costs was listed for hearing on 16 December 2019. Thereafter the parties agreed upon a program for the filing and service of submissions that closed on 21 February 2020. However, on 2 March 2020 Mr King filed additional Supplementary Submissions outside of the agreed program. Notwithstanding, I agreed to accept the Supplementary Submissions, but provided Patrick Projects with an opportunity to respond to the same. On 5 March 2020 Patrick Projects advised my chambers that it “[did] not seek to raise any additional matters in reply.” Patrick Projects relies upon the materials it has filed to date.

[7] At the hearing of the matter on 16 December 2019,

a) the Applicant was represented by Mr D Garnsworthy of counsel. He was instructed by Mr C Strauss (who, on 28 September 2018, 7 I had determined was Mr King’s paid agent).

b) Mr Y Shariff of counsel. He was instructed by Mr J Parkinson, Senior Associate, Kingston Reid.

[8] On 28 September 2018 I granted both parties permission to be represented consistent with the decision in Warrell v FWC 8 because I was satisfied9 that:

a) in respect of the Applicant, he was unable to represent himself (s.596(2)(b)), and

b) in respect of the Respondent, the matter was invested with sufficient complexity such that the Commission would be assisted in the efficient conduct of the matter if I granted the Respondent permission to be represented by a lawyer.

[9] In advance of the hearing and then after it, the parties filed the following materials. Consequently, in coming to this decision the Commission, as presently constituted, has had regard to the following materials:

a) Form F6 – Application for costs dated 31 March 2017.

b) Finalised Chronology combining Mr Strauss’ revisions to the Respondent’s Chronology filed on 24 May 2019.

c) Applicant’s submissions regarding costs filed on 1 July 2019.

d) Applicant’s table of conduct of the Respondent and Representative filed on 1 July 2019.

e) Respondent’s outline of submissions regarding costs filed on 15 July 2019.

f) Applicant’s reply to the Respondent’s response regarding costs filed on 31 July 2019.

g) Respondent’s supplementary submissions dated 30 August 2019.

h) Applicant’s Reply to the Respondent’s Claim of Surprise dated 21 October 2019.

i) Respondent’s outline of closing submissions dated 17 January 2020.

j) Applicant’s reply to the Respondent’s outline of closing submissions filed 13 February 2020.

k) Applicant’s table of conduct of the Respondent and Representative filed 13 February 2020.

l) Respondent’s reply submissions dated 21 February 2020.

m) Applicant’s supplementary submissions on the Respondent’s submissions filed on 28 February 2020 (amended 2 March 2020).

n) Email correspondence from the Respondent dated 5 March 2020 advising that it does not want to file any further submissions.

Background

[10] This matter has a long history in the Commission. The hearing of the UFD Application was delayed by the lodgement and resolution of various Full Bench appeals from the decisions of other Members of the Commission. The costs application before me was delayed in most part because of the programming requests made by the parties (principally the Applicant’s representative).  The history of the matter can be summarised as follows:

a) Mr King commenced employment with Patrick Projects on 28 April 2012.

b) The employment of Mr King with Patrick Projects ceased with effect on 30 April 2014.

c) On 6 May 2014 Mr King and 5 co-workers filed unfair dismissal applications. Together with his 5 co-workers, the group self-styled themselves the “Concurrent Applicants”.

d) In his Form F2 Application Mr King claimed he had been unfairly dismissed because “The employer dismissed me for not attending work. I had not attended work as I had been stood down from work and then had a serious issue with the employer regarding ongoing bullying.” He sought a remedy of reinstatement and compensation.

e) On 27 May 2014 the Respondent filed its F3 Employer Response. It denied that it had unfairly dismissed Mr King. It contended that,

“The Applicant was terminated for his failure to follow the lawful and reasonable directions of his employer ... and report for work.”

f) On 12 December 2014 Mr King filed a Witness Statement. It is a broad chronology of events that Mr King alleged occurred in the workplace between December 2012 and his dismissal on 30 May 2014. There were no annexures to support any of the assertions.

g) At some point in late 2014/early 2015, Mr Strauss started to assist Mr King with representation in the Fair Work Commission. They agreed that they would sort out and agree the expenses in the end.

h) On 16 February 2015 Mr Strauss “officially” commenced assisting Mr King in relation to his UFD Application. At all times from then Mr King contended that he was self-represented.

i) On 16 and 17 February 2015 Mr King filed and served 11 volumes of documents in relation to his matter and that of the other Concurrent Applicants. It is not immediately apparent (without further explanation) or readily understandable how all of the documents were relevant to Mr King’s UFD Application.

j) On 20 April 2015 Commissioner Williams granted the Respondent permission to be represented in the unfair dismissal applications then before him involving the Concurrent Applicants (Williams’ Representation Decision). 10

k) Mr King appealed the Williams’ Representation Decision.

l) On 4 May 2015 a Full Bench (Catanzariti VP, Drake SDP and Riordan C) granted permission to appeal, upheld the appeal and remitted the applications to Drake SDP for hearing. 11

m) On 18 May 2016 her Honour Senior Deputy President Drake granted Patrick Projects permission to be represented. She did so because she was satisfied that “the applications would be dealt with more efficiently, taking into account the complexity of each application” (Drake’s Representation Decision). 12

n) On 27 July 2016 Drake’s Representation Decision was unsuccessfully appealed by the Concurrent Applicants. 13

o) The UFD Application of all the Concurrent Applicants were heard in August, October and on 24 and 25 November 2016 (with Mr King giving evidence on the 24th and part of the 25th).

p) During the course of his evidence Mr King was asked questions about:

i. an assault in the workplace. 14 He became distressed and had to withdraw.15

ii. the involvement of the Respondent’s human resources department (in particular Marion Storey) including in relation to the investigation of matters and also that of an external investigator.

iii. Events that occurred on his return to work and treatment by co-workers.

iv. Issues he had recorded in his diary.

v. Names he was called by co-workers.

vi. The stress he was experiencing and the treatment he received for it.

vii. Warnings he was given.

viii. Mr King’s claims that he was being bullied at work.

q) Ms Storey was not called by Patrick Projects to give evidence. The Senior Deputy President advised the Respondent that,

“There are matters here involving Ms Storey and Ms Storey is not being called so I’ll have no alternative but to accept the evidence in relation to those matters about which Mr King gives evidence in the absence of evidence from Ms Storey…” 16

r) Although Mr King had previously filed witness statements it was not tendered into evidence (although the Senior Deputy President invited Mr Strauss to do so). 17 The Senior Deputy President made clear to Mr Strauss that “I’m keen for you to understand that if you don’t tender it, I don’t have it. Just [having the statement contained] in the volumes [of documents filed] doesn’t count.”18

s) On 25 November 2016:

i. Mr King was recalled and gave evidence about such matters as:

A. the Patrick Projects redundancy process,

B. Entries in his diary,

C. His experience of ongoing bullying,

D. Ms Storey suggesting:

I. Mr King’s “life would be easier if [he] took a redundancy.” 19

II. “It would just be easier for me to sack youse both” (amongst other things). 20

ii. Immediately after the evidence about the conduct of Ms Storey, the Senior Deputy President asked Mr King to take a short break and leave the court room. At this time the Senior Deputy President suggested she thought,

“it would be useful if I had a conciliation conference with the parties separately and there are a couple of matters I would like to raise.” 21

iii. Both parties agreed to participate in conciliation. The Commission was “off the record” between 10.21 am – 11.04 am 22 and again between 11.18 am – 11.19 am when Patrick Projects advised the Senior Deputy President that it had some instructions.23

iv. Soon after the resumption at 11.19 am the Senior Deputy President announced,

“Mr King, the respondent and Mr Strauss – the respondent has indicated that it wishes to concede the question of your termination being harsh, unjust or unreasonable. That was the question that I put to them in conciliation and that, - which I put to in conciliation as well, that I told you that was my recommendation.” 24

v. It was decided that the hearing in relation to remedy would have to be programmed for hearing on another day. At this point Mr King’s UFD Application was split off from the other Concurrent Applicants.

t) On 30 November 2016 her Honour Senior Deputy President Drake issued a finding that “the termination of Mr King’s employment by the Respondent was harsh, unjust and unreasonable” and an Order about the future listing of the matter. 25

u) On 17 March 2017 her Honour Senior Deputy President Drake handed down her decision on remedy (Drake Remedy Decision). 26 At all times in the proceedings Mr King pursued reinstatement. Her Honour found that reinstatement was not an appropriate remedy in all of the circumstances of Mr King’s application. She determined under section 392 of the FW Act that the appropriate amount of compensation payable to Mr King was $64,655. This was, under s.392(5), the maximum amount of compensation permitted to be awarded to Mr King. The quantum was largely a measure of the Senior Deputy President finding that, but for the dismissal in May 2014, the Applicant would have remained employed by the Respondent until 31 December 2015 when “his position would have been made redundant at the same time that all other Patrick stevedores working on the Gorgon project were retrenched.”27

v) On 18 March 2017 Mr King and Mr Strauss had a discussion about seeking costs in the matter. Mr Strauss told Mr King he had prepared an itemised schedule of costs.

w) Mr King appealed the Drake Remedy Decision.

x) On 31 March 2017 (within 14 days of the Drake Remedy Decision) the Applicant made the present costs application.

y) With the untimely and regrettable early retirement of her Honour Senior Deputy President Drake, on 26 April 2017 the matter (outstanding costs application) was allocated to me.

z) On 12 April 2017 Mr Strauss wrote to Mr King in the following terms under the subject heading “Representation Expenses”.

“As discussed in 2014 and early 2015, when I started to assist you with your representation in the Fair Work Commission, we agreed that we would sort out and agree the expenses in the end.

While your matter is not fully finalised, with costs applications, notices of appeals, appeal hearings, immanent decisions to consider and other proceedings perhaps to come, your unfair dismissal matter was conceded on 30 November 2016 with remedy decided on 17 March 2017.

As discussed on 18 March 2017, I have prepared the itemised schedule of costs, which remains subject to amendment, with expenses as of then calculated as per schedule 3.1 to be $41,307.

As also agreed then, I request you now start to pay me for the expenses as you feel you can with the understanding the final amount is subject to change as proceedings continue and are finalised.

…”

aa) On 1 May 2017 I (with consent of the parties) agreed to adjourn the costs application pending hearing and determination of the appeal against the Drake Remedy Decision.

bb) On 8 May 2017 Mr King paid Mr Strauss $5,000.

cc) On 21 June 2017 the Full Bench refused permission to appeal the Drake Remedy Decision. 28

dd) On 27 October 2017 I sought the views of the Applicant about whether he pressed the Application for Costs.

ee) On 6 November 2017 the Applicant advised that he was pressing the Application for Costs. The issue of whether the Respondent would be granted permission to be represented and the costs application was programmed for submissions, and a hearing on 3 January 2018 (later changed at the request of the parties (usually the Applicant’s representative) on three occasions to 22 February 2018).

ff) On 23 January 2018 Mr King filed 16,976 pages of materials described as “Evidence of Costs”.

gg) On 25 January 2018 the Respondent complained about the materials filed by Mr King. It became necessary to vacate the hearing date on 22 February 2018.

hh) On 30 January 2018 the Respondent filed initial submissions relating to the Application for Costs. Those submissions largely addressed the quantum of costs. It was later decided to spilt the questions of liability for costs from the quantum of the costs.

ii) On 2 February 2018 Mr King’s representative complained about the Respondent being represented in the matter. Although Mr King has always denied that Mr Strauss was his paid agent, the status of Mr Strauss as a representative also needed to be resolved. It became necessary to address the representation issues in advance of the liability for costs issue. The representation issue was programmed for hearing on 5 March 2018 (later moved to 9 March 2018). The issue of representation then became the focus of the proceedings (rather than the liability for costs issue).

jj) On 23 February 2018 Mr King made an application under s.608 of the FW Act to have a question referred to the Federal Court. I deferred further dealing with the matters before me until that process was resolved.

kk) On 5 March 2018 Mr King filed a witness statement (dated 2 March 2018). In it he gave evidence about the relationship between he and Mr Strauss as follows:

“1.7 While I refer to myself, which may be the legal language, at all times I have been represented and assisted in representation, but not by a lawyer or a paid agent.

1.8 For example I did not write and type this witness statement or any other submissions during my proceedings.

…

3.13 However, I have for the most part been represented by Mr Christopher Strauss on a basis other than on a legal professional basis.

…

3.16 Mr Strauss is not a lawyer or trained or qualified in law, nor is he a paid agent who charges or receives a fee to represent parties in the Commission.

3.17 I understand a paid agent is described in the legislation. (section 12)

3.18 Mr Strauss and myself do not have any arrangement for any fee, Mr Strauss has not charged me a fee and I have not paid Mr Strauss a fee, so Mr Strauss has not received a fee from me.

3.19 When I say fee, I mean hourly fee, daily fee, monthly fee, seasonal fee, yearly fee, retainer fee, success fee, failure fee, full moon fee, or any other fee I can think of.

3.20 In addition, if a person were earning income from being a paid agent and charging and receiving a fee, then that is not Mr Strauss, as I have not paid him income.

…

3.22 Mr Strauss and myself had discussed the costs of representation expenses in 2014 and in early 2015.

3.23 The agreement between myself and Mr Strauss is a general understanding that Mr Strauss would consider argument, speak to me, take instruction, prepare documents, compose, send, respond to and forward emails and attend hearings, in order to represent me and we agreed we would sort out and agree the expenses in the end.

…

3.43 On 12 April 2017, Mr Strauss wrote to me confirming the costs for representation as at that time was as per the itemised schedule of costs and was then $41,307, also he advised the cost of representation was subject to amendment and requested a payment.

3.44 On 8 May 2017, I paid a $5,000.00 instalment to Mr Strauss.

…

3.52 In other words, Mr Strauss would charge me and I would pay Mr Strauss the amount of the final version of itemised schedule of costs and not by way of any fee, such that a lawyer or a paid agent might perhaps charge a client.

…

3.58 In my case, the amount of the final version of the itemised schedule of costs, as of the date of the hearing, including the time in the hearing, is the amount of my costs, is the amount Mr Strauss is to charge me, is the amount I am to pay to Mr Strauss, is the amount of my claim and is the amount the Commission is to order to be paid to me so that I can then pay it to Mr Strauss.

…

3.85.12 Mr Strauss has represented me other than on a legal professional basis.

ll) At the representation hearing on 9 March 2018 I explored with the lawyer seeking to represent Patrick Projects how he was receiving instructions noting that the Respondent has no employees. He explained that he was receiving instructions from the Respondent’s parent company LINX Cargo Care Group. I required the lawyer to confirm the source and authority of his instruction.

mm) Also at the representation hearing on 9 March 2018 I explored with Mr King the arrangement he had with Mr Strauss. He gave the following evidence 29.

Commissioner: Yes, and if in your costs application you are successful in claiming being awarded $160 for that service, am I right that you propose to give that $160 to Mr Strauss?

Mr King: Yes, because we had no - we had no pre-perceived, you know, costs or what it was going to be.  We didn't know if there would be any ability to reimburse Mr Strauss for his time and effort because this is a massive effort and it impacted on his life.

Commissioner: No doubt.  No doubt.

Mr King: So I always said to him if there at any stage I can, sort of, give you some money for your time and your cost, I will.  But we had - I had no idea how that would happen or how much that would be.  It might have been - could have been a dollar or it might have been the 41,000, but I had no idea how we were going to do that, but I always sort of said, "Well, at some point I'll try and pay you for your expenditure for the costs that you're out for it", because he was photocopying, there was paper, it was all this sort of stuff.

Commissioner: Yes, he was performing a service for you?

Mr King: Well, he was helping me out.  He was a workmate.  We sat together hosing down cargo for the Gorgon Project for quarantine.  We were both just wharfies and a lot of people used to come to Chris because they'd say:  "What's this piece of paperwork?"  Stuff about their licence or anything like that.

Commissioner: Yes, that's all right?

Mr King: Because Chris seemed to understand stuff.  We just - I just went to him because I was at a loss.

Commissioner: No, no, it's useful to have someone like that around?

Mr King: I don't understand any of this.

Commissioner: All right.  So when you had this conversation with Mr Strauss in 2014, early 2015, you had a conversation with him about representation; is that right?

Mr King: Yes, I just - we had the discussion about whether he'll - we should get - employ a paid agent or a lawyer or shall we continue and I said, "Well, you're doing it.  You know, if you don't mind doing it, you're doing a good job, I feel comfortable with you."  So - because he seemed to be acting in my best interests and when I paid a paid agent, I didn't have that confidence.

Commissioner: That's all right?

Mr King: So I was happy for Chris to continue and - - -

Commissioner: So the agreement essentially between you was if you're successful, if you receive some money in respect of costs, that money will be provided to Mr Strauss?

Mr King: Yes, essentially, I said:  "Well, if I can get costs, I don't want it, you've done a lot of work."  I didn't know if that would be a dollar or I don't know - I actually don't know what his actual costs are.  I don't know what it costs Chris to do this, whether the costs would cover it or not, and I said:  "Whatever I get, you can have."

Commissioner: That's paying him for the work that he has done for you?

Mr King: I never - I never viewed it as I'm paying him as an employer.  He was mate.  It's like if my mate gives me a lift to the airport, he is not doing it for payment or a fee, he's doing it to help me out to get to the airport.  But when I get there, I know it cost him 20 bucks in fuel.  So I say:  "Mate, there you go, mate, there's 20 bucks to cover your cost."  But he hasn't charged me like a taxi or an employment or as an income.  I know his wear and tear on his car and he's done me a favour, so I flung him some money to cover his fuel costs, not that I had to and this is the same thing.  I know this has taken a lot of time and ink and paper that he's purchased because there's mountains of paperwork and I just thought, well, I'll fling him something if I'm ever in a position.  It's like when you say:  "I'll look after you if I ever win Lotto."  Yes, if I ever get to that position, I can fling him something to help cover his time and his expense and his costs, I will.  But I always thought that I never - I'd never have that opportunity.  And things have changed, and I think there might be an opportunity.

Commissioner: But it was always your understanding that if you got some money out of this in exchange for the work that he did for you, the services that he provided to you, you would make a payment to him?

Mr King: Yes, that was the understanding, but there wasn't - there wasn't like a set fee.  Like, would I have engaged lawyers, there was a set fee.

Commissioner: No, no, no, I understand that.  I mean, but, you know ?

Mr King: You know, costs her hour, per document, and there was none.  There was certainly no agreement for that, you know.  I mean, the costs might have been - - -

Commissioner: Yes, there's no hourly fee?

Mr King: Yes.

Commissioner: But, you know, because he has done all this stuff for you in this itemised account this, hasn't he?

Mr King: Yes, he's done it all.

And then further. 30

Mr King: My position was and my understanding of the Commission is both parties bear their own costs.  That was my understanding.  So my thought all the way through was there will be no way for me to give him any money.  So it was a pie in the sky agreement in a way because I couldn't see how it could be any other way until they conceded and then all of a sudden you're going, "Wow, that might change things", because they conceded after four years of having me incurring these costs, for four years they defended this and then in the last minute without hearing any of the evidence and the witnesses, turned around and said:  "Well, we concede."  Which clearly meanings that they - you wouldn't concede if you thought you had a chance of winning, so they must have conceded because they thought they had no chance of winning which clearly means that they must have known that for four years and they defended this for four years.  So then all of a sudden things changed.  But from the beginning, both parties bear their own costs, so I, in my head, thought there's no way ever I'd be able to give Chris any money.  It's like when I promise - I promise my sister I'd buy her a house when I win Lotto.  It's probably never ever happen if I live to be a hundred.  So it just suddenly changed when they conceded because they had no reasonable prospect of success and they knew that, but they proceeded with the action regardless defending it when they could have settled it on day one and then there will be no costs to either party.  It would have been minimal and we would have beared our own costs.  It was vexatious.

Commissioner: Yes, all right.  Now, in paragraph 3.41 of your witness statement, you say:

On 18 March 2017, Mr Strauss and myself discussed and agreed the amount of costs in representation that Mr Strauss would charge me and that I would pay Mr Strauss would be the same as the Act and the regulations allowed to be claimed

Mr King: Now, that was after - after I'd had success in my unfair dismissal and then that, yes, so we did have a discussion and after we had the success, we thought, well, there's an opportunity because our position was we believe, as I just said, that they had no reasonable grounds for success from the beginning, so that means that the action that they took may bear an opportunity to claim costs.  And so he had no set fee, so, as I said:  "Well, whatever the - if we can go for a costs application and we're successful, if we get a dollar, you can have it, if we get $10,000, you can have it."  There was no amount.  So he could have come out with next to nothing or he could come out with whatever - so that was the agreement.

Commissioner: Then some work is done to prepare the schedule and that gets to $41,307?

Mr King: Yes.

Commissioner: “Then on 12 April, Mr Strauss wrote to me confirming the costs for representation as at the time it was as per the itemised schedule of costs”.  Where's that letter?

Mr King: I'm not sure if it was an email.  I think it was an email.  Mr Strauss, you sent me an email, didn't you?  Or did you or was it a verbal?  I can't - I can't quite remember off the top of my head.

Commissioner: It says here:  "On 12 April 2017, Mr Strauss wrote to me"?

Mr King: Yes, so it must be in one of my emails if that's what I've written.

Commissioner: I require you to produce that document to me?

Mr King: I don't have it on me.

Commissioner: I know you can't do it right - I know you can't do it right now, but within the next week, I require you to forward to me a copy of what was written.

Mr Strauss: What paragraph was that, Commissioner?

Commissioner: 3.43.  It's correspondence said to be dated 12 April 2017.  Then 3.44 on 8 May 2017, it says you paid Mr Strauss $5,000; is that right?

Mr King: Yes, that's correct.

Commissioner: But you haven't been awarded any costs yet?

Mr King: No, I haven't done, but at the time I had some money and he - as of the above paragraph where Mr Strauss had suggested that that 41,307 he believed was the calculation he'd come to and he was - so I said:  "Yep, that's fine."  When he asked for an instalment, I had some money and I thought, well, he's (indistinct), he's out of pocket at this point, so I thought, well, why not, I'll give him some money.

Commissioner: So that's a part-payment for the services that he's given you?

Mr King: Yes, well it was a part-payment for his out of pocket expenses.

Commissioner: It's not an out of pocket…

Mr King: And if he …

Commissioner: There's no out of pocket expense associated with reading a document.  I mean, that's part - that's payment for?

Mr King: Well, up until - up until this date, this is, what, April 2017.  We'd been at this for some time before this.

Commissioner: Yes, but I'm saying in the schedule of costs, there's more things here than just out of pocket expenses.  It's more than just photocopying?

Mr King: Of course, of course, yes, yes.

Commissioner: I mean, there are actual things here - there's stuff here in relation to the time he takes to read stuff, isn't that right?

Mr King: Well, that's right and the only reason we're claiming that is because it's in the schedule.

Commissioner: No, no, no, I understand.  Yes, yes, yes, but ?

Mr King: But we never agreed to that.  I never - we never had an agreement where I'd pay you to read a document.  I always - my understanding was if I can ever do something to help you for the time and effort you put in, but there was never - I never had any vision of - it's taken you 20 minutes to read a document, so I'll have to pay you for that.  It's just - it's only because this is the way the Commission do it.  If I was doing it, I'd be doing it differently, but this is the way the Commission does it.  They say you've got to itemise the items.  So we're just following your document, you know.  I'd be doing it differently because normally we'd be having a beer at, you know, at a pub and we'd say:  "Yeah, mate, what's it cost you to do this for me?  Build me patio?"  I'd fling him some money for it and I'd have another beer.  But, you know, but here you have your schedule, you have your procedures, so we're just following that.  Now, I could do it differently if you wanted me to, but you wouldn't accept it, so that's how we've done it.

Commissioner: No, no, no, that's all right.  I'm just trying to understand that…

Mr King: I'm just trying to - you understand that my understanding of the documents and how it all works is limited and I've just relied on him and so I feel indebted for what he's done for me so…

Commissioner: Yes, yes, and if he gets it …

Mr King: And, as I said, we never thought that it would be we bear our own costs.  We never thought we'd be in this situation, but it changed, they'd conceded.

Commissioner: But you've made a part-payment of 5,000, that's right, isn't it?

Mr King: Yes, yes, I gave him 5,000.

Commissioner: Yes, and if you get zero out of the costs application, he's not going to pay that back to you, is he?

Mr King: Well, you know, I suppose if I was really struggling, he probably would, but I won't ask for it back because, I think, well, it's - I'm not - I'm not hurting financially right now.  I'm getting by.  I've got food on the table, so I think, well, keep it because I'm grateful for where he's taken me.

Mr Strauss then asked Mr King some questions. 31

Mr Strauss: So I just want to clarify.  Have I ever charged you and have you ever paid me an hourly fee?

Mr King: No.

Mr Strauss: A daily fee?

Mr King: No.

Mr Strauss: A monthly fee?

Mr King: No.

Mr Strauss: A fee for reading a document?

Mr King: No.

Mr Strauss: A fee for preparing a submission?

Mr King: No

Mr Strauss: A fee for attending to an email?

Mr King: No.

Mr Strauss: A yearly fee?

Mr King: No.

Mr Strauss: A success fee?

Mr King: No.

Mr Strauss: A failure fee?

Mr King: No.

Mr Strauss: Any type of fee for anything at all?

Mr King: There's been no discussion about any fees.

nn) On 15 March 2018 K&L Gates (the then lawyers for the Respondent), filed an affidavit on behalf of Michael Stutley, Partner, deposing to the authority for their instructions received from the Company Secretary of the Respondent.

oo) Proceedings before me were adjourned pending the hearing and determination of a s.608 matter before his Honour the President, Justice Ross. The matter was reallocated to me on 27 March 2018.

pp) On 29 March 2018 the matter was listed for a further directions hearing.

qq) There then followed a dispute between the parties about Orders to Attend served by the Applicant on directors of the Respondent.

rr) There also followed an application to have the UFD applications of the other Concurrent Applicants consolidated before me. This further put off the matter proceeding before me.

ss) On 8 June 2018 his Honour Vice President Catanzariti dismissed the application to consolidate.³² Consistent with past practice in these matters that decision was appealed. On 28 August 2018 permission to appeal was refused. 33

tt) The representation hearing (that had started on 9 March 2018) then continued on 28 September 2018. At the resumed hearing Mr King continued to contend that Mr Strauss was not a paid agent. Mr Strauss submitted the following: 34

Mr Strauss:  Well, I don't think that's the only thing we rely upon, at all.  I've never invoiced Mr King, well, with an invoice or a tax invoice

Commissioner:  I don't know that that matters.

Mr Strauss: Well, I think it does, sir, because our arrangement, at the start, was that we'd sort it out at the end.  And, under the Act, generally it's given that parties are to bear their own costs.  Now, that only changes, in the relevant sections, as the result of conduct of the other party.  So there was - the arrangement was not - there was no quotation, no agreement, no charge, no fee, no rates, no schedule.  The agreement was that it would just be sorted out at the end.

…

Now, upon the termination of the matter Mr King filed a costs application, which we are now hearing, and that then gave rise to the ability to claim costs and the expenses arising out of the representation and Mr King, I think as he gave evidence, gave me $5000, I think he said words to the effect of, to help me, for what I've done for him, but it was also in the anticipation of a costs order being awarded in the end.  However, the amount is not know.  I still have not given Mr King an invoice or an account or a fee or any schedule of rates from me and he hasn't paid against anything like that.

Now, until - at section 403 and 402, they set up that you can't make - if I understand it correctly, you can't make the costs application until after the determination and then within 14 days.  So up until that point it didn't exist.

Now, our arrangement that we'd sort is out in the end is still applicable, in that as of today there's still no amount finalised and we accept that we go through the representation phase, we then go through the liability phase for the respondent, we then go through the amount phase and upon the amount phase there will be an amount awarded, whether that be - regardless of the amount that is.

Now, the arrangement between Mr King and myself is that he'll pay me, according to the schedule, but that's not a fee according to me charging him or him paying against an account.  The point is, as well, is that if I did invoice Mr King, whether it be for $1 or $1 million, Mr King has the right to claim costs as per the schedule, regardless of any account he has or hasn't received or any - whether it be higher or lower or whatever he may or may not have paid.

Now, the amount that he's paid me, based on that arrangement, is that if there is no award or if the award goes down or if the award goes up, that amount will vary.  So he's entitled to have that money refunded, depending on the result.  Not only that, but the - there is perhaps a situation where, due to rules that apply to, for example, legal representatives, perhaps they issue schedules of rates, costs agreements, which are different from the schedule within the rules.

Also, they may, according to their agreement, they may, for example, invoice a client at the start, for a deposit or a holding fee.  They may seek an advance, they may invoice monthly or two-monthly or they may even have an agreement to invoice at the end, after it's finished.

Now, in this case, there's also nothing in the Act which says when Mr King, or a person under section 403 claiming costs, when they have to be charged or paid or reimbursed, and that can be at the end.  That could be the same as any other business.  You might have your car repaired and pay when you pick it up, after it's done.  Although you might have a quote or an estimate, you might not know the exact amount until you actually get the invoice or the bill or the charge, at the very end, when you pick it up.  Now, Mr King's payment to me is not based on anything that I'm charging him, it's based on his ability to claim costs, as per the schedule.  So I'm not a paid agent at the moment.

uu) Notwithstanding those submissions, on 28 September 2018 I determined that having regard to the plain and ordinary meaning of the words “agent” and “fee”, because of the $5,000 payment made by Mr King to Mr Strauss on 8 May 2017, Mr Strauss was a paid agent. 35 Mr King then made an application to be represented by Mr Strauss. I granted the application36 because I was satisfied that Mr King was unable to represent himself.37 I also granted the Respondent permission to be represented. The Cost Application raising novel issues I was satisfied that the matter was invested with sufficient complexity such that I would be assisted in the efficient conduct of the matter38 if I granted the Respondent permission to be represented.39

vv) Further programming of the matter and requests for adjournments meant that the substantive costs hearing was not listed for hearing until 16 December 2019.

ww) Further programming of the matter and requests for adjournments meant that submissions did not close until 5 March 2020.

Legislation

[11] Section 402 of the FW Act provides that an application for costs under s.611 and s.400A must be made within 14 days after the matter is determined by the Commission. Mr King’s application for costs was made on 31 March 2017 (i.e. 14 days after her Honour Senior Deputy President Drake handed down her decision in 17 March 2017) and, therefore, within the specified time period. Accordingly, s.402 of the FW Act is satisfied.

[12] It is important to remember that under the FW Act the power to award costs is discretionary. It is a two stage process:

a) decide whether there is power to award costs, and

b) if there is power, consider whether the discretion to award costs is appropriate. 40

[13] Section 611 of the FW Act provides 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).”

[14] In order for Patrick Projects’ response (Patrick Projects’ Response) to the UFD Application to be characterised as “vexatious”:

a) the main purpose of it must have been to harass, annoy or embarrass Mr King, 41 or

b) there must have been another purpose for the UFD Application other than the settlement of the issues arising in it. 42

[15] The question of whether an application was made ‘vexatiously’ looks to the motive of the relevant actor (in this case the Respondent). It is an alternative ground to the ground that the Patrick Projects’ Response was made ‘without reasonable cause’. 43

[16] To be satisfied that the Patrick Projects’ Response should be characterised as having been made ‘without reasonable cause’ I must find that:

a) it was ‘so obviously untenable that [it could not] possibly succeed’,

b) it was ‘manifestly groundless’,

c) it was ‘so manifestly faulty that it [did] not admit of argument’,

d) it ‘disclose[d] a case which the [Commission] is satisfied [could not] succeed’, or

e) ‘under no possibility [could] there be a good cause of action’. 44

[17] I may also consider whether, at the time the application was made, there was a ‘substantial prospect of success.’ 45

[18] Because:

an application/response is not without reasonable cause just because the Commission rejects a person’s arguments, 46 and

b) a proceeding is not to be classed as being instituted/responded to without reasonable cause simply because it fails, but rather in circumstances where on the applicant’s/respondent’s own version of the facts, it is clear that the proceeding must fail, 47

it must follow that an unfair dismissal response is not without reasonable cause just because the respondent, at some point, decides to make a concession in the matter.

[19] In summary, a finding that an unfair dismissal application/response has no reasonable prospects of success should be reached with extreme caution and should only be reached when an application is ‘manifestly untenable or groundless’. 48

[20] Section 400A of the FW Act provides 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.”

[21] Therefore s.400A sets out additional circumstances in which the Commission can make costs orders against parties in unfair dismissal matters. The Commission may order costs against a party to an unfair dismissal if the first party caused the second party to incur costs:

a) because of an unreasonable act or omission, or

b) in connection with the conduct or continuation of the matter.

[22] What is unreasonable will depend on the circumstances. 49 It is intended that costs only be ordered where there is clear evidence of unreasonable conduct.50

Pre-hearing Submissions

[23] The submissions in this matter are extensive. I have read and had regard to them all. I do not below repeat the submissions in their entirety. What follows is a summary of the submissions.

Mr King’s submissions

[24] Mr King submits that the Respondents is liable for all costs of the Applicant. He contends that:

a) The Respondent responded to the Applicant’s application, vexatiously and without reasonable cause; and it should have been reasonably apparent to the Respondent that the respondent’s response to the Applicant’s application, had no reason prospects of success.

b) The Respondent caused the Applicant’s costs to be incurred because of unreasonable acts and omissions of the Respondent in connection with the conduct and continuation of this matter.

c) The representative of the Respondent should be held liable for all costs of the Applicant because it encouraged the Respondent in its conduct.

d) The Respondent knew the obligations it owed to the Applicant under the relevant industrial enterprise agreement, a cargo handling operations deed, the Little Red Book, the Modern Award, and the relevant employee handbook.

e) The Respondent did not disclose all the terms of Mr King’s contract of employment.

f) The Respondent avoided resolving disputes in the Fair Work Commission in advance of the termination of Mr King’s employment.

g) The Respondent new or ought to have known that it:

i. agreed to the industrial instruments that govern the employment,

ii. had obligations under the industrial instruments of government employment,

iii. sometimes followed its obligations and arbitrarily sometimes did not,

iv. it unfairly dismissed the Applicant,

v. it was responding to the Applicant’s application, vexatiously and without reasonable cause,

vi. it had no chance of success, and

vii. it would cause the Applicant’s costs to be incurred because of its unreasonable acts and omissions in connection with the conduct and continuation of the matter.

h) The Respondent’s representative knew or ought to have known the same.

i) The Applicant had workplace rights under the FW Act,

j) The Respondent knowingly or recklessly made false or misleading representations under s.345 of the FW Act,

k) The Applicant raised disputes during the employment.

l) Mr King gave evidence that he was not issued with the Little Red Book while employed,

m) The Respondent did not produce documents when ordered to do so by the Full Bench or by individual Members of the Commission.

n) The Respondent misrepresented the Little Red Book and the Employee Induction Handbook,

o) The Respondent misrepresented invoices for printing the Little Red Book,

p) the Respondent misrepresented the Applicant’s workplace rights in the Federal Court of Australia,

q) the Respondent claimed that the Applicant had no chance of success.

[25] Mr King then provided what he described as a “Summary of Undisputed”. He also submitted a Table of Conduct of the Respondent and its Representative.

[26] Essentially, the Applicant contends that, because the Respondent made a concession in relation to the unfairness of the dismissal on 25 November 2016, it necessarily follows that everything they did in the proceedings was done vexatiously, without reasonable cause and in the knowledge that they had no reasonable prospects of success. All of what they did in the proceeding is considered by the Applicant to be an unreasonable act or omission because the Respondent ultimately conceded that the dismissal was unfair.

Patrick Projects’ Submissions

[27] Patrick Projects submitted that in circumstances where the general rule is that a person must bear their own costs in relation to a matter before the Commission it is necessary to determine what Mr King’s actual claimable costs are in bringing his unfair dismissal application. The Respondent observed that prior to me determining that Mr Strauss was a paid agent, Mr King was ultimately self-represented and assisted by a lay advocate during the substantive unfair dismissal proceedings. The Respondent further observed that Mr Strauss never sought nor had he ever been granted permission to appear on behalf Mr King throughout the history of the matter. Patrick Projects contend that this is relevant to the question of liability for costs because the Respondent was never put on notice that Mr Strauss was acting in a capacity as a paid agent to which costs being incurred by Mr King in the preparation of this case.

[28] Patrick Projects contend that pursuant to authority such as Cachia v Hanes 51 Mr King is limited to out-of-pocket expenses connected with the conduct of the proceedings and not the costs which would ordinarily be incurred by a professional paid agent in the preparation and conduct of the proceedings.

[29] The Respondent submitted that,

“2.6 Until 8 August 2016 the Concurrent Applicants and each of their cases together as a group. Accordingly, prior to the hearing, the Concurrent Applicants filed some six volumes of documents, purportedly relating to each of the individual cases. It was alleged that some of this material applied to individual Concurrent Applicants and that some of that apply to all of them together. No witness statements or affidavits were filed which delineated the issues in dispute or set out with any clarity the case that Mr King was going to advance during the hearing.”

[30] The Respondent then described what it says occurred before her Honour Senior Deputy President Drake on 24 and 25 November 2016. It contended that “it was only during the course of Mr King’s oral evidence that Mr King’ experiences during his employment were fully ventilated.” Patrick Projects contends that it conceded liability in relation to the unfair dismissal at the earliest opportunity.

[31] In addition, the Respondent set out the attempts it made to settle the UFD Application in advance of the hearing. The lowest offer made by Mr King was $300,000. The Respondent says it was,

“2.15 the driving force in seeking to resolve the matters in dispute between the parties. However, despite the Respondent’s reasonable endeavours, it offers were rejected and countered with a plainly unreasonable offer which was $48,235,345 apart from Mr King’s final compensation amount of $64,655 awarded by Drake SDP and affirmed on appeal by the Full Bench of the Commission.”

[32] After setting out the legislative background to the Commission’s discretionary costs the Respondent contended that,

a) Other than make bare assertions that Mr King had not filed any materials that identified the unreasonable acts or omissions of Patrick Projects or their representative or the basis upon which it ought reasonably have been apparent to Patrick Projects that the defence of the UFD Application had no reasonable prospects of success.

b) The resolution of the UFD Application was not one that was based purely on findings of fact, but would necessarily require the assessment of competing evidence of witnesses.

c) Making the concession that it made before Drake SDP was reasonable in the circumstances and saved the parties and the Commission considerable time and expense in pursuing the issue of liability for the UFD Application.

Mr King’s reply submissions

[33] In reply Mr King submitted that the question of “what are Mr King’s actual claimable costs?” Is a matter for the quantum phase and not relevant to the question of liability for costs. He then canvassed the exceptions to the general rule that a person must bear their own costs in proceedings before the Commission. In particular the Applicant drew the Commission’s attention to the operation of s.403(1) of the FW Act and the fact that representation involves more than just advocacy before the Commission. Mr King noted that he was represented professionally before being assisted by Mr Strauss and, consequently, was not always self-represented. He observed that the Commission never required Mr Strauss to seek permission to represent him (before I did in September 2018).

[34] Mr King contended that it was not necessary that Patrick Projects be put on notice that Mr Strauss was acting in a capacity of the paid agent to which costs were being incurred by Mr King in preparation of the case. He also contended that Cachia v Hanes 52 was of no assistance to the Commission.

[35] In responding to the Respondent’s “Context of Proceedings” Mr King indicated that was incorrect and that his dismissal was because of continued non-attendance at work or a failure to follow a lawful and reasonable direction to return to work. He set out the circumstances which he said indicated that the Respondent had not provided him with a safe workplace.

[36] Mr King denied that because the cases of the six Concurrent Applicants were being heard together it was not possible to delineate issues in individual cases. He noted that he had separately filed his original UFD Application and witness statement through his previous representative and had filed a supplementary statement on 16 February 2015. Mr King says his experiences were extensively and repeatedly ventilated in the correspondence before the Respondent terminated his employment and in two proceedings before the Commission prior to the UFD Application. In this context the Applicant denied that the Respondent conceded at the earliest available opportunity.

[37] The Applicant also took issue with the Respondent’s version of attempts to settle the UFD Application. However, it was conceded that on 7 October 2016 the Respondent sent Mr King a without prejudice offer (save as to costs) in the amount of $38,000.

[38] Mr King then listed what he considers to be the unreasonable acts of the Respondent (and which predate the UFD Application) and its representative and why. He contends that the Respondent responded vexatiously and without reasonable cause.

Patrick Projects’ Submissions

[39] On 2 August 2019 parties attended a hearing before me in respect of the Costs Application. During the course of that hearing I raised queries with the Respondent about its contention that Mr King’s case was not known to it until he gave oral evidence before her Honour Senior Deputy President Drake.

[40] In response Patrick Projects submitted:

a) a table of Mr King’s written statement references to Ms Marion Storey’s conduct as contrasted against the oral evidence given by Mr King in respect of the story;

b) a table of the relevant annexes from Mr King’s evidence of volumes A-I and the transcript references in which evidence is given in respect of those annexes; and

c) a table of the relevant source documents filed on behalf of Mr King and where those documents are able to be identified in the transcript of the proceedings on 24 and 25 November 2016.

[41] Patrick Projects then set out the circumstances where it says led to the concession it made before her Honour Senior Deputy President Drake. It contended that,

“2.1 … the central issue was the evidence given by Mr King as to Miss Storey’s conduct during Mr King’s employment and, most notably, leading up to and including his dismissal.

…

2.3 … Table A demonstrates that it was during Mr King’s oral evidence, as opposed to his written statements, that the issues in respect of Ms Storey’s conduct became clear. Whilst the Respondent was in possession of the diary notes referred to in the transcript, Table A makes plain that there is a wider narrative which sat with each of these diary notes. Further, as is detailed below the significance of the diary notes and their contents is not referred to or relied on in any of Mr King’s written statements filed in the lead up to trial.”

…

2.6 It should be noted that the limited references to Ms Storey in the written statements filed by Mr King in the lead up to trial form part of the forensic decision by the Respondent not to call Ms Storey as a witness. Why? Because her conduct towards Mr King (on his oral evidence) during his employment in the lead up to his dismissal were not previously notified to the Respondent by Mr King in his written materials.

2.7 The Senior Deputy Pres recommended that a conference be held after oral evidence had been given as to the exchanges between Mr King and Ms Storey had been detailed by Mr King on the stand.”

[42] Patrick Projects also complained that:

a) The two witness statements filed during the lead up to the hearings did not reference any diary notes (additionally, the statements did not cross-reference or seek to rely on the contents of the Evidence Volumes, safer correspondence exchange between Mr King, his previous representative and the respondent); and

b) neither witness statements or to utilise the contents of the events are summarised in those diary notes as forming the Gavin of Mr King’s claim for unfair dismissal; and,

c) neither Mr King’s witness statement filed during the proceedings were tendered during the proceedings. Further, neither statement was read into evidence as part of Mr King’s evidence in chief during 24 and 25 November 2016 hearing.

Mr King’s Reply to the Respondent’s Claim of Surprise

[43] Mr King denied that the Respondent was caught by surprise by his evidence. He noted that “[it] is not unusual for a witness to expand on written statements.” Further, he contended that:

a) The Respondent was put on notice by the Senior Deputy President about the risk of not calling Ms Storey.

b) The focus on Ms Storey ought to have been anticipated in the proceedings.

c) The employment dispute was one that was clearly obvious.

d) The Respondent ought to have been aware of the evidence in the matter, nothing should be regarded as a surprise.

e) Nothing new arose in the oral evidence.

Post-hearing Submissions

Patrick Projects’ Submissions

[44] Patrick Projects submitted that,

“6. The fact that the Applicant gave his evidence in chief orally meant that details and nuances emerged during the hearing they were not addressed in his written statement. More importantly, there is no contest between the parties that the giving of evidence orally also disclosed the raw emotional impact on the Applicant of the circumstances that led to the termination of his employment. A review of the transcript does not adequately capture the probable emotional impact of the proceedings had on the applicant; a matter which is accepted by the applicant in his reply submissions. Emotional nature of that evidence was an integral aspect of the hearing that obviously lead the SDP Drake to seek to further conciliate the matter during the hearing and recommending to the Respondent that he can see the issue of whether the termination was harsh unjust or unreasonable.

7. … It is important to recognise that the “concession” arose following the intervention of the SDP Trade having regard to the dynamic of the hearing. It is fallacious to examine the so-called open quotes concession” stripped from this critical context.”

[45] The Respondent then contended that:

a) the Applicant had not “incurred” any costs and consequently, the jurisdiction of the Commission is not enlivened by ss.400A, 401 and 611 of the FW Act.

b) there is no evidence of any unreasonable act or lack of reasonable cause.

c) an assessment of the case at the time the Form F3 was filed is the appropriate time to assess the Respondent’s conduct. It noted that at all times Mr King sought both reinstatement and compensation.

[46] Patrick Projects noted that,

“37. In the present case, the Respondent succeeded in resisting the remedy of reinstatement sought by the Applicant, including on appeal. Accordingly, it cannot be said that the response was a meritorious or without reasonable prospects or reasonable cause. Why? Because the Respondent was successful in resisting an order for reinstatement and was successful in resisting the appeal lodged by Mr King in respect of the [Drake Remedy Decision] ordering compensation in lieu of reinstatement.”

[47] In making submissions about the Commission’s intervention on 25 November 2016 the Respondent contended that “it is evident from the transcript that the “concession” was a recommendation which the Respondent accepted with both an expeditious and expedient measure to progress proceedings which had been considerably protracted and still had considerable milestones to traverse.”

Mr King’s submissions

[48] In his post-hearing submissions the Applicant, line by line, took issue with the submissions made by the Respondent. Mr King also refiled the Table of Conduct of the Respondent and the Representative, comprising some 29 pages of alleged unreasonable conduct between 2014 and 2018.

Patrick Projects’ Submissions

[49] In its reply Patrick Projects contended that the Applicant’s submissions were merely argumentative and did not engage with the fact that the Respondent has contended that the Applicant has not incurred any costs. The Respondent referred to and repeated its submissions. It contended that there was no enforceable agreement between Mr King and Mr Strauss that gives rise to a liability for costs.

Mr King’s reply submissions

[50] Mr King, in answer to the issue about whether costs had been incurred, he contended that,

“35 The Applicant may not have had a predetermined arrangement before the proceedings commenced, but work done in representation created obligation/liability to pay for that work.

36 The Applicant had an agreement to agree, to sort it out at the end, which is when the grounds for a cost application emerged further, the quantum being as prescribed in the schedule 3.1.

37 It would not be unexpected if a lay advocate was simultaneously a layperson unfamiliar with the processes of the Commission.”

[51] The Applicant contended that the Respondent’s and its representative’s submissions deviate from the act in focusing on the meaning of the word “incurred”.

Consideration - Have costs been incurred?

[52] Having particular regard to s.400A of the FW Act, I accept the argument of the Respondent that in order for the Commission to have jurisdiction in relation to the discretion whether to make an order for costs against a party, costs must have been “incurred”. It is a jurisdictional fact. “Incurred” is the past tense of the verb “incur”. Applying its ordinary meaning it is necessary that a person becomes “liable or subject to [something] through one's own action’. 53

[53] That does not mean that, in order for the Commission to be satisfied that it has jurisdiction, in relation to the matter:

a) Mr Strauss must have rendered an account or invoice to Mr King; nor that

b) Mr King had paid a bill or account rendered by Mr Strauss.

[54] But in order for Mr King to have incurred costs he must have some liability to Mr Strauss to pay for the work that Mr Strauss has done. There must be an obligation on Mr King to pay Mr Strauss if Mr Strauss ever demands payment. There must be an agreement between them that gives rise to that liability or obligation. That agreement between them must have all of the usual requirements of a contract enforceable at law. However, an enquiry into the nature of the agreement between Mr King and Mr Strauss demonstrates that their agreement lacks the basic elements of enforceable agreement.

[55] It is said by Mr King that at some point in late 2014 early 2015 he started to be assisted by Mr Strauss and I agreed that they would sort out and agree the expenses at the end. That is the sum total of the evidence of the terms of the agreement as between Mr King and Mr Strauss. That agreement is uncertain in many material respects. There is no evidence about its terms. It could be said that it is vague and ambiguous but certainly it is incomplete. The Applicant’s submissions described it best as “an agreement to agree”. 54 Agreements of this nature have long been held not to be enforceable.55

[56] If, contrary to the submission of the Applicant, there was something more than an agreement to agree there is no evidence about what consideration past between the parties. The letter sent by Mr Strauss to Mr King in April 2017 has all the hallmarks of evidencing past consideration. It is a promise by Mr King to Mr Strauss in exchange for the services that Mr Strauss has already provided to Mr King in the previous years. Past consideration is not good consideration. 56 It was clearly an attempt to retrofit matters to give rise to a claim for costs. The convenient nature of it is immediately transparent.

[57] Next it is necessary to consider whether in late 2014/early 2015 there was as between Mr King and Mr Strauss an intention to create legal relations. The determination of the same requires an objective approach to the question. The best evidence of the objective intention of Messrs King and Strauss, is the evidence of Mr King. In addition to his evidence that they had agreed to “sort out and agree the expenses at the end”, Mr King described the arrangement as “a general understanding”. At the time they entered into the agreement Mr King said they “had not preconceived, you know, costs or what it was going to be.” He said that “at some point [he would] try and pay [Mr Strauss) for [his] expenditure”. There is no mention of paying Mr Strauss for the time he expended on Mr King’s matter. He describes Mr Strauss as someone who was helping him out. “He was a workmate”. Tellingly Mr King likened the arrangement with flinging some money to cover the costs of fuel for a mate who had driven him to the airport. He further likened the arrangement as saying to someone “I’ll look after you if I ever win Lotto.” None of those arrangements suggests an intention to create legal relations such that Mr King would ever have any liability or obligation to pay Mr Strauss for the work that he performed.

[58] Mr Strauss intervened in the dispute between Mr King and Patrick Projects voluntarily to help out a mate. In that context it might be said, having regard to the time and energy that Mr Strauss has spent on Mr King’s matter, that it gives rise to some moral obligation on behalf of Mr King to pay Mr Strauss but I cannot see how Mr King would have a contractual obligation to do so. 57 In those circumstances he has not incurred any costs (associated with the conduct of Mr Strauss).

[59] For these reasons I am not satisfied that the jurisdiction of the Commission is enlivened in relation to s.400A and, therefore, consequently, s.401 of the FW Act. Absent jurisdiction, the application for costs that is founded on s.400A must be dismissed.

Consideration – s.611

Was Patrick Projects’ Response made vexatiously (s.611(2)(a))?

[60] In assessing whether Patrick Projects responded vexatiously I must assess their response as at the time it was filed. In this respect Mr King’s Application for Costs has been misconceived because his essential argument is that, because the Respondent ultimately conceded the unfairness of the dismissal it must necessarily follow that they filed their response vexatiously. That is not the case.

[61] There is no evidence that Patrick Projects was motivated to harass, annoy or embarrass Mr King. It is apparent from the materials on the file that at the time it filed its response Patrick Projects did not believe that they had unfairly dismissed Mr King. They genuinely wanted to defeat his application which sought reinstatement.

[62] Nothing in the evidence before the Commission demonstrates that Patrick Projects was motivated by the intention of engaging with the Commission in a manner that was vexatious with the intent to harass or embarrass Mr King or to gain a collateral advantage.

[63] There is nothing in the evidence before me that would enable me to make a finding that Patrick Projects had any other motive in responding to the UFD Application other than to establish that the dismissal was not unfair. On that basis I do not find Patrick Projects made a vexatious response.

[64] The Commission, as presently constituted, is not satisfied the Patricks Projects’ response was made vexatiously.

Was Patrick Projects’ Response made without reasonable cause (s.611(2)(a))?

[65] Again in considering whether Patrick Projects pursued its response ‘without proper cause’ or ‘reasonable cause’ an assessment needs to be made as to whether the Patrick Projects’ Response had no reasonable prospects of success, and if done objectively, that fact should have been reasonably apparent to Patrick Projects.

[66] For the reasons below, the Commission, as presently constituted, is not satisfied the Patrick Projects’ Response was made without reasonable cause.

Should it have been reasonably apparent to Patrick Projects that that the Patrick Projects’ Response had no reasonable prospect of success (s.611(2)(b))?

[67] There is no evidence before me that would enable me to make a finding that Patrick Projects was aware, or should have been aware that the Patrick Projects’ Response would not succeed at the time of lodging the Form F3 in 2014.

[68] Further, it must be recognised that ultimately Patrick Projects were successful in defeating the reinstatement remedy both at first instance and on appeal.

[69] It cannot be said that that the time the Form F3 was filed, Patrick Projects’ defence to the entirety of claim and remedy sought was one that:

a) was ‘so obviously untenable that it could not possibly succeed’,

b) was ‘manifestly groundless’,

c) was ‘so manifestly faulty that it [did] not admit of argument’,

d) it ‘disclose[d] a case which the [Commission] is satisfied [could not] succeed’, or

e) ‘under no possibility [could] there be a good cause of action’.

[70] Because the unfairness aspect of the UFD Application (but not the remedy aspect) was ultimately conceded by Patrick Projects it does not follow that the Patrick Projects’ Response had no reasonable prospect of success.

[71] The Commission, as presently constituted, is not satisfied that it should it have been reasonably apparent to Patrick Projects that that the Patrick Projects’ Response had no reasonable prospect of success.

Consideration – s.400A

[72] If I am wrong about the question of whether costs were incurred by Mr King, for completeness, I should deal with s.400A.

[73] As we know in this matter Patrick Projects did not make its concession in the unfair dismissal case until 25 November 2016 (i.e. after Mr King started to give evidence on 24 November 2016). On 15 July 2018 Patrick Projects contended that,

“2.12 It was only during the course of Mr King's oral evidence that Mr King's experiences during his employment were fully ventilated. 58 Moreover, it was only during the course of oral evidence that Drake SDP intimated that there may be utility in holding a conciliation to deal with the issue of whether the termination of Mr King's employment was harsh, unjust or unreasonable.59

2.13 Accordingly, on 25 November 2016 following that conference which was presided over by Drake SDP, Patrick Projects conceded that the dismissal was harsh, unjust or unreasonable in the circumstances at the earliest available opportunity on that same day. 60”

[74] Having carefully read the transcript of 24 November 2016 and the witness statements of Mr King filed, but not tendered, I conclude that Patrick Projects were not on notice about the extent of the evidence that Mr King ultimately came to give.

[75] The tables provided by Patrick Projects on 30 August 2019 are instructive about how different the case turned about before Senior Deputy President Drake in comparison to the case set out in the witness statements filed in advance of the hearing. The fact that the diary notes and other documents appear in a “document dump” by the Applicant in advance of the hearing does not assist him. The evidence fell from his lips differently at the hearing. That is not unusual, but that does not mean that the Respondent in this case should be criticised for responding to that different case by making the concession it made.

[76] The act of making the concession on the second morning of hearing Mr King’s evidence, following a recommendation from the Senior Deputy President, was anything, but unreasonable behaviour. It was the rational behaviour of a litigant, reasonably made.

[77] For these reasons I am not satisfied that Patrick Projects acted unreasonably in not making earlier the concession it made on 25 November 2016. There was no “unreasonable act or omission of [Patrick Projects] in connection with the conduct or continuation of [its defence up until 25 November 2016]”. Section 400A is not enlivened in this matter.

[78] Consideration – s.401

[79] Because I have found against the Applicant in respect of all aspects of his application for costs the circumstances that give rise to considering the application of s.401 of the FW Act do not arise. There is no jurisdiction in the matter to award costs against Patrick Projects’ lawyers.

Conclusion

[80] All of the authorities on costs in the Commission make clear the need to be cautious when considering awarding costs. Fundamentally, the Commission is a costs free jurisdiction. There are good public policy reasons for it to be so. The FW Act then sets up a regime that allows for a departure from the prima facie assumption that a party will bear its own costs. But none of those matters arise presently.

[81] For the reasons set out above the Commission, as presently constituted, is not satisfied that Patrick Projects’ Response was made vexatiously or without reasonable cause. Nor is the Commission, as presently constituted, satisfied that it should have been reasonably apparent to Patrick Projects that the Patrick Projects’ Response had no reasonable prospect of success. Therefore, the Commission has no jurisdiction pursuant to s.611 of the FW Act to order costs.

[82] In all the circumstances of this matter the Commission, as presently constituted, is also not satisfied that it was unreasonable for Patrick Projects to defend the matter up to the point when it made the concession that it made on recommendation from her Honour Senior Deputy President Drake.

[83] Further, the Commission, as presently constituted, is not persuaded that s.400A of the FW Act is enlivened and therefore the Commission has no jurisdiction to order costs pursuant to s.400A of the FW Act.

The exercise of the discretion

[84] It is settled that even in the Commission finds a basis to award costs it does not necessarily follow that costs will be awarded. This is because the costs provisions in the FW Act clearly invest the Commission with a discretion to do so. Each of the relevant sections of the FW Act state that the “Commission may” award costs.

[85] Having determined that the Commission does not have jurisdiction to order costs in this matter it is not necessary for me to say anything further about the exercise of the discretion.

[86] However, for completeness I have decided to do so.

[87] In this matter even if the jurisdiction to order costs pursuant of s.611 or 400A was enlivened, I would have declined to order costs in this case as a matter of discretion. This is because, I consider it against the public interest to impose a financial penalty (in the form of a costs order) on a party (in this case the Respondent) when it accepts a recommendation made by the Commission (at that point constituted by her Honour Senior Deputy President Drake). It would have a chilling effect on settlement discussions if that is what could occur. Patrick Projects at the instigation of her Honour Senior Deputy President Drake made the concession. By doing so it saved the Commission and the parties addition cost, time and inconvenience. For these reasons I would not exercise my discretion in favour of awarding costs to the Applicant.

[88] For the reasons given, the Applicant’s Application for Costs, made pursuant to s.400A; s.401; s.611(2)(a) and s.611(2)(b) of the FW Act, is dismissed.

[89] An Order [PR719673] to that effect will be issued with this Decision.

COMMISSIONER

Appearances:

Mr D Garnsworthy of counsel instructed by Mr C Strauss, for the Applicant.
Mr Y Shariff of counsel instructed by Mr J Parkinson, Senior Associate, Kingston Reid, for the Respondent.

Hearing details:

2019.
16 December.
Perth.

Final submissions

Applicant, 2 March 2020.
Respondent, 5 March 2020.

Printed by authority of the Commonwealth Government Printer

<PR719672>

 1 s.661(1) Fair Work Act 2009 (Cth) (“FW Act”).

 2   Ibid s.661(2)(a).

 3   Ibid s.661(2)(b).

 4 Ibid s.400A(1).

 5   PR588080.

 6   [2017] FWC 1583.

 7   Transcript PN446.

 8 [2013] FCA 291.

 9   Transcript, 28 September 2018.

 10   [2015] FWC 1221.

 11   [2015] FWCFB 2679.

 12   [2016] FWC 4189.

 13   [2016] FWCFB 5069.

 14   Transcript, 24 November 2016, PN4446.

 15   Transcript, 24 November 2016, PN4471.

 16   Transcript, 24 November 2016, PN5517.

 17   Transcript, 24 November 2016, PN4542.

 18   Transcript, 24 November 2016, PN4546.

 19   Transcript, 25 November 2016, PN5632.

 20   Transcript, 25 November 2016, PN5768.

 21   Transcript, 25 November 2016, PN5773.

 22   Transcript, 25 November 2016, PN5802 – 5803.

 23   Transcript, 25 November 2016, PN5871.

 24   Transcript, 25 November 2016, PN5882.

 25   PR588080.

 26   [2017] FWC 1583.

 27   [2017] FWC 1583, para [58].

 28   [2017] FWCFB 2809.

 29   Transcript PN144 – 156.

 30   Transcript PN170 - 194

 31   Transcript PN210 - 219

32 [2018] FWC 3406.

 33   [2018] FWCFB 5560.

 34   Transcript PN 402 – 415.

 35   Transcript PN446

 36   Transcript PN453

 37   s.596(2)(b)

 38   s.596(2)(a)

 39   Transcript PN553

 40   McKenzie v Meran Rise Pty Ltd (AIRCFB, Giudice J, Watson SDP, Whelan C, 7 April 2000) Print S4692 [7].

 41   Nilsen v Loyal Orange Trust (1997) 76 IR 180, 181; citing Attorney-General v Wentworth (1988) 14 NSWLR 481, 491; cited in Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16 [7].

 42   Ibid.

 43   Church v Eastern Health (2014) 240 IR 377 [29].

 44   General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, 129; cited in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370 [17].

 45   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257; cited in Dryden v Bethanie Group Inc [2013] FWC 224 (Williams C, 11 January 2013) [20].

 46   R v Moore; Ex Parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470, 473; cited in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (2011) 210 IR 370 [20].

 47   Zornada v St John Ambulance Australia (Western Australia) Inc. (2013) 237 IR 48 [35].

 48   Baker v Salver Resources Pty Ltd [2012] FWAFB 4014 (Watson SDP, Drake SDP, Harrison C, 27 June 2011) [10]; citing Deane v Paper Australia Pty Ltd (AIRCFB, Giudice J, Williams SDP, Simmonds C, 6 June 2003) PR932454 [7].

 49   Explanatory Memorandum, Fair Work Amendment Bill 2012, 37 [171].

 50   Explanatory Memorandum, Fair Work Amendment Bill 2012, 37 [171].

 51 (1994) 179 CLR 403.

 52   Ibid.

 53   Macquarie Dictionary Publishers, 2020.

 54   Applicant’s Submissions, 2 March 2020, para 36.

 55   Walford v Miles [1992] 2 AC 128.

 56   Roscorla v Thomas (1842) 3 QB 234.

 57   Harrington v Taylor 36 SE 2d 227 (1945).

 58   Transcript from 24 November 2016 at PN4254 – PN5514; Transcript from 25 November 2016 at PN5557-5771.

 59   Transcript from 25 November 2016 at PN5773-PN5775.

 60   Transcript from 25 November 2016 at PN5882.