Daryl Martin v Green Vic Pty Ltd

[2020] FWC 551

[2020] FWC 551

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Daryl Martin
v
Green VIC Pty Ltd
(U2019/8276)

COMMISSIONER PLATT ADELAIDE, 5 FEBRUARY 2020

Application for costs pursuant to ss.400A and 611 of the Fair Work Act 2009 – application dismissed.

[1] This decision concerns an application by Green VIC Pty Ltd (Green VIC) made on 15 December 2019 seeking an order for costs against Mr Daryl Martin pursuant to ss.400A and 611 of the Fair Work Act 2009 (the Act). The application is made in the context of an unfair dismissal application made pursuant to s.394 of the Act on 26 July 2019 by Mr Martin. The unfair dismissal application (the substantive matter) was heard on 3 December 2019 and dismissed in an ex tempore decision which was edited and published on the same date. 1

[2] Directions as to the substantive matter were issued on 10 October 2019 which required each party to file and serve statements and submissions by 31 October 2019, with material in reply due 7 November 2019.

[3] In both the substantive matter and this application, Mr Martin was represented by Ms Barnes-Whelan of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and Green VIC was represented by Mr Jimmy Diakou of counsel with permission being granted pursuant to s.596(2) of the Act. Written submissions with respect to costs were provided by each party and a reply submission by Mr Martin. There being no factual disputes, a hearing was not conducted and the matter has been determined on the papers.

The Substantive Case

[4] A review of the published decision in the substantive matter reveals that Mr Martin was dismissed as a result of allegations concerning his conduct. These allegations included refusing to perform work and leaving the workplace without reason.

[5] The evidence provided by the witnesses is summarised at paragraphs [8] to [12] of the decision.

[6] There was a conflict between the witness evidence called by Green VIC and Mr Martin in respect of the conduct which resulted in the dismissal. The conflict was resolved on the basis as detailed in paragraphs [16] to [18] of the decision. In summary, I preferred the evidence of the other witnesses over Mr Martin as to the operation of the crane, and the events of 6 July 2019 and found that a valid reason existed and that the dismissal was not harsh, unjust or unreasonable.

The Power to Award Costs

[7] The power to award costs is discretionary and subject to specified statutory prerequisites. The presumption under the Act is that each party bears their own costs.

[8] Section 400A of the 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.”

[9] Section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 states:

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.”

[10] Section 611 of the Act is 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).”

Section 611(2)(a) Application brought vexatiously or without reasonable cause

[11] The meanings of the terms ‘vexatiously’ and ‘without reasonable cause’ were discussed in Church v Eastern Health. 2 The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain a collateral advantage.3

“[25] The meaning of the term ‘vexatious’ was considered by Asbury C in Mokomoko v Zennforce Protection Group Pty Ltd:

“[13] The circumstances in which an application will be found to have been made vexatiously were discussed by Justice North in Nilsen v Loyal Orange Trust as follows:

“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceedings. It is an alternative ground to the ground based on lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceedings. 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.”

[14] In Attorney-General v Wentworth Roden J observed that litigation may be regarded as vexatious on objective or subjective grounds and that the test could be expressed as follows:

“1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought;

2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the Court adjudicate on the issues to which they give rise.

3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless...” (citations omitted)

Section 611(2)(b) Application had no prospects of success

[12] The meaning of the terms ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ were considered by a Full Bench in Baker v Salva Resources Pty Ltd 4 who said:

“[10] The concepts within s.611(2)(b) 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.”

Submissions in relation to the Costs application

[13] With respect to the claim of costs pursuant to s.611 of the Act, Green VIC contend that the application was made without reasonable cause.

[14] Green VIC contend this position is supported by my factual findings in paragraphs [4], [8] and [10] of the decision in the substantive matter. It should be noted that what has been described by Green VIC as my findings are in fact a summary of each witness’s evidence given.

[15] Green VIC contends that Mr Martin should have seen that, upon his own version of the facts, his case was doomed to fail. Green VIC referred me to Mr Martin’s conduct on 6 July 2019 when leaving the site and giving a two fingered salute.

[16] There was no submission that Mr Martin’s application was vexatious.

[17] With respect to the s.611 costs application, Mr Martin contends that he was not advised at the time of his dismissal of the reason and did not become aware of the same until receiving the Form F3 Employer Response on 16 September 2019. A number of reasons contained in the Form F3 Employer Response were not advanced at the hearing. Mr Martin contends that the procedural defects found was a basis upon which his dismissal could have been found to be unfair. Mr Martin contends that the substantive decision was reliant upon the evidence given at the hearing, the strength of which could not have been apparent to him at the time the application was made.

[18] With respect to the s.400A costs application, Green VIC contends that Mr Martin failed to accept a reasonable settlement offer and that this was an ‘unreasonable act or omission’.

[19] The settlement offer was made on 25 September 2019 by email and included the payment of $2,570, the change of the dismissal to a resignation and provision of a statement of service upon execution of a deed of release. The offer was made on a without prejudice save as to costs basis and expired at 11.00am on 26 September 2019.

[20] Mr Martin contends that he was not given sufficient time to consider this offer having less than 24 hours to consider the same and that the offer (which was less than a week’s wages) was too low in the circumstances and that he had not had the information necessary to assess his case and was in the process of trying to locate witnesses to rebut the allegations made against him.

[21] Mr Martin also submits that Green VIC rejected two subsequent invitations, one on 13 November 2019 and the other immediately prior to the hearing, to conciliate the matter.

[22] Both parties made submissions on the law as to the granting of costs.

Consideration

[23] I deal firstly with the s.400A application which relies upon a failure to settle the matter on the terms proposed on 25 September 2019.

[24] The timeframe for acceptance was short and this offer expired prior to the date upon which the parties were required to file and serve their statements and submissions. Whilst the Form F3 Employer Response referred to Mr Martin abandoning the site on 6 July 2019, I accept that at that early stage Mr Martin would not have been in a position to weigh up the evidence against him. I accept that the settlement offer was low is respect of what remedy Mr Martin could have received if his case was successful and that it also appeared to be a global settlement offer which would have prevented any other claim including unpaid notice.

[25] On the information before me, I do not believe that Mr Martin’s conduct in not accepting the settlement offer was an unreasonable act or omission such to consider my discretion to award costs. The fact that the application was not successful does not automatically enliven costs.

[26] I turn now to the s.611 costs application. There is no submission or evidence to suggest that Mr Martin’s application was vexatious.

[27] With respect to the contention that Mr Martin’s application was made without reasonable cause, I note that the witness statements relied upon by Green VIC as to the events of 6 July 2019 were scant. In addition, there was no evidence that Green VIC had complied with the procedural requirements of s.387 of the Act. I do not believe that prior to the oral testimony it could reasonably be said that Mr Martin had no reasonable prospects of success. This case, like many others, was determined on oral testimony and the making of credit findings. In my view, it cannot be said that Mr Martin had no reasonable prospect of success and thus that his application was made without reasonable cause.

[28] I do not believe that Mr Martin’s conduct in failing to settle or proceed to hearing provide an appropriate basis upon which to exercise my discretion to award costs.

[29] The application for costs is dismissed. An Order 5 reflecting this decision will be issued.

COMMISSIONER

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<PR716378>

 1   [2019] FWC 8208

 2   [2016] FWC 8753

 3   Ibid

 4   [2011] FWAFB 4014

 5   PR716379