Darcy v Megan Fitzgerald & Associates Pty Ltd

[2009] FWA 1547

[2009] FWA 1547

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

Darcy
v
Megan Fitzgerald & Associates Pty Ltd
(C2009/10404)

COMMISSIONER WHELAN MELBOURNE, 8 DECEMBER 2009

Application for costs.

[1] This is an application for costs made on behalf of Megan Fitzgerald & Associates Pty Ltd, the respondent to an application made under section 365 by Ms Darcy.

[2] The application under section 365 was made on 3 September 2009. The application was brought on the grounds of an alleged contravention of ‘Division 9 of the Health and Safety Act’. The Applicant stated that her employment was terminated because she raised a concern with her employer about a breach of health and safety.

[3] The matter was listed for conference on 23 September 2009 and later adjourned to 12 October 2009. On 15 and 17 September 2009 the Respondent’s solicitors wrote to Ms Darcy outlining their opposition to the claim and inviting the Applicant to withdraw it. They notified the Applicant that in the event that the application was not withdrawn they would seek an order for costs against the applicant.

[4] The result of the conference was that the matter did not settle and a certificate was issued to that effect. The parties were also advised, in accordance with the provisions of section 370, by Fair Work Australia that taking into account all the materials before it that a general protections court application in relation to the dispute would not have a reasonable prospect of success.

[5] On 30 October 2009 the Respondent’s solicitors lodged an application for costs. In order to avoid further costs to either party I determined to deal with the matter by way of written submissions.

Submissions

[6] The solicitors for Megan Fitzgerald and Associates Pty Ltd sought to rely on their correspondence to Ms Darcy of 15 and 17 September. They submit that Ms Darcy’s claim was always going to fail as she could never establish that she had a genuine, real or realistic risk to her health and safety and even if she did have a genuine, real or realistic concern the respondent had acted reasonably in response to the concerns which had been raised.

[7] The respondent did not terminate Ms Darcy’s employment for raising health and safety concerns as alleged but rather accepted the Applicant’s repudiation of her contract of employment when she abandoned her employment.

[8] The Applicant was on notice that in the event the application was not withdrawn, the Respondent would seek an order for costs against her.

[9] Ms Darcy in response submitted that prior to making an application to Fair Work Australia she consulted Jobwatch and was advised that the termination of her employment was in breach of Division 9 of the Health and Safety Act. She further sought advice from the St Kilda Community Legal Service Co-op Limited and was assured that her application had merit and that ‘abandonment of employment’ only occurred where an employee does not attend work or contact his/her employer for three or more days.

[10] Ms Darcy also stated that she assumed that as the application was accepted and listed for a conference it was considered to be valid by Fair Work Australia. She was also told by Jobwatch that the conference was an opportunity to resolve the dispute and that lawyers sometimes bluff in an attempt to deter the other party from continuing their application.

[11] She was further told that as it was a conference each party was responsible for their own costs and it was only if the matter went to the Federal Court that she might be liable for the other side’s costs.

[12] Ms Darcy made further submissions on the merit of her case and the actions taken by her employer.

[13] Ms Darcy also submitted that she was unable to pay the costs claimed by the Respondent as she was not working and had medical certificates saying that she was unable to work before 23 December 2009 due to anxiety, exhaustion and stress.

Conclusions

[14] This application is made under section 377 of the Fair Work Act 2009. The power of Fair Work Australia to award costs against a party in relation to a matter before Fair Work Australia is contained in section 611.

611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA 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: FWA can also order costs under sections 376, 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).

[15] While the solicitors for Megan Fitzgerald & Associates did not specifically address that section I have taken it that the claim for costs is brought both on the basis that the application was made vexatiously and without reasonable cause and on the grounds that it should have been reasonably apparent to Ms Darcy that her application had no reasonable prospect of success.

[16] Ms Darcy’s claim was made under section 365 on the grounds that she had suffered adverse action, namely termination of her employment, because she had exercised a workplace right. In particular Ms Darcy claimed that she was dismissed from her employment ‘in breach of Division 9 of the Health and Safety Act’.

[17] I assume that this is a reference to section 76 of the Occupational Health and Safety Act (Vic) 2004 the relevant parts of which read:

76 Prohibition of discrimination

(1) This section applies to–

(a) an employer who dismisses an employee, injures an employee in the employment of the employer or alters the position of an employee to the employee’s detriment; . . .

(2) The employer or prospective employer is guilty of an indictable offence if the employer or prospective employer engaged in that conduct because the employee or prospective employee . . .

(d) raises or has raised an issue or concern about health or safety to the employer . . .

[18] I am satisfied that the Occupational Health and Safety Act (Vic) 2004 is a workplace law as defined in section 12 of the Fair Work Act and that a ‘workplace right’ within the meaning of section 341 of the Fair Work Act includes a right which might derive from the Occupational Health and Safety Act (Vic) 2004. Ms Darcy therefore contended that the Occupational Health and Safety Act (Vic) 2004 provided her with the right to raise an issue or concern about health or safety and that to dismiss her because she raised such an issue was unlawful.

[19] I do not consider it necessary to go into the details of the matter. It is sufficient to say that on the material before me I am not satisfied that the Respondent’s decision to terminate the Applicant’s employment was caused by her raising a health and safety issue, but rather by her refusal to attend work after being provided with reasonable assurances from sources external to the employer that there was no risk to her health or safety because, according to her own statement, she did not trust her employer.

[20] Section 611(2) provides essentially three grounds on which costs may be granted against an applicant although the case law would suggest that there is significant overlap in relation to two of these.

[21] The first ground is that the application was made ‘vexatiously’. The meaning of this expression in the context of an application for costs under section 347 of the Workplace Relations Act 1996 was discussed by North J in Nilsen v Loyal Orange Trust:

The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage: see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491. 1

[22] There is nothing to suggest that Ms Darcy has any ulterior motive in lodging the claim under section 365.

[23] Section 611(2)(a) also refers to the claim being brought ‘without reasonable cause’. A party cannot be said to have commenced a proceeding ‘without reasonable cause’ simply because the argument proves to be unsuccessful. 2

[24] In considering the meaning of the term in Kanan v Australian Postal and Telecommunications Union 3 Wilcox CJ said:

It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 4

[25] His Honour’s approach was adopted by a Full Bench of the Industrial Relations Commission in Henderson v Mainpoint Enterprises Australia Pty Ltd 5 with respect to applications for costs under section 170CJ of the Workplace Relations Act 1996. It was further considered by a Full Bench in Stagno v Frews Wholesale Meats6which placed emphasis on the test being one of not what should have been apparent to the applicant but what was the applicant’s own view of the facts at the relevant time.

[26] Section 611(2)(b) deals with what should have been reasonably apparent to the person, the test being, should it have been reasonably apparent that the application had no reasonable prospect of success?

[27] We are dealing in this case with new legislation the parameters of which have not been tested by the Courts. The Applicant did seek legal advice and while she made the application without legal representation she did so only after receiving advice from two sources.

[28] In my view, great care should be exercised in coming to a conclusion that a party either instituted proceedings ‘without reasonable cause’ or in circumstances where it should have been reasonably apparent that the application had ‘no reasonable prospect of success’ where the facts of the case and the applicable law have not been tested in a hearing.

[29] In this case the only proceedings which occurred were constituted by a private conference in which the Applicant was unrepresented. Neither the evidence nor the applicable law could be fully tested. When she instituted the proceedings the Applicant did so based on legal advice given to her on her version of the facts. She was entitled to rely on that advice.

[30] I am not satisfied that the application was instituted vexatiously or without reasonable cause and nor am I satisfied that it should have been reasonably apparent to the Applicant that her application had no reasonable prospect of success.

[31] For these reasons the application for costs is dismissed.

COMMISSIONER

 1   Nilsen v Royal Orange Trust (1997) IRCA 267.

 2   See Gibbs J in R v Moore; Ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 at 473.

 3   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 157.

 4   (1992) 43 IR at 264-265.

 5   Henderson v Mainpoint Enterprises Australia Pty Ltd [Print Q3756].

 6   Stagno v Frews Wholesale Meats [Print Q8637].

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