Elite Essential Trades Pty Ltd T/A E-LITE Led SOLUTIONS v Alan Gauntlett-Gilbert
[2018] FWCFB 6035
•28 SEPTEMBER 2018
| [2018] FWCFB 6035 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Elite Essential Trades Pty Ltd T/A E-LITE LED SOLUTIONS
v
Alan Gauntlett-Gilbert
(C2018/3390) (U2017/13378)
| Vice President Catanzariti | SYDNEY, 28 SEPTEMBER 2018 |
Applications for costs sought in matter numbers (U2017/13378) and (C2018/3390).
On 15 December 2017, Mr Alan Gauntlett-Gilbert (Applicant Respondent) made an application for an unfair dismissal remedy under s.394 of the Fair Work Act 2009 (Cth) (Act) in respect of his employment with Elite Essential Trades Pty Ltd T/A E-LITE LED SOLUTIONS (Respondent Appellant). In a decision issued on 8 June 2018[1] Commissioner McKenna granted the Applicant Respondent’s unfair dismissal application and determined that the Respondent Appellant pay the Applicant Respondent $12,000 in compensation.
The Respondent Appellant then applied for permission to appeal and appealed the Commissioner’s decision. On 28 June 2018, Senior Deputy President Hamberger refused the Respondent Appellant’s application for a stay, and on 8 August 2018 we heard the application for permission to appeal. In a decision issued on 14 August 2018[2] (Decision), we determined to refuse permission to appeal.
On 28 August 2018, the Applicant Respondent made an application for costs in respect of the proceedings at first instance and the proceedings on appeal. The applications are made pursuant to s.400A of the Act.
In respect of the application for costs at first instance, we note that pursuant to s.402 of the Act costs sought under section 400A must be made within 14 days after the Fair Work Commission (Commission) has determined the matter. Given that the matter at first instance was determined on 8 June 2018 and that the application for costs in respect of those proceedings was made on 28 August 2018, we consider that this application must be dismissed as it was made outside of the statutorily prescribed time limit.
In respect of the application for costs on appeal, we note that the Chambers of the presiding Member of this Full Bench wrote to the Respondent Appellant at 12.28pm (AEST) on 26 September 2018, advising that in accordance with the Directions issued by the Commission on 5 September 2018, its submissions in respect of costs had not been filed by 4pm 19 September 2018. The Respondent Appellant was thereby directed to file its submissions by 4pm (AEST) 26 September 2018 or the application would be dealt with on the materials as filed. Given that the Respondent Appellant has not filed any submissions in respect of costs, that the Applicant Respondent has indicated, accordingly, that it did not intend to file submissions in reply, and in the absence of any objection for this cost application to be dealt with on the papers – we turn to consider the Applicant Respondent’s submissions as filed on 12 September 2018.
Submissions
The Applicant Respondent is seeking costs from the Respondent Appellant on the following grounds:
a)it should have been reasonably apparent to the Respondent Appellant that the Notice to Appeal had no reasonable prospects of success.
b)the Respondent Appellant’s application for permission to appeal was made with the intention of causing the Applicant Respondent further costs; and
c)the Respondent Appellant did not avail himself of legal representation. The Respondent Appellant, throughout the course of the proceedings acted vexatiously and unreasonably, and the Applicant Respondent incurred significantly higher costs due to the Respondent Appellant’s conduct.
Ground (a) – it should have been reasonably apparent that the appeal had no reasonable prospects of success.
It is submitted that prior to the stay hearing on 28 June 2018, the Applicant Respondent had issued a Calderbank letter to the Respondent Appellant on 27 June 2018. This letter followed an earlier Calderbank letter which was sent on or around 16 March 2018. Following the Senior Deputy President’s ex tempore decision in refusing the Respondent Appellant’s application for a stay, the Applicant Respondent issued a third Calderbank letter.
Ground (b) - the appeal was made with the intention of causing the Applicant Respondent further costs.
It is submitted that the Respondent Appellant appeal was a request for a rehearing, was made without reasonable prospects of success, and was the first time that it had sought to file any substantive material in relation to the matter.
Ground (c) - the Respondent Appellant acted vexatiously and unreasonably, and the Applicant Respondent incurred significantly higher costs due to the Respondent Appellant’s conduct.
It is submitted that the Respondent Appellant failed to realise that it had no reasonable prospects of success, and alternatively that it had failed to engage independent legal advice on the matter. Moreover, the Respondent Appellant had failed to accept the second and third Calderbank offers in circumstances where it was reasonable to do so.
Relevant legislative provisions
Section 400A appears in Part 3-2 Unfair Dismissal. The object of the Part is set out in s.381:
“Object of this Part
(1) The object of this Part is:
(a) to establish a framework for dealing with unfair dismissal that balances:
(i) the needs of business (including small business); and
(ii) the needs of employees; and
(b) to establish procedures for dealing with unfair dismissal that:
(i) are quick, flexible and informal; and
(ii) address the needs of employers and employees; and
(c) to provide remedies if a dismissal is found to be unfair, with an emphasis on reinstatement.
(2) The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned.”
Note: The expression “fair go all round” was used by Sheldon J in In re Loty and Holloway v Australian Workers’ Union [1971] AR (NSW) 95
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.”
Item 4 of the Fair Work Amendment Bill 2012 inserted a new section 400A into the Act to enable the Fair Work Commission (Commission) 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.[3] The explanatory memorandum provides as follows:
“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.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”
The Full Bench in Baxter Healthcare Pty Ltd T/A Baxter Healthcare v Andrew Portelli (Baxter)[4] observed in relation to s.400A and s.611 of the Act:
“[95] We note at the outset that the relevant sections provide that if the requisite jurisdictional facts are established (relevantly, ss. 400A(1) and (2), and s.611(2)) then the Commission may make an order for costs. A costs order does not automatically follow upon a finding of the requisite jurisdictional fact. It is clear from the use of the word ‘may’ that the Commission retains a discretion as to whether or not to make an order for costs. In that regard these provisions may be contrasted with ss. 418(1) and 424(1), which provide that the Commission must make certain orders if certain jurisdictional facts are present.”
In so far as the principles set out in Baxter apply to s.400A, we respectfully adopt those principles.
Consideration
In assessing the cost application sought on appeal, it is important to observe that the appeal proceeding was listed for a permission to appeal only hearing on 8 August 2018. For the reasons given in [2018] FWCFB 4637, this Full Bench refused permission to appeal and therefore the matter did not proceed to a substantive hearing on the merits of the appeal. The criteria set out s.400A should therefore be considered in that context.
A permission to appeal proceeding does not necessarily require the Respondent to attend the hearing, nor does it require the Respondent to put on written submissions in the lead up to that hearing. As reflected in the Directions issued by the presiding Member of this Full Bench on 29 June 2018, the Respondent’s participation in the permission to appeal proceeding was voluntary. This follows because the primary focus of the permission to appeal proceeding is for the Appellant to persuade the Full Bench that the public interest is enlivened by their appeal. Should that be demonstrated, a substantive hearing on the merits of the appeal will then be listed for hearing and the parties, at that point in time, will be directed to put on written submissions as to why the appeal ought to be upheld or otherwise dismissed. At that stage, it is reasonably expected that the Respondent will incur costs in the preparation of a defence to the appeal, but at no stage prior, is the Respondent reasonably expected to incur costs.
In these circumstances, we do not consider that the Respondent Appellant could have caused the Applicant Respondent to incur costs because of an unreasonable act or omission. Accordingly, the required jurisdictional fact under s.400A(1) have not been established and therefore our discretion under s.400A to award costs is not enlivened. In any event, if our discretion was enlivened, we would not exercise our discretion to award costs sought in the permission to appeal proceedings in (C2018/3390) for the reasons set out above.
Conclusion
The Applicant Respondent’s application for costs at first instance (U2017/13378) and application for costs in the permission to appeal proceedings (C2018/3390) are dismissed.
VICE PRESIDENT
Hearing details:
Determined on the papers.
Final written submissions:
Applicant Respondent’s submissions on costs on appeal dated 12 September 2018.
<PR700864>
[1] [2018] FWC 3221; Order (PR607989).
[2] [2018] FWCFB 4637.
[3] Fair Work Amendment Bill 2012 Explanatory Memorandum at [168].
[4] [2017] FWCFB 3891; and applied in NSW Trains v Mohammed Ayub[2017] FWCFB 4801.
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