FEDERAL CIRCUIT COURT OF AUSTRALIA
Haley v Laing O’Rourke Australia Management Services Pty Ltd [2021] FCCA 257
File number(s): SYG 2432 of 2020 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 19 February 2021 Catchwords: PRACTICE AND PROCEDURE – Application that an applicant in a matter arising under the Fair Work Act 2009 (Cth) (FW Act) give security for costs – whether usual principles for the granting of security for costs apply to matters arising under the FW Act given s 570 of the FW Act – usual principles apply only where the protection provided for by s 570 of the FW Act and its underlying rationale can be preserved – applying the usual rules regarding the granting of security in the circumstances of the case would not preserve the protection afforded by s 570 of the FW Act to the applicant or respect its underlying rationale – application for security for costs dismissed. Legislation: Fair Work Act 2009 (Cth), ss 44(1), 340, 341(1)(c)(ii), 542, 543, 545, 546, 570
Federal Circuit Court of Australia Act 1999 (Cth), ss 79, 80
Cases cited: Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194
Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66
Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics) [2015] FCCA 2094
Number of paragraphs: 38 Date of last submission/s: 12 February 2021 Date of hearing: 9 February 2021 Place: Sydney The Applicant: Appeared in person, by video Counsel for the Respondent: Mr R Jedrzejczyk and Ms A Poukchanski, by video Solicitor for the Respondent: Mills Oakley Lawyers ORDERS
SYG 2432 of 2020 BETWEEN: THOMAS HALEY
Applicant
AND: LAING O'ROURKE AUSTRALIA MANAGEMENT SERVICES PTY LTD
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
19 FEBRUARY 2021
THE COURT ORDERS THAT:
1.The respondent’s application in a case that the applicant give security for costs is dismissed.
REASONS FOR JUDGMENT
INTRODUCTION
The respondent (LOA) applies for an order that the applicant, Mr Haley, provide security for costs. The application is made in a proceeding Mr Haley commenced under the Fair Work Act 2009 (Cth) (FW Act) after LOA purported to summarily dismiss Mr Haley from his employment.
To be in a position to determine LOA’s application for security for costs, it will be necessary to set out some background that does not appear to be in dispute, some of Mr Haley’s allegations of fact and the claims he makes against LOA, and LOA’s response to those claims.
BACKGROUND
From 1 December 2003 until at least 24 July 2020 Mr Haley was employed by a company or companies that forms or form part of the group of companies of which LOA is a member.[1] It appears that until around the end of August 2018 Mr Haley lived and worked in the United Kingdom.
[1] Part G of Form 2, [2]; Response [2]
By letter dated 28 June 2018 LOA offered to employ Mr Haley in Australia as a Commercial Leader with LOA’s Clients and Markets team on the terms set out in a draft document titled “Contract of Employment” (Employment Contract). On 25 July 2018 Mr Haley accepted the offer of employment, and signed the Employment Contract. After he accepted LOA’s offer of employment Mr Haley moved to Australia holding a Temporary Skills Shortage (subclass 482) visa under the sponsorship of LOA, and he commenced his employment with LOA on about 24 September 2018.[2]
[2] Part G of Form 2, [8]; Response [8]. A copy of the Employment Contract is annexed to the affidavit of Mr Haley made on 15 January 2020.
The Employment Contract contained a term to the effect that it could be terminated at any time by either party giving three months’ notice in writing or by LOA making payment in lieu of all or part of the notice period. The Employment Contract also contained the following terms:
SECTION 1 – STANDARD TERMS AND CONDITIONS
. . . .
8. COMPANY POLICIES AND PROCEDURES
The Company has a Global Code of Conduct, as well as detailed policies, procedures, and other business rules (as replaced, amended or varied by the Company from time to time) (“Policies”) which are available through the intranet. These Policies do not form part of this Contract of Employment but you are required to familiarise yourself and abide by these Policies. Failure to comply with those Policies may result in disciplinary action being taken against you. Employees are required to act in accordance with directions from the Company and to observe all Policies, including the Code of Conduct whilst travelling between their home office location and project location.
. . . .
SECTION 4 – ADDITIONAL CONDITIONS OF EMPLOYMENT
. . . .
2. TERMINATION OF EMPLOYMENT
. . . .
Summary Termination
If you are guilty of misconduct or commit a serious or persistent breach of a term or condition of this document, the Company may terminate your employment immediately without notice. Without limiting the generality [of] this clause, your employment may be terminated immediately without notice if you:
(a)engage in wilful, or deliberate behaviour that is inconsistent with the continuation of your employment;
(b)engage in conduct that causes imminent and serious risk to a person’s health and safety, or the reputation, viability, or profitability of the Company;
(c)inappropriately use, copy or disclose of any personal information (including sensitive information) or Confidential Information other than for the purpose of performing your duties;
(d) neglect the discharge of your duties;
(e)become bankrupt or enter into any arrangement or composition with your creditors which in the opinion of the Company affects the discharge of your duties;
(f)are convicted of any criminal offence other than an offence that in the opinion of the Company does not affect the discharge of your duties;
(g)commit any act that involves secret or undisclosed commissions; or
(h)are precluded by any provision of the Corporations Act from holding your position.
If you are terminated for misconduct, no payment will be made to you other than accrued entitlements up until the date of termination.
In January 2020 LOA assigned Mr Haley to oversee the “Bushfire Recovery Programme” and he was given responsibility “in relation to matters of commercial governance”.[3] In that role Mr Haley was responsible for overseeing the procurement and selection of subcontractors, overseeing the processing and approval of payments to subcontractors in accordance with LOA’s contractual obligations, overseeing the provision of information relating to project costs to government stakeholders, and monitoring compliance with LOA’s and government stakeholders’ governance rules and procedures.[4]
[3] Part G of Form 2, [10]; Response [10]
[4] Part G of Form 2, [11]; Response [11]
During at least the first few days of July 2020 Mr Haley and other employees of LOA lodged at a property owned by Mr P and Mrs P while performing work in connection with a project known as “NSW Bushfires Clean-Up Project”. In the early hours of 3 or 4 July 2020 (the precise date is not clear on the evidence) an incident (Incident) occurred at the property which at the very least included Mr Haley making a statement or statements to Mr P and Mrs P after Mr P and Mrs P had complained about the noise those who were present at the property were making. Mr P and Mrs P complained to LOA about the Incident, and LOA appointed a Mr Rose to investigate the complaint.
According to Mr Haley, on 3 July 2020 Mr Rose telephoned Mr Haley and told him that LOA decided to suspend Mr Haley’s employment. Mr Haley says Mr Rose gave no reason for LOA’s decision to suspend his employment.[5] Also on 3 July 2020 Mr Haley received what he describes as a “Suspension of Employment” letter from LOA signed by Mr Rose. According to Mr Haley, the letter related to the Incident, and it stated LOA decided Mr Haley should not attend work while an investigation in relation to the Incident was being carried out.[6]
[5] Part G of Form 2, [12]
[6] Part G of Form 2, [14]
On 4 July 2020 Mr Haley says he telephoned Mr Rose and asked why he had been suspended, what had been the basis of the allegation against Mr Haley, whether allegations that have been made about Mr Haley amounted to serious misconduct, and other matters. Mr Haley says Mr Rose was unable to provide any response to Mr Haley’s enquiries.[7]
[7] Part G of Form 2, [15]
On 21 July 2020 Mr Chatwin, on behalf of LOA, sent a letter to Mr Haley.[8] The letter is in evidence, but it would be convenient if I set out what in his letter dated 24 July 2020 (to which I refer later) Mr Chatwin identified as the “important matters” contained in the letter of 21 July 2020. These were as follows (emphasis in original):[9]
[8] Exhibit A
[9] Mr Chatwin’s letter is attached to the Form 2
•That the investigation into yours’ and other Laing O’Rourke employees’ conduct on 3 July 2020 arising from complaints made by [Mr P and Mrs P], was complete.
•That findings had been made in relation to your alleged conduct.
•That Laing O’Rourke accepted the Investigator’s findings.
•That the allegations in the complaint against you were substantiated. . . . .
•That the investigator had also made findings that your conduct towards [Mr P and Mrs P] amounted to a breach of the Laing O’Rourke Code of Conduct and Travel Policy.
•That in the Company’s view, your conduct amounted to a breach of the Code of Conduct, Travel Policy and your contract of employment that requires you to comply with our policies and act at all times in the best interests of the Company.
•That the Company had additional concerns regarding your conduct at the party and during the investigation process, namely:
•That as the most senior Laing O’Rourke employee . . . you did not take steps to resolve the concerns of [Mr P and Mrs P] and instead engaged in the conduct that you did.
•That you did not admit to any wrongdoing and denied all allegations throughout the investigation process . . . .
•That based on the investigation findings, Laing O’Rourke considered your conduct amounted to serious misconduct that may warrant summary termination of your employment. The letter referred to your contract of employment that describes serious misconduct giving rise to termination of your employment without notice, to include among other things:
•engaging in wilful, or deliberate behaviour that is inconsistent with the continuation of your employment; and
•engaging in conduct that causes imminent and serious risk to…the reputation…of Laing O’Rourke.
•That in Laing O’Rourke’s view, your conduct reached the threshold outlined above (in relation to serious misconduct) and especially given the critical importance of community interaction and our reputation on the NSW Bushfires Clean-Up Project.
•That you had severely damaged our trust and confidence in you as an employee and in particular as a senior employee in a leadership position.
Mr Chatwin concluded his letter dated 21 July 2020 by stating that before making a final decision about whether to terminate the Employment Contract on the grounds of serious misconduct, Mr Haley is invited to attend a meeting with Mr Chatwin, Mr Cashin (Director – Major Projects), and a representative from “Human Capital” on 22 July 2020.
On 22 July 2020 Mr Haley met with Mr Chatwin, Mr Evans, Mr Cashin, a support person not employed by LOA, and Ms Byrne, a “Human Capital representative”.[10] Mr Haley alleges that at that meeting Mr Chatwin made a number of statements, including statements to the effect that the termination of Mr Haley’s employment would be handled with care; there would be full recognition for Mr Haley’s 17 years of exemplary service, the notice period would be honoured, and there would be an opportunity to discuss the “branding” of the decision.
[10] Part G of Form 2, [21]; Response [21]. Mr Haley, Mr Chatwin, Ms Byrne and Mr Evans attended the meeting in person and Mr Cashin joined by videoconference.
LOA denies statements to that effect were made at the meeting.[11] Mr Chatwin, however, recorded in his letter dated 24 July 2020 (to which I will refer later) what LOA says occurred at the meeting. According to Mr Chatwin, Mr Haley admitted a number of matters “in direct conflict with the unequivocal position” Mr Haley is alleged to have asserted and maintained from the day of the Incident and throughout the course of the investigation; and Mr Haley “made many concessions regarding” his conduct. Mr Chatwin also referred to an aspect of an assertion Mr Haley was alleged to have made about what had occurred at the Incident.
[11] Response, [21]
According to Mr Haley, at 4:45 pm on 24 July 2020 Mr Chatwin called Mr Haley and confirmed that he had been summarily dismissed. The telephone call was followed up with a letter dated 24 July 2020. In addition to referring to what Mr Chatwin says occurred at the meeting on 22 July 2020, Mr Chatwin made a number of statements. These include statements that Mr Haley “either lied in the investigation to the Investigator” or Mr Haley lied to Mr Chatwin and to Mr Cashin; the most striking thing to flow from the meeting of 22 July 2020 was Mr Haley’s “admissions” that he “lied about material aspects of the matter, including to the Investigator who had been charged with determining the facts of the matter at Laing O’Rourke’s request”; although Mr Haley’s concessions during the meeting “were appreciated, they came at the final hour and served to evidence a pattern of serious misconduct by [Mr Haley] intended to deliberately mislead the Investigator and Laing O’Rourke, which was in turn, intended to obscure the earlier serious misconduct that triggered the investigation”; Mr Haley had made a “false allegation against” Mr P; and LOA was “seriously concerned” about what Mr Haley said about another employee’s behaviour during the Incident.
MR HALEY’S CLAIMS
Mr Haley, who is not legally represented, makes two sets of claims. The first is based on LOA’s alleged breaches of the Employment Contract. Mr Haley claims it was a term of the Employment Contract that LOA could terminate it on giving three months’ notice, but LOA breached that term by purporting to summarily dismiss him.[12] Mr Haley claims LOA has not demonstrated its right to summarily dismiss him under the terms of the Employment Contract;[13] LOA’s decision to dismiss Mr Haley summarily was “completely disproportionate to the offence”;[14] and LOA’s reasons for summarily dismissing Mr Haley from his employment “are not sound, defensible or well founded”.[15] Mr Haley also claims that at the time LOA purported to summarily dismiss him there had accrued to Mr Haley amounts that became payable to him under the Employment Contract. Mr Haley claims judgment for the sum of amounts which reflect the three months’ salary he ought to have been paid had LOA given him three months’ notice, amounts Mr Haley claims he had accrued under his Employment Contract by the time LOA purported to summarily dismiss him from his employment, and an amount that reflects the amounts Mr Haley says would have been paid to him had his Employment Contract continued for the period for which it was made.
[12] Part G of Form 2, [26], [27]
[13] Part G of Form 2, [31]
[14] Part G of Form 2, [32]
[15] Part G of Form 2, [34]
The second set of claims Mr Haley makes are based on allegations that LOA contravened a number of provisions of the FW Act. Mr Haley’s principal claim is that by purporting to summarily dismiss him from his employment LOA contravened s 340 of the FW Act; and that is because LOA’s purported summary dismissal constituted LOA taking adverse action, and LOA took such action because Mr Haley claims he exercised his workplace rights within the meaning of s 341(1)(c)(ii) of the FW Act by having made complaints or inquiries in relation to his employment. Mr Haley also claims LOA has contravened s 44(1) of the FW Act by having contravened a number of provisions of the “National Employment Standards”. Mr Haley claims an order for compensation and also an order that LOA pay pecuniary penalties.
LOA denies Mr Haley’s claim that LOA has not demonstrated it was entitled to summarily dismiss Mr Haley from his employment, but, in paragraphs 34(a) and (b) of its response, LOA additionally says as follows:[16]
(a). . . the investigator appointed by the Respondent to investigate the allegations made against the Applicant made findings, relevantly, that:
(i)the Applicant acted in an aggressive, inconsiderate, deplorable and intimidating manner towards [Mr P and Mrs P] during the incident that occurred in the early hours of the morning on 4 July 2020;
(ii)the Applicant breached section 1 of the Respondent’s Code of Conduct and section 3 of the Respondent’s Travel Policy;
(b). . . in the course of the meeting on 22 July 2020 with Mr Chatwin and others (show cause meeting), the Applicant admitted that he had used offensive language toward [Mr P and Mrs P] on 4 July 2020.
[16] Response, [34]
LOA also denies it summarily dismissed Mr Haley’s employment for any of the reasons Mr Haley alleges. LOA says that it terminated Mr Haley’s employment “for the reasons set out in paragraphs 34(a) and (b) herein and the further reasons set out in the letter dated 24 July 2020 from Mr Chatwin to [Mr Haley]”.[17]
[17] Response, [50]
JURISDICTION AND PRINCIPLES
This Court’s power to order security for costs is conferred by s 80(2) of the Federal Circuit Court of Australia Act 1999 (Cth) (FCC Act), which provides:
The Federal Circuit Court of Australia or a Judge may order an applicant in a proceeding in the Federal Circuit Court of Australia to give security for the payment of costs that may be awarded against him or her.
Subsection 80(2) of the FCC Act is directed to the giving of security for the payment of costs “that may be awarded” against an applicant. That directs attention to the power this Court has to award costs; and that power is to be found in s 79 of the FCC Act, which relevantly provides:
(1) This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009 or section 14, 15 or 16 of the Public Interest Disclosure Act 2013.
(2) The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.
(3) Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit Court of Australia or Judge.
Three questions arise. The first is whether Mr Haley’s application is a “matter arising under the” FW Act. It is certainly the case that Mr Haley alleges LOA contravened provisions of the FW Act, and he claims relief under s 545 and s 546 of the FW Act for those contraventions. There is no question, therefore, that to this extent Mr Haley’s claims are made under the FW Act. It is also the case, however, that Mr Haley’s claims for relief for breach of contract are claims that he makes under the FW Act. That is because Mr Haley’s claims for breach of contract are based on entitlements he claims to have as an employee under the Employment Contract which are at least arguably “safety net contractual entitlement[s] of a . . . national system employee” within the meaning of s 542 of the FW Act; and under s 543 of the FW Act, a “national system employee may apply to” this Court to enforce that “safety net contractual entitlement”.[18] Even if, however, Mr Haley’s claims based on breach of contract do not fall within s 542 of the FW Act, there can be little doubt that those claims arise out of the same substratum of facts as Mr Haley’s claims based on LOA’s alleged contraventions of provisions of the FW Act and, for that reason, form part of the one “matter arising under” the FW Act before this Court.[19]
[18] See Taylor v Vivacity Engineering Pty Ltd [2019] FCCA 1751, at [21] and [22]
[19] See Taylor v Vivacity Engineering Pty Ltd [2019] FCCA 1751, at [41]-[45]
The second question relates to the Court’s power to award costs in relation to a matter arising under the FW Act. That power is conferred by s 570 of the FW Act which is as follows:
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i) the party unreasonably refused to participate in a matter before the FWC;
(ii) the matter arose from the same facts as the proceedings.
Thus s 80(2) of the FCC Act confers on this Court the power to order an applicant in a matter arising under the FW Act to provide security for the costs the Court may order in the exercise of the power under s 570 of the FW Act.[20] The third question, then, is what principles govern, or ought to govern, the Court’s exercise of the power under s 80(2) of the FCC Act to order an applicant in a matter arising under the FW Act to give security for costs that may be awarded against him or her under s 570 of the FW Act.
[20] At the hearing of the application for security for costs I asked counsel for LOA whether, given s 79(1) of the FCC Act, s 80 of that Act applies to a matter arising under the FW Act, and I gave LOA leave to file written submission on that question. On 12 February 2021 LOA filed submissions titled “Respondent’s Supplementary Submissions on Jurisdiction”. I am satisfied that s 80 of the FCC Act does apply to a matter arising under the FW Act.
At the directions hearing on 17 December 2020, by which time LOA had filed an application in a case for an order that Mr Haley give security for costs, I enquired of counsel for LOA whether any thought had been given to whether and if so in what circumstances the Court can order security for costs given that the Court’s power to order costs in matters arising under the FW Act is regulated by s 570 of the FW Act. Counsel was not in a position to tell me whether LOA had considered that question. At the hearing of LOA’s application for security for costs, however, counsel for LOA referred me to the judgment of Judge Smith in Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics).[21] In that case his Honour ordered that an (unrepresented) applicant in a proceeding brought under the FW Act give security for costs the applicant could have been ordered to pay under s 570 of the FW Act. In determining whether to make an order for security his Honour applied principles that have been developed in the exercise of the power to award security for costs in proceedings where the ordinary rule for costs applies, namely, that costs follow the event.[22] In that context, his Honour considered the prospect of the applicant being ordered to pay costs under s 570 of the FW Act; and his Honour ordered the applicant give security for costs, finding there was “some prospect that there may be a costs order against Mr Nalbandian but that, unlike in other types of litigation, there is no certainty in that respect”.[23]
After I heard LOA’s application in a case I undertook my own research to determine whether the Federal Court has considered the relevance of s 570 of the FW Act to applications for security for costs.[24] That resulted in my becoming aware of the judgments in Augusta Ventures Limited v Mt Arthur Coal Pty Limited.[25] The question in that case was whether the primary judge erred in ordering a litigation funder of a group action brought under the FW Act to give security for the respondent’s costs in circumstances where it was not submitted the action was brought other than reasonably or that it was brought without reasonable cause.[26] When considering that question, White J made a number of observations, with which Allsop CJ and Middleton J specifically agreed,[27] about the purpose of s 570 of the FW Act, and its relevance to whether the Court should order an applicant in a matter arising under the FW Act to give security for costs. White J said (emphasis added):[28]
In my view, a number of implications of present relevance can be drawn from the statutory context of the FW Act, from s 570, and from the rationale which underpins s 570.
First, and perhaps most obviously, the circumstances (if any) in which an applicant in proceedings in relation to a matter under the FW Act should be ordered to provide security for a respondent’s costs are likely to be exceptional. An applicant should not ordinarily be required to provide security for costs which, in the absence of unsatisfactory conduct on his or her part, will never be payable.
Secondly, care should be exercised to ensure that both the terms and rationale of s 570 are not undermined by requiring persons other than the applicant to provide security for a respondent’s costs in a proceeding to which s 570 applies. That would obviously be the case if an order was made that the applicant’s proceeding be stayed or dismissed if the ordered security is not provided. It could hardly be appropriate for a court to order a stay of proceedings until some person other than the applicant has provided security for a respondent’s costs. Related to this is the consideration, explained in the reasons of the Chief Justice, that an order for the provision of security is not like other orders of the Court for payment of a monetary sum. They are not enforceable in the manner of a monetary judgment. Such orders are instead made in the control of the conduct of litigation in the Court. It is rare for an order for security to be made unless accompanied by some consequence in the proceeding.
Thirdly, the policy rationale for s 570 and its effect should not be undermined by indirect means, for example, by an order for the provision of security by a person other than the applicant when it is the applicant who will bear the burden of the provision of the security. The Court should not allow, let alone assist, a respondent to bring about indirectly a situation which would not be permissible by direct means.
Section 570 also gives rise to other implications which are not presently relevant. For example, the costs which a party is required by s 570 to bear personally should not be capable of recovery as a component of damages in a second action brought by that party . . . .
[24] My research consisted of a search on of ““fair work” and “security for costs””. That turned up a number of Federal Court authorities which included Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194
[27] Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194, at [66] (Allsop CJ), and [89] (Middleton J)
[28] Augusta Ventures Limited v Mt Arthur Coal Pty Limited [2020] FCAFC 194, at [126]-[130]
White J further said:[29]
Contrary to the view stated in the final sentence of [77] of the Judge’s reasons, in my respectful opinion the true question was not whether the “protection” afforded by s 570 should “be somehow extended to non‑party funders”. It was instead whether effect could be given to the usual principles on which security is ordered while at the same time preserving the protection s 570 afforded to Mr Turner and respecting its underlying rationale. This required attention to be given to the impact on the beneficiaries of the protection afforded by s 570 of an order that AVL provide security. Respectfully, his Honour did not engage in that exercise.
The question, therefore, that arises on an application in a matter arising under the FW Act that an applicant give security for costs is “whether effect could be given to the usual principles on which security is ordered while at the same time preserving the protection s 570 afforded to [the applicant] and respecting its underlying rationale”. That requires the Court to consider the limits of the protection s 570 of the FW Act confers on an applicant in a matter arising under the FW Act; and that limit is crossed in the circumstances identified by s 570(2) of the FW Act. That means that the circumstances in which the usual principles in which security for costs may be ordered may be considered to be consistent with the protection s 570 of the FW Act affords is where s 570(2) is satisfied, or where there is some tangible prospect that circumstances will arise that will engage s 570(2) of the FW Act.
Before I can even consider whether the usual principles for the granting of security for costs applies to Mr Haley’s claims, therefore, it will be necessary to consider whether s 570(2) of the FW Act applies, or whether there is any tangible prospect that circumstances will arise in which s 570(2) will be engaged in relation to Mr Haley’s claims.
DOES SECTION 570 OF THE FW ACT APPLY OR IS THERE A TANGIBLE PROSPECT IT WILL APPLY?
As a prelude to LOA’s filing its application in a case for an order that Mr Haley provide security for LOA’s costs, on 11 November 2020 its lawyer sent to Mr Haley a letter that included the following statements:
Our client has reviewed your claim as currently pleaded. The claims set out in the Application are misconceived, frivolous, vexatious and without any legal merit. As a consequence, our client will maintain that as currently pleaded your claims have no reasonable prospects of success.
In the circumstances, you are on notice that if the Proceedings are continued, and your claims fail, our client intends to seek a costs order against you in accordance with section 570 of the Fair Work Act 2009 (Cth), that you pay all of our client’s legal costs of and incidental to the Proceedings and any Cross-claim.
Given the very significant legal costs that are likely to be incurred by our client in the defence of your frivolous and vexatious claims, and that you:-
1are not an Australian Citizen;
2you are resident in the UK; and
3you have no assets within Australia,
we are instructed to make an application of [sic] security for costs.
In any such application we will invite the Court to order that the proceedings be stayed until such time as you have deposit into Court, as security for costs, the amount of $150,000.00 (AUD).
There are a number of aspects of this letter that should not pass unnoticed.
(a)At the hearing of LOA’s application for an order for security LOA did not submit Mr Haley instituted the proceeding “vexatiously or without reasonable cause” within the meaning of s 570(2)(a) of the FW Act. Neither LOA nor its lawyers have considered it relevant or appropriate to offer an explanation to the Court or to Mr Haley why in a letter dated 11 November 2020 that is in evidence LOA’s lawyer asserted to Mr Haley that his claims “are misconceived, frivolous, vexatious and without any legal merit”, and yet LOA does not make the same submission in support of its application for security.
(b)It is difficult to understand how it could reasonably have been asserted that Mr Haley’s claims “are misconceived, frivolous, vexatious and without any legal merit” in circumstances where in its counsel’s written submissions LOA accepts that in relation to Mr Haley’s claim based on s 340 of the FW Act “it is open to the Court to find that the Applicant has at least a prima facie case”.[30] It is also difficult to understand how such assertion could reasonably have been made in relation to Mr Haley’s claims based on LOA’s purported summary dismissal of his employment based on serious misconduct. As I will discuss later, there is the question of who bears the onus of alleging and proving an employee engaged in serious misconduct justifying summary dismissal.
(c)Third, the letter refers to the prospect of LOA applying for an order that Mr Haley “pay all of our client’s legal costs of and incidental to the Proceedings and any Cross-claim”. LOA has not filed any cross claim, and it has not indicated that it proposes to file any cross-claim. Neither LOA nor its lawyers have considered it relevant or appropriate to offer an explanation to the Court or to Mr Haley why in a letter dated 11 November 2020 LOA’s lawyers referred to a cross-claim in circumstances where LOA has not filed and has not indicated that it will file a cross-claim.
[30] Respondent’s Outline of Submissions on Security for Costs, [29]
In its counsel’s written submissions LOA submits that although it is open to the Court to find Mr Haley has a prima facie case based on LOA’s alleged contravention of s 340 of the FW Act, Mr Haley’s case “is, nonetheless, not a strong one, particularly when regard is had to the matters pleaded in the Respondent’s defence”. LOA submits that its reasons for deciding to terminate Mr Haley’s employment are pleaded in paragraph 50 of its response, and the “factual circumstances surrounding the Applicant’s dismissal were carefully documented in contemporaneous reports and other written records prepared by the investigator and the Respondent’s employees, which will form part of the Respondent’s evidence in these proceedings”.[31] These submissions merit a number of observations.
[31] Respondent’s Outline of Submissions on Security for Costs, [30]
First, the submissions go no further than an assertion that Mr Haley’s case is not strong. LOA does not submit Mr Haley’s case is one he commenced “vexatiously or without reasonable cause” within the meaning of s 570(2)(a) of the FW Act. Nor does LOA submit that Mr Haley has engaged in any “unreasonable act or omission” within the meaning of s 570(2)(b) of the FW Act. Counsel for LOA did submit, however, that after the respondent files its evidence and the matter is heard, it could later be made apparent that Mr Haley commenced the proceeding vexatiously or without reasonable cause. That is an assertion unsupported by evidence or reasoning. There is nothing on the material before me that is reasonably capable of showing there is some tangible prospect that circumstances will arise that will engage s 570 of the FW Act.
Second, it may be that LOA will be in a position at the hearing to tender documents relating to its dismissal of Mr Haley, and that those documents are comprehensive and persuasive. But LOA has not adduced that evidence for the purpose of this application; and it may be that LOA has no intention of adducing, or at the very least it has not decided whether it will adduce, into evidence some or all of that evidence. The possibility LOA will not or has not decided it will adduce such documents into evidence at the hearing of Mr Haley’s claims arises from the following statements LOA made in its letter to Mr Haley dated 21 July 2020 (emphasis added):
The investigation is subject to legal professional privilege and any documents created for the purpose of the investigation will not be provided to you. This letter does not constitute a waiver of legal professional privilege over those documents.
There is therefore no evidence before me on the basis of which a reasonable assessment can be made of LOA’s prospects of proving that it decided to terminate Mr Haley’s employment for the reasons it says it did, or that Mr Haley engaged in the misconduct alleged in LOA’s letter dated 24 July 2020.
Further, it is apparent that Mr Haley contests many of the facts on which LOA apparently intends to rely, and Mr Haley relies on a number of allegations himself. Mr Haley claims Mr Rose relied on an illegal audio recording; he claims he was not given a right to respond to the complaints Mr P and Mrs P made; he claims his words on an audio recording on which Mr Rose relied are not audible to the naked ear; he claims there is one witness who corroborates one aspect of the Incident about which LOA claims Mr Haley told a lie; Mr Haley claims he had made a number of complaints to LOA about matters not related to the Incident; and he claims he made complaints in relation to the process LOA initiated to investigate the complaint Mr P and Mrs P made. These may or may not be relevant to whether the Court should find LOA decided to summarily dismiss Mr Haley’s employment; but to the extent they are held to be relevant the Court will need to make findings about them before it can adjudicate whether LOA decided to summarily dismiss Mr Haley for the reasons it says it did or adjudicate on the facts constituting misconduct on which LOA relied for summarily dismissing Mr Haley.
Third, LOA’s submissions do not engage or at least fully engage with Mr Haley’s claims based on what he alleges was LOA’s unjustified summary dismissal of his employment. There is at the very least a question about whether LOA bears the legal burden of proving that Mr Haley engaged in the misconduct LOA in its letter dated 24 July 2020 alleges Mr Haley engaged in,[32] and, assuming LOA bears the burden of proving Mr Haley engaged in that misconduct, whether LOA has alleged or sufficiently identified in its response the misconduct on which it relies and has provided sufficient particulars to support any such allegation. Counsel for LOA submitted that LOA relies on the matters stated in LOA’s letter dated 24 July 2020 to Mr Haley. That letter alleges Mr Haley had acted dishonestly by lying. If LOA intends to rely on an allegation or allegations that Mr Haley lied and it relied in a material respect on Mr Haley’s lying when deciding to summarily terminate his employment, there may be a question whether LOA has alleged sufficient facts and particulars to properly raise an allegation of dishonesty.
[32] See, for example, Blyth Chemicals Ltd v Bushnell (1933) 49 CLR 66, at pages 82-83
CONCLUSION
I am not satisfied, on the evidence before me, that s 570(2) of the FW Act applies to Mr Haley’s claims in this proceeding, or that there is any tangible prospect that circumstances will arise in which s 570(2) of the FW Act will be engaged in relation to Mr Haley’s claims. I am therefore not satisfied that effect could be given to the usual principles on which security for costs is ordered, being the principles on which LOA relies, while at the same time preserving the protection s 570 affords to Mr Haley and respecting the rationale of s 570 of the FW Act. For that reason LOA’s application that Mr Haley give security for costs should be dismissed, and I propose to so order.
If, however, I were to have applied the usual principles on which security for costs is ordered, I would have been satisfied that Mr Haley’s being a foreign resident would have engaged this Court’s jurisdiction to order Mr Haley to give security for costs; but I would have exercised my discretion against so ordering. The principal reason would have been Mr Haley’s having pleaded an arguable case both in relation to his claims based on an alleged contravention of s 340 of the FW Act and in relation to his claim that LOA summarily dismissed him from his employment without justification; but LOA not having adduced evidence on the basis of which some rational assessment could be made about its prospects of succeeding in establishing affirmative matters it will arguably have to establish if it is to defeat Mr Haley’s claims based on LOA’s alleged contravention of s 340 of the FW Act and LOA’s alleged unjustified summary dismissal of his employment.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 19 February 2021
- AGLC
- Haley v Laing O'Rourke Australia Management Services Pty Ltd [2021] FCCA 257
- Case
- [2021] FCCA 257
- Decision Date
CaseChat Overview and Summary
The central legal issue before the Court was whether the usual principles for granting security for costs should apply to matters arising under the *Fair Work Act 2009* (Cth), particularly in light of section 570 of that Act. Section 570 of the *Fair Work Act* provides that the usual rules regarding security for costs do not apply to proceedings under the Act unless the court is satisfied that it is necessary for the protection of the respondent. The Court was required to determine if applying the standard security for costs rules in this specific case would undermine the protection afforded by section 570 and its underlying rationale.
Judge Manousaridis reasoned that the usual principles for security for costs should only be applied in *Fair Work Act* matters where the protection provided by section 570 and its rationale can be preserved. The Court found that in the circumstances of this case, applying the usual rules would not preserve the protection afforded by section 570 to Mr. Haley or respect its underlying rationale. Consequently, the application for security for costs was dismissed.
Orders
Orders of the court
The respondent’s application in a case that the applicant give security for costs is dismissed.
Background
Background to the litigation
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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