Dr Simin Maleknia v University of Sydney

[2015] FWCFB 4002

[2015] FWCFB 4002

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Dr Simin Maleknia
v
University of Sydney
(C2014/7228)

VICE PRESIDENT HATCHER
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER CARGILL

SYDNEY, 26 JUNE 2015

Appeal against decision [2014] FWC 7773 of Senior Deputy President Drake at Sydney on 6 November 2014 in matter number U2014/5331 – application under s.611 of the Fair Work Act 2009 for costs.

[1] On 7 March 2014 Dr Simin Maleknia lodged an unfair dismissal remedy application pursuant to s.394 of the Fair Work Act 2009 (the FW Act). In that application, Dr Maleknia alleged that she had been dismissed from her employment with the University of Sydney on 14 February 2014. In its response to the application, the University contended (among other things) that Dr Maleknia’s employment had in fact terminated on 31 December 2013 upon the expiry of a fixed-term contract of employment, with the result that the application was lodged outside the 21-day time limit specified in s.394(2)(a). The University further contended that there were no exceptional circumstances justifying the grant of an extension of time to file the application under s.394(3). On that basis, the University submitted that the application should be dismissed.

[2] In a decision issued on 6 November 2014 1, Senior Deputy President Drake determined to dismiss Dr Maleknia’s application. The Senior Deputy President found that Dr Maleknia’s employment did in fact terminate on 31 December 2013 and therefore that the application was lodged out of time, and she was not satisfied that there were exceptional circumstances permitting the grant of an extension of time.

[3] On 27 November 2014 Dr Maleknia lodged a notice of appeal in which she sought permission to appeal and appealed the decision of the Senior Deputy President. In a decision issued on 5 February 2015 2, this Full Bench refused permission to appeal. In that decision, we said:

“[11] ... We also consider that on facts as earlier stated (which were either not in dispute or incontrovertibly established by the evidence), the conclusion reached by the Senior Deputy President was clearly correct. Under the Appellant’s contract of employment, the term of her employment ended on 31 December 2013, and there was no evidence to support the proposition that the Respondent entered into any further contract for employment after that date.”

[4] In relation to the decision of the Senior Deputy President not to extend time for the filing of the application, we said:

“[19] The Appellant’s notice of appeal and submissions, as we understand them, only challenged the Senior Deputy President’s determination of the date of the termination of employment, and did not in the alternative challenge the refusal to extend time. For completeness, we cannot identify any error in the Senior Deputy President’s refusal to extend time. All the matters identified in s.394(3) were taken into account, and the conclusion reached was one that was reasonably available.”

[5] We went on to consider, and reject, the various grounds of appeal advanced by Dr Maleknia, and then stated the following conclusion:

“[20] No arguable case of appealable error has been demonstrated by the Appellant, and no other basis upon which the public interest is attracted has been identified. We are not satisfied that it would be in the public interest to grant permission to appeal, and accordingly as required by s.400(1) permission to appeal is refused.”

[6] On 13 February 2015 the University applied for its costs of the appeal under s.611 of the FW Act. Section 611 relevantly provides:

611 Costs

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

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

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

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.

. . .

[7] The University submitted in support of its costs application that Dr Maleknia brought the application without reasonable cause and further that it should have been reasonably apparent to her that her appeal had no reasonable prospects of success. On this basis, it contended, the preconditions in s.611(2) to the exercise of the discretion to award costs were met. It pointed to the fact that, both at first instance and on appeal, Dr Maleknia’s case turned on the proper identification of the date of the termination of her employment. The date of termination was clearly established by the evidence, the University submitted, and there was never any reasonable prospect of Dr Maleknia establishing that there were public interest grounds which permitted the grant of permission to appeal or that there was any appealable error on the part of the Senior Deputy President in respect of her identification of the date of termination.

[8] The University sought indemnity costs or, in the alternative, costs on a party-party basis. Ms Jane Wright, the legal practitioner who represented the University in the appeal, made a witness statement dated 5 March 2015 concerning the amount and nature of the costs incurred. Ms Wright is employed by the University as a Consultant Solicitor in the Office of General Counsel of the University. She identified that she performed 23.5 hours’ work on the appeal, and said “The University incurred total costs of $6,110 ($260 per hour) in respect of work performed by me in respect of the Appeal”.

[9] Dr Maleknia opposed the costs application on the basis that her appeal was reasonably arguable. In her submissions, she re-agitated many of the arguments which were rejected in our earlier decision and raised a number of matters which were, frankly, irrelevant to the issue at hand.

[10] Had Dr Maleknia’s appeal been concerned with the Senior Deputy President’s refusal to extend time for her to lodge her application, it would be difficult to say that it was made without reasonable cause or that it should reasonably have been apparent to Dr Maleknia that it had no reasonable prospects of success. The determination of an extension of time application is essentially a discretionary exercise which initially requires the matters specified in s.394(3), none of which are determinative, to be taken into account in order to assess whether exceptional circumstances exist, and if they do, then requires the exercise of a general discretion. In circumstances where the application is in the order of six weeks late, as was Dr Maleknia’s, an appeal from a decision to refuse an extension of time could probably not in most circumstances be characterised as totally hopeless.

[11] However, as stated in our earlier decision (in paragraph [19] quoted above), Dr Maleknia’s appeal was not concerned with the refusal of an extension of time. Her contention was that her employment in fact terminated on 14 February 2014, that her application was not filed out of time, and that the Senior Deputy President erred in finding otherwise. We consider that this contention was manifestly untenable and was not reasonably arguable. 3 As we stated in paragraph [11] of our earlier decision, the facts as found by the Senior Deputy President (which were either incontrovertible or not challenged in the appeal) firmly established a termination date of 31 December 2013. The Senior Deputy President, in an observation attached to a finding in her decision which we agree with and adopt, said (underlining added):

“I am satisfied and find that the end of Dr Maleknia’s employment with USYD on 31 December 2013 was made as clear to Dr Maleknia as it could have been, and that any educated person who read the correspondence and documents would understand that.”

[12] We are satisfied that the precondition in s.611(2)(b) is satisfied. It is therefore necessary for us to consider whether we should exercise our discretion in favour of making an order for costs against Dr Maleknia.

[13] As earlier noted, the costs claimed by the University are those of an employed legal practitioner. In the general law, the fact that a legal practitioner acting for a party to proceedings is a salaried employee of that party is not a bar to the party recovering its costs of the proceedings. In Commonwealth Bank of Australia v Hattersley 4the Supreme Court of NSW (Davies AJ) said:

“[17] The general appropriateness of treating the work of an employed lawyer on the same basis as that of an independent lawyer has been accepted since the decision in The Attorney-General v Shillibeer[1849] EngR 1150; (1849) 4 Ex 606, (1849) 154 ER 1356. In that case, the question was whether the Solicitor of Excise, who was paid a fixed yearly salary, was entitled to the costs of an ordinary solicitor on a taxation as between party and party. Baron Parke, in delivering the judgment of the Exchequer Court, held that the Crown was entitled to the ordinary costs of suit as between subject and subject. As one ground for adopting this view, his Lordship pointed to the difficulty of determining the cost of one suit. As the Solicitor was entitled to a yearly salary, his activities in relation to other suits would have to be taken into account, if apportionment was required.

[18] Similarly, in Raymond v Lakeman [1865] EngR 350; (1865) 34 Beav 584, (1865) 55 ER 761, Sir John Romilly held that salaried solicitors employed by a corporation were entitled to recover costs on the ordinary basis. In Galloway v Corporation of London(1867) LR 4 Eq 90, Sir W Page Wood VC held that the Corporation of London was entitled to have its costs taxed in the usual way notwithstanding that it employed its own solicitor.

[19] Counsel for the Attorney General, Mr Leeming, has referred me to many Australian cases which have applied the same principle, including Lenthall v Hillson [1933] SAStRp 13; [1933] SASR 31, Nolan v George[1959] QdR 315, Blackall v Trotter (No. 1) [1969] VicRp 114; [1969] VR 939, McCullum v Ifield(1969) 2 NSWR 329 and Bank of Western Australia Ltd v O'Neill[1999] WASC 10. In McCullum v Ifield, the Government Insurance Office was held to be entitled to recover party and party costs on the ordinary basis notwithstanding that its solicitor was employed by it. Taylor J said, at p 528, "It has been held that a party who employs a solicitor who is paid a salary by way of remuneration may nevertheless recover full costs on a party and party basis".

[20] There is a point of principle behind the approach enunciated in all these cases. It is that employed solicitors are not to be treated as second-class professionals. Lawyers are entitled to practice in their profession in a number of ways, one of which is to be a legal officer in a corporation which engages in commercial activities. Section 48F of the Legal Profession Actmakes this perfectly clear. It provides that the restrictions which exist upon the sharing of the receipts do not apply to any business conducted by a practitioner on behalf of his or her employer if the business concerns a proceeding or transaction to which the employer or a related body is a party.

[21] Practitioners who choose to carry on their profession as an employee of the Crown, of a statutory authority or of a corporation are entitled to have their work assessed on the same basis as that of independent solicitors exercising comparable skills in the performance of comparable work. It is not the manner in which the practitioner carries on his or her profession which counts, it is the nature of the work, the time spent and the skill, care and responsibility involved...”

[14] However there are peculiar considerations arising from the provisions of the FW Act concerning its procedures generally and legal representation specifically which make the automatic application by this Commission of the principles stated in Hattersley (and the cases cited therein) problematic. Section 577(b) of the FW Act requires the Commission to perform its functions and exercise its powers in a manner that “is quick, informal and avoids unnecessary technicalities”. Consistent with that general requirement, s.596(1) provides:

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

[15] Rule 12 of the Fair Work Commission Rules 2013 provides that permission is not required in respect of the preparation of a written application or written submission, the lodgement of a written application, written submission or other document, correspondence with the Commission, and participation in a conference or mediation concerning an anti-bullying application, subject to a contrary direction by the Commission.

[16] Section 596(2) sets out preconditions for the grant of permission for (relevantly) legal representation as follows:

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

[17] Section 596(3) is not presently relevant, but s.596(4) applies:

(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:

(a) is an employee or officer of the person; or

(b) is an employee or officer of:

(i) an organisation; or

(ii) an association of employersthat is not registered under the Registered Organisations Act; or

(iii) a peak council; or

(iv) a bargaining representative;

that is representing the person; or

(c) is a bargaining representative.

[18] The effect of s.596(4) is, for relevant purposes, that a party to a proceeding before the Commission may be represented as of right by a legal practitioner employed by that party notwithstanding that none of the preconditions specified in s.596(2) is capable of satisfaction in respect of that proceeding and/or that the circumstances are such that the discretion would not be exercised in favour of granting legal representation. This may mean, for example, that a party may be represented by an employed lawyer in a matter even though the matter is not of sufficient complexity to require legal representation, is capable of resolution in an informal manner, and the other party is a self-represented individual.

[19] In circumstances like these, we consider there should be considerable caution in the exercise of the discretion under s.611(2) to order costs notwithstanding that any precondition specified in that provision is satisfied. An unsuccessful party should not necessarily have to pay the costs of a successful party where the use of an employed lawyer, and the cost associated with that use, was not required to obtain that success and/or where it gave an unfair advantage to the successful party.

[20] In respect of this appeal, it cannot be said that the matter was overly complex. Indeed because it was factually obvious that Dr Maleknia’s employment terminated on 31 December 2013, it was on one view a straightforward case, although we recognise that there are specific legal principles applying to the conduct of appeals which may not readily be appreciable by a layperson. Additionally, Dr Maleknia, although she was represented by counsel in the proceedings at first instance, represented herself in the appeal, and it cannot be said that she did so with any degree of skill.

[21] A further consideration is that the matter was listed in accordance with the Commission’s new pilot procedures applying to appeals in unfair dismissal matters. Under these procedures, appeals are usually listed for hearing initially only in relation to the issue of permission to appeal. The respondent is not required to file any submission or other document prior to the hearing of the appeal (unless the respondent seeks permission for representation by a lawyer or paid agent under s.596). The hearings are listed on the basis that parties are generally confined to one half hour in the presentation of their respective cases - which, in this case, resulted in the hearing of the appeal taking about an hour and a quarter. One of the purposes of these new procedures, which seek to give practical effect to s.577(b), is to confine significantly the cost of appeals, especially for respondents to unmeritorious appeals. It can be expected that, in light of these new procedures, respondents to such appeals will not incur legal costs as if, as was previously the case, the appeal was listed for a full hearing with a requirement on all parties to file written submissions in advance.

[22] Having regard to all these matters, we will make an order that Dr Maleknia pay the University $1240 on account of costs. That amount is calculated on the basis of four hours’ work at Ms Wright’s nominated hourly rate of $260 (which we consider to be reasonable). Four hours represents the amount of time for which we consider that it was reasonable in all the circumstances for the University to utilise the services of a lawyer in respect of the appeal. That is not to say that it was not necessary for additional working time to be spent in connection with the appeal, but on the material before us we are not satisfied that it was absolutely necessary for a lawyer to perform that work. In reaching this conclusion, we wish to make it clear that it is one arising from the particular circumstances of this case and is not to be taken as a “rule of thumb” for costs in relation to permission to appeal hearings in unfair dismissal cases.

[23] Dr Maleknia will have 21 days to pay. An order giving effect to this decision will be issued separately.

VICE PRESIDENT

Final written submissions:

21 May 2015 – Dr Simin Maleknia.

5 March 2015 – University of Sydney.

 1  [2014] FWC 7773

 2  [2015] FWCFB 509

 3   See Baker v Salva Resources Pty Ltd [2011] FWAFB 4014 at [10]

 4   [2001] NSWSC 60

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