Heslop v Sydney Hair Design College Pty Ltd

[2010] FMCA 268

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HESLOP v SYDNEY HAIR DESIGN COLLEGE PTY LTD [2010] FMCA 268

INDUSTRIAL LAW – PRACTICE & PROCEDURE – Application for costs under s.570 Fair Work Act – where proceeding discontinued after first directions hearing.

Fair Work Act 2009 (Cth), s.570

Dowling v Fairfax Media Publication Pty Ltd (2009) FCA 339

Applicant: FIONA JANE HESLOP

Respondent: SYDNEY HAIR DESIGN COLLEGE PTY LTD

File Number: SYG 36 of 2010

Judgment of: Raphael FM

Hearing date: 13 April 2010

Date of Last Submission: 13 April 2010

Delivered at: Sydney

Delivered on: 13 April 2010

REPRESENTATION

Solicitors for the Applicant: Christo & Civil Lawyers Pty Ltd

Solicitors for the Respondent: Unsworth Legal

ORDERS

1. Application for costs dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 36 of 2010

FIONA JANE HESLOP

Applicant

And

SYDNEY HAIR DESIGN COLLEGE PTY LTD

Respondent

REASONS FOR JUDGMENT

1. There comes before me an application under s.570 of the Fair Work Act 2009 (Cth) (the “Act”) for payment by the original applicant of the respondent’s costs in a proceeding which commenced by the filing of a claim under the Act on 11 January 2010 but which was discontinued by notice of discontinuance filed on 8 February 2010 following a directions hearing in this Court.

2. The provisions of s.570 deal with payment of costs;

   “(1)  A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction 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.

   Note:   The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 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 FWA;

   (ii) the matter arose from the same facts as the   proceedings.”

3. The respondent argues that these proceedings were commenced without reasonable cause because, he says, they proceeded on the basis that the applicant was dismissed by reason of her pregnancy when it is alleged that the principal of the respondent company did not know that the applicant was pregnant. Mr Mortimer, who appears for the respondent, adds that, to the extent that the applicant might have had an independent claim for unfair dismissal, this could not be brought in the Court because the applicant’s annual salary of $113,400.00 was in excess of the statutory limit for bringing such proceedings under the Act.

4. There is a dispute between the parties surrounding the dismissal. The applicant claims that she believed that she was dismissed by reason of her pregnancy. The respondent argues she was not dismissed by reason of her pregnancy but because of an alleged submission of a falsified invoice for payment. The applicant appears to have been unaware that proceedings in this Court can have added to them other matters where the Court has associated or accrued jurisdiction and thus it may well have been possible for the whole proceeding to have been heard here. But in the absence of that knowledge, she decided at a very early stage to file a notice of discontinuance and to commence proceedings in the Local Court where she believes she could claim not only a breach of contract because she was not consulted about the allegations made against her but also certain amounts of back pay which she claims that she is owed.

5. The respondent has helpfully provided me with a copy of a decision of Moore J in Dowling v Fairfax Media Publication Pty Ltd (2009) FCA 339 where his Honour deals at [52 – 54] with an application for costs. His Honour says at [52]:

   “In answering the question posed by section 824(1) [a section similar in form to section 570] I am required to undertake a qualitative assessment of the proceeding in its entirety focusing, of course, on the party that “instituted the proceeding” (see Australian Workers’ Union of Employees, Queensland v Etheridge Shire Council (2) (2009 FCA 58 [27]) per Spender J.”

6. This extract from his Honour’s judgment points out the difficulties I have.  This not a case that I have tried.  I do not know whether it is correct to say that the respondent, through its managing director, did not know that the applicant was pregnant.  The applicant’s solicitor tells me that everybody in the salon knew.  I do not know whether the applicant deliberately submitted a false invoice and, as things stands, I never will.  I think that, in the particular circumstances of this case, I must look at the application itself to decide the difficult question of whether or not the proceeding was commenced without any reasonable prospects of success.

7. I cannot say that.  It would appear to be accepted that the applicant was pregnant at the time of her dismissal.  There also seems to be a general acceptance that the applicant was not told about the concern expressed by the respondent in relation to the invoice upon her dismissal.  It also appears to be accepted that the applicant was not questioned about the invoice prior to her dismissal and, therefore, it was possible for her to say that she believed that the real reason for her dismissal was her pregnancy.

8. In the absence of any evidence which would clearly indicate that the proceedings were vexatious or that the applicant had no good reason to believe that they had any prospects of success, I believe that the principles set out at s.570 should apply and that no order for costs should be made.

I certify that the preceding eight (8) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate: 

Date:  16 April 2010