Emma Marshall v CKC Accountants Pty Limited t/a CKC Accountants
[2018] FWCFB 3027
•5 June 2018
| [2018] FWCFB 3027 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Emma Marshall
v
CKC Accountants Pty Limited t/a CKC Accountants
(C2018/1572)
| VICE PRESIDENT HATCHER DEPUTY PRESIDENT COLMAN |
|
Appeal against decision [2018] FWC 813 of Deputy President Sams at Sydney on 5 March 2018 in matter number C2017/1705.
Introduction and background
Ms Emma Marshall has lodged an appeal, for which permission to appeal is required, against a decision of Deputy President Sams issued on 5 March 2018[1] (Decision). In the Decision, the Deputy President dismissed an application for costs made by Ms Marshall under s 611 of the Fair Work Act 2009 (FW Act) against CKC Accountants Pty Limited (CKC). Ms Marshall’s costs application related to proceedings commenced by CKC pursuant to s 739 of the FW Act seeking to invoke the dispute resolution procedure in clause 9 of the Clerks – Private Sector Award 2010 (Award).
Section 611 of the FW Act 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 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).
The background and chronology of the underlying dispute between the parties requires explanation. Ms Marshall was employed by CKC, or by a corporate entity related to CKC, until approximately July 2015. In mid-2016, Ms Marshall advanced a claim that she had been underpaid in her employment in CKC. Her claim was initially advanced on the basis that she had not been paid in accordance with the National Minimum Wage. On 28 July 2016 Ms Marshall lodged a pay complaint with the Fair Work Ombudsman (FWO). In September 2016 Ms Marshall engaged lawyers to assist her in her underpayment claim. With the benefit of legal advice, Ms Marshall modified her claim to being one concerning underpayment under the Award, and CKC appears to have accepted that the Award had applied to Ms Marshall’s employment with it.
The parties made various attempts to settle the matter, with CKC having before the end of 2016 paid Ms Marshall a total of $6,201.11 plus superannuation, which constituted the amounts which it had calculated as owing to her under the Award. However, the pay dispute was not settled. On 30 March 2017 CKC lodged its application under s 739 for the Commission to deal with the dispute in accordance with the dispute resolution procedure in the Award. The application described the subject matter of the dispute as follows:
“Underpayment of wages for Cadet Accountant for the period 28 April 2011 to 26 July 2012.
Emma’s [sic] believes she has still been underpaid and CKC accountants seeks to have Fair Work Commission make a determination on this dispute.
We have done our best to make good on underpayment of wages using the correct classification and rates of pay with the assistance of the tools provided by Fair Work. This has become a disruption for our small business and has become quite costly in terms of lost time and legal expenses.”
On 13 April 2017 Ms Marshall lodged an application under s 372 of the FW Act for the Commission to deal with a general protections dispute (not involving dismissal). In her application Ms Marshall contended that CKC had before and during her employment made false and misleading representations about her workplace rights, including the terms of her employment, and that this had led to a loss of income. The application went on to recount in detail the history of Ms Marshall’s underpayment claim since July 2016. Ms Marshall sought as a remedy compensation for her underpayment of wages based on a minimum of Level 4 and preferably Level 5 under the Award together with interest and superannuation on these amounts, pecuniary penalties, costs and compensation for stress, hurt and humiliation. In her covering email to the application, Ms Marshall sought that it be joined to CKC’s dispute resolution application.
On 26 April 2017 the Deputy President conducted a telephone conference in relation to both CKC’s s 739 application and Ms Marshall’s s 372 application. Ms Marshall was legally represented at this conference, as was CKC. Unusually, an employee of the FWO also attended this conference, apparently at the invitation of, if not in association with, CKC, on the basis that he was there to assist with any technical issues concerning coverage of the Award. It was subsequently made clear by the FWO that this employee was neither authorised nor given permission to attend the conference, and it apologised for his attendance.
After the conference, the Deputy President closed the file in relation to the s 372 application on the basis that the statutory function in s 374 had been discharged. CKC did not seek that any further action be taken in relation to its s 739 application, although it appears that there was an agreement at the conference that CKC would pay Ms Marshall a further $4,400 in relation to her underpayment claim. This was confirmed in an email sent to the Deputy President’s chambers by Ms Marshall on 4 September 2017. Ms Marshall complained in this email that the agreed amount had not been paid, to which CKC responded (in an email dated 7 September 2017) that it had been “in a position to pay the $4,400 agreed since the afternoon of the hearing” but had been waiting on a signed deed of release from Ms Marshall’s lawyers.
On 28 August 2017 Ms Marshall advised the Commission that she was no longer represented by her previous lawyers, and from that point on she was self-represented. We were advised at the hearing of the appeal that Ms Marshall has lodged a complaint against her former lawyers with the Legal Services Commissioner.
On 7 September 2017 the Deputy President’s chambers advised the parties that the Deputy President was able to convene another conference in respect of the s 739 matter should the parties seek it. In response to this, CKC advised by email on 13 September 2018 that it wished to discontinue the application and asked the Commission to close its file, and in a separate email sent that day advised that CKC “…stands ready to fulfil the agreement reached at the conference… It requires only the return of the signed Deed of Agreement.”
On 27 September 2017 Ms Marshall filed her application for an order under s 611 of the FW Act that CKC pay her costs in respect of the discontinued s 739 proceedings. In that application Ms Marshall contended that those proceedings had been brought without reasonable cause, and it was reasonably apparent that the application had no reasonable prospects of success, because the Commission had no jurisdiction to entertain a dispute between an employer and a person who was no longer employed by that employer. She also contended that CKC had the ulterior motive of bullying her. She sought a total of $3,300 in costs, and attached two invoices from her previous lawyers in support of this claim. The first invoice, dated 8 May 2017, contained itemised costs totalling $3,630 not including GST but discounted to $2,200 including GST. It covered the period 13 October 2016 to 3 May 2017. Over this period, of the total of $3,630, $1,685 was billed for that part which preceded the filing of CKC’s s 739 application on 30 March 2017, with the balance (being $1,945) billed on and from that date. No item is expressly identified as being related to CKC’s s 739 application, as distinct from Ms Marshall’s s 372 application, but it can be inferred that a number of items wholly or primarily relate to the latter: for example, noting that the s 372 application was filed on 13 April 2017, Ms Marshall was billed $60 on 12 April 2017 for “Review Form F8C draft”, and on 13 April 2017 she was charged $550 for “Conference with you, Mr Madden & Ms Banks”. The charge for attendance at the conference on 26 April 2017 was $550. The second invoice, dated 9 May 2017, covered itemised costs for the period from 19 September 2016 to 18 December 2016 inclusive and came to a total of $2,010 not including GST but discounted to $1,100 including GST. Many of the items in both invoices appear to relate to communications between the parties in relation to attempts to settle directly between them Ms Marshall’s underpayment claim.
On 21 November 2017 CKC filed its submissions in response to the costs application. In those submissions CKC, amongst other things, acknowledged that Ms Marshall had been underpaid and apologised for this. It asked the Commission to make orders to give effect to an offer made by CKC on 20 November 2017 to pay an additional $9,069.77 for the underpayment claim, plus to pay Ms Marshall costs to the amount of $2,106.50, provided she executed a “deed of settlement” in the form set out in the offer. We note that the offer was originally marked as being made “without prejudice”, but we consider that it became an open offer when CKC attached it to its submissions to the Commission and asked that orders be made to give effect to it. The proposed “deed of settlement” provided (in total):
“Emma Marshall acknowledges and agrees to the terms of the Offer made by CKC in the letter dated 20 November 2017 and that the amount of $9,069.77 is paid in full and final settlement of all Claims against CKC by Emma Marshall.”
Ms Marshall filed submissions in reply in which, among other things, she said that she opposed the orders proposed by CKC and that the Commission had no power to make them.
The Decision
In the Decision, after setting out the background to the matter[2] and summarising the parties’ submissions,[3] the Deputy President set out the established principles relating to the expressions “vexatiously”, “without reasonable cause” and “no reasonable prospects of success”.[4] The Deputy President advanced some criticism concerning Ms Marshall’s conduct throughout the proceedings,[5] and then dealt with her contention that the Commission had no jurisdiction to entertain CKC’s s 739 application as follows:
“[56]At this juncture, I should say that Ms Marshall’s submission alleging CKC’s s 739 application to the Commission to determine her claim of being incorrectly classified, as being beyond jurisdiction, is fundamentally wrong. This dispute about her classification, on her own evidence, arose in mid-July 2016 at a time when Ms Marshall was employed by CKC. Accordingly, in accordance with the principles set out in ING Administrators v Jajoo PR974301, a dispute commenced before a person ceases to be employed, is not one jurisdictionally barred by the statute. While the FWO’s observations as to the Commission’s jurisdiction may have given her some comfort, the FWO has no authority, let alone a power, to determine whether the Commission has jurisdiction in any matter before it.”
The Deputy President dealt with evidence adduced by Ms Marshall in support of her claim[6] and allegations that CKC had engaged in bullying and unethical behaviour in responding to her underpayment claim (which he rejected).[7] The Deputy President then stated his conclusions. He rejected Ms Marshall’s contention that CKC lodged its s 739 application vexatiously, finding that the application sought to do no more than “to resolve a long running and intractable dispute”, was a type of dispute which the Commission regularly encountered, and was not filed with any mala fide intent or for a collateral purpose.[8] He also found that there was nothing unreasonable about an employer seeking the Commission’s assistance, either through conciliation and/or arbitration (if permitted by the dispute settlement procedure) to resolve the pay dispute, and therefore the s 739 application was not lodged without reasonable cause.[9] The Deputy President likewise concluded that it could not be said that the application had no reasonable prospects of success since there was “a real and ‘live’ issue between the parties which screamed for resolution”.[10] The fact that CKC made limited admissions and acknowledgements and deposited monies into Ms Marshall’s account did not establish that Ms Marshall’s underpayment claim would ultimately have been successful in contested proceedings.[11] On these bases Ms Marshall’s costs application was dismissed.[12]
Ms Marshall’s appeal grounds and submissions
Ms Marshall’s appeal grounds, her grounds in support of the grant of permission to appeal, and her written and oral submissions were somewhat discursive. A number of the appeal grounds concerned alleged errors in respect of a range of incidental and background matters in the Decision as well as CKC’s conduct during the payment dispute rather than the Deputy President’s reasoning and conclusions concerning her costs application. To the extent that the latter were addressed, the main contentions raised by Ms Marshall appear to be as follows:
- the Deputy President erred in finding that she was still employed by CKC at the time she first raised her underpayment claim;
- consistent with the decision in ING Administrators v Jajoo, the Commission had no jurisdiction to deal with CKC’s s 739 application because she was not its employee when the pay dispute began, and accordingly the application was commenced without reasonable cause and had no reasonable prospects of success;
- the evidence demonstrated that CKC was aware of this prior to the filing of its s 739 application;
- the Deputy President had erred in concluding that her pay claim was not self-evidently correct, and a court of competent jurisdiction would find in her favour even though there was an issue about her correct classification under the Award and hence the amount involved;
- the Deputy President had not addressed all the various allegations she had made against CKC in support of her contention that the s 739 application was vexatious;
- the Deputy President had erred in taking into account conduct significantly post-dating the lodgement of the s 739 application in determining whether it was made without reasonable cause; and
- her arguments had not been considered and determined equally and impartially.
Consideration
An appeal under s 604 of the FW Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.[13] There is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is “in the public interest to do so”. Permission to appeal may otherwise be granted on discretionary grounds.
The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[14] The public interest is not satisfied simply by the identification of error, or a preference for a different result.[15] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...”[16]
Other than the special case in s 604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused.[17]
It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.[18] However, as earlier stated the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal.[19]
We have determined not to grant permission to appeal. We are not satisfied that it is necessary to grant permission in the public interest, or that we should exercise our discretion in favour of granting permission to appeal. Our reasons are as follows.
First, it may be accepted that the Deputy President erred in finding that Ms Marshall remained employed with CKC at the time she initiated her pay dispute with CKC in 2016. In fact, as earlier set out, her employment had ended approximately a year earlier in 2015. However we do not consider that this error by itself justifies the grant of permission to appeal. There are a number of decisions which indicate that, in respect of enterprise agreements, the Commission is not conferred with jurisdiction to resolve disputes pursuant to a dispute resolution procedure if the dispute is initiated under the procedure at a time when the persons who are said to be in dispute with the employer are in fact no longer employed.[20] However, those decisions made under the FW Act in each case turned on the terms of the particular dispute resolution procedure in question. There is no clear authority that s 739 itself confines the operation of the Commission’s dispute resolution jurisdiction to disputes initiated by currently employed persons. The dispute resolution procedure in clause 9 of the Award (which, by the time the s 739 application was lodged, it was agreed applied to Ms Marshall’s former employment) does not unambiguously prevent an employer covered by the Award from referring a dispute with a former employee to the Commission for assistance. That is, contrary to Ms Marshall’s submissions, it is not self-evident that because she only raised her underpayment claim after her employment had terminated, the Commission had no power to deal with it pursuant to clause 9 of the Award.
Second, even if that issue were determined in Ms Marshall’s favour, it does not automatically follow that it should have been “reasonably apparent” to CKC that its s 739 application had “no reasonable prospects of success” for the purpose of the jurisdictional pre-condition in s 611(2)(b). Clause 9.3 of the Award only provides for the Commission to engage in mediation, conciliation and consent arbitration, so that the process initiated by CKC could not on any view have resulted in a determination being imposed upon Ms Marshall without her consent. In that context, “success” could only mean the process might lead to an agreed outcome to the pay dispute being achieved. In that respect, the application can be characterised as substantially successful to the extent that at the conference before the Deputy President an agreed settlement to the pay dispute was in fact reached, albeit that it was not consummated by the parties entering into a settlement deed to finalise the matter.
Third, despite being legally represented, Ms Marshall did not make any jurisdictional objection to the s 739 application prior to or during the conference before the Deputy President. To the contrary she participated in the conference and agreed to a settlement which, if effected, would have resulted in a sum of money being paid to her by CKC in relation to her pay claim. That is, Ms Marshall did not object to the s 739 application at the earliest stage in order to avoid incurring unnecessary costs, but actively participated to her advantage in a conference which she now contends the Commission had no power to conduct. Nothing that has been put before us suggests there should be a departure from the usual principle that a party is bound by the conduct of their lawyers. We do not consider it appropriate in those circumstances to permit Ms Marshall to now agitate this jurisdictional issue in her appeal.
Fourth, we consider that the material before the Deputy President plainly demonstrated that CKC lodged its s 739 dispute in a bona fide attempt to resolve Ms Marshall’s underpayment claim, in circumstances where it had been unable to do so over a period of some nine months notwithstanding it had acknowledged that it had underpaid her and made various offers of settlement. In that respect we do not consider it to be reasonably arguable that the Deputy President erred in concluding that CKC’s s 739 application was lodged vexatiously or without reasonable cause.
Fifth, Ms Marshall did not demonstrate that she had incurred any significant costs in responding to CKC’s s 739 application. We have earlier summarised the invoices from her lawyers which she advanced in support of her costs application. These disclose that she only incurred $1,945 in legal expenses on and from the date CKC lodged its s 739 application. These costs were itemised on an invoice which was then discounted by about 40%, so this amount may be reduced to about $1,167. Of this, no costs were identified in the invoices as solely attributable to the s 739 application. A significant proportion of the costs, as earlier discussed, are inferentially solely or primarily attributable to Ms Marshall’s s 372 application, and other costs appear to relate to a continuation of the previous attempts to directly resolve the underpayment claim with CKC. Only the itemised costs of the lawyers’ attendance at the conference before the Deputy President on 26 April 2017 is unambiguously connected to CKC’s s 739 application, but that is entangled with the costs of Ms Marshall’s s 372 application which was listed for conference at the same time at her request. In short, the material does not unequivocally demonstrate that Ms Marshall incurred any legal costs that she would not have incurred had CKC not filed its s 739 application.
Sixth, the open offer of settlement made by CKC in its submissions opposing the costs application would, if accepted, have involved Ms Marshall being paid a further amount in settlement of her underpayment claim ($9,069.77) that was more than twice the amount she agreed to accept at the conference before the Deputy President on 27 April 2017 ($4,400), and in addition the payment of an amount for her costs ($2,106.50) that was far in excess of what she could legitimately have been awarded had her costs application been successful. The deed of settlement she was asked to sign in consideration of these payments, which we have earlier set out, was entirely unexceptional. We do not consider that it is appropriate to grant Ms Marshall permission to appeal in order for her to continue to agitate her claim for costs in circumstances where she failed to accept this offer.
Finally, we do not consider that the appeal raises any issue of importance or general application which requires resolution by a Full Bench in the public interest.
Order
We order that permission to appeal is refused.
VICE PRESIDENT
Appearances:
E. Marshall on her own behalf
A. Miller on behalf of CKC Accountants Pty Ltd t/a CKC Accountants
Hearing details:
Sydney.
28 May:
2018.
<PR607502>
[1] [2018] FWC 813
[2] Decision at [1]-[19]
[3] Decision at [20]-[34]
[4] Decision at [45]-[52]
[5] Decision at [53]-[55]
[6] Decision at [58]-[62]
[7] Decision at [63]-[68]
[8] Decision at [69]-[70]
[9] Decision at [71]-[72]
[10] Decision at [73]
[11] Decision at [73]-[76]
[12] Decision at [78]
[13] Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ
[14] O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] - [46]
[15] GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28]
[16] [2010] FWAFB 5343, 197 IR 266 at [27]
[17] Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481
[18] Wan v AIRC (2001) 116 FCR 481 at [30]
[19] Trustee for The MTGI Trust v Johnston [2016] FCAFC 140 at [82]
[20] ING Administration Pty Ltd v Jajoo ING Administration Pty Ltd v Jajoo (2006) 158 IR 239 ; Telstra Corporation Limited v CEPU [2007] AIRCFB 374; Deakin University v Rametta [2010] FWAFB 4387; CFMEU v North Goonyella Coal Mines Pty Ltd [2015] FWCFB 5619
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