Hsiao-Chen Chin v The Paradise Fruits Unit Trust
[2024] FWC 2205
•21 AUGUST 2024
| [2024] FWC 2205 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365—General protections
Hsiao-Chen Chin
v
The Paradise Fruits Unit Trust
(C2024/4389)
| DEPUTY PRESIDENT DOBSON | BRISBANE, 21 AUGUST 2024 |
Application to deal with contraventions involving dismissal
This decision relates to an application by Mr Hsiao-Chen Chin (the Applicant) pursuant to s.365 of the Fair Work Act2009 (Cth) (Act) against his former employer, The Paradise Fruits Unit Trust (the Respondent) filed on 28 June 2024.
There are two parts to this decision. The first part deals with both an application to dismiss by the Respondent and with consideration to dismiss on its own initiative by the Commission. The second part deals with an application for costs brought by the Respondent in the matter.
Background
On 15 July 2024, I issued directions for the filing of material. The directions included both the date and time for the determinative conference/hearing and a requirement that the Applicant file material by no later than 4:00pm (AEST) on 29 July 2024. Following an extension request from the Respondent, the Directions were amended requiring Mr Chin to file his material by 6 August 2024. Mr Chin failed to comply with this direction.
On 8 August 2024, the Respondent contacted Chambers to enquire whether Mr Chin had filed his material as directed. The following day my Chambers wrote to Mr Chin as follows:
“Dear Mr Chin
Directions were issued on 23 July 2024.
Paragraph [2] of the Directions required you to file your material by no later than 6 August 2024. At the time of writing, no materials have been filed as directed and there has been no request for an extension to file submissions. Accordingly, the Deputy President directs you to provide your material, accompanied by an explanation for your apparent failure to comply with the directions by no later than 4:00pm AEST on 12 August 2024.
In the absence of any material filed by the Applicant, the matter may be determined without further reference to them, and the Commission will consider dismissing the application pursuant to s.587 of the Fair Work Act 2009, with the application having not been made in accordance with the Act. Any decision by the Commission must be published on the public website.”
No response was received from Mr Chin.
On 13 August 2024, the Respondent applied to the Commission pursuant to ss.587(1)(a) and 611(2) of the Act.
The Respondent set out the grounds upon which they sought to rely to dismiss Mr Chin’s application submitting that the Application was made vexatiously and without reasonable cause or prospects of success, the Respondent further submitted that Mr Chin’s non-compliance caused them prejudice.
My Chambers wrote to Mr Chin on 15 August 2024, noting that he had not responded to the previous correspondence from Chambers as follows:
“Dear Mr Chin
It is noted that we did not receive a response to our correspondence. It is the Deputy President’s current view that your general protections application should be dismissed under s 587 of the Fair Work Act 2009 (Cth) on the basis that you are not prosecuting your claim. The Respondent has also formally requested that the matter be dismissed using the attached Form F1. Furthermore, the Respondent has also applied to the Commission for orders that you pay their legal costs pursuant to s.611(2).
Please provide a response to the Respondent’s application that your general protections application be dismissed by 4:00pm (AEST/QLD) 16 August 2024. You must also provide a response to the Respondent’s application that you pay their costs.
Further, if you wish to proceed with your general protections application, you must make contact with us by 4:00pm (AEST/QLD) 16 August 2024. If we do not hear from you by that time, your general protections application may be dismissed without further notice to you. You may contact us by email ([email protected]).
I note that if you do not discontinue your application and the Commission dismisses it because you are not pursuing your application, a publicly available decision must be published on the Fair Work Commission website.
Alternatively, if you do not wish to proceed with your application you can inform us, by reply email, that you wish to discontinue your application.”
On that same day, Mr Chin contacted Chambers by email as follows:
“So, does this mean that the other party hired a lawyer to claim they had no knowledge of employing me and subsequently terminated me after just one day due to my disability? Even after I clarified that I had successfully worked on similar farms performing the same type of work, it wasn’t the farm owner who made the decision to terminate me, but rather the employment agency that hired me, even though they would have been able to earn an income when I continued working on the farm? And because it wasn’t technically the farm that terminated me, they bear no responsibility for the situation?
Furthermore, the farm is now asking me to cover their legal fees for hiring a lawyer?”
Mr Chin’s response fails to address any of the issues he was directed to respond to and fails to file the material sought in directions issued on 23 July 2024.
Again, on the same day, my Chambers wrote to the Applicant in response as follows:
“Dear Mr Chin,
The Respondent has engaged Park Co Lawyers to represent them in response to your application. They will need to seek permission to appear at any proceeding before the Commission but are not required to seek leave for them to file material.
You have failed to comply with the directions of the Commission on two occasions. You failed to file your material as directed, and then failed to respond to the Commission by 4:00pm AEST 12 August 2024. The Respondent is seeking that the Commission dismiss your application and to make orders that you pay their legal fees.
There is more information regarding cost’s applications on the Fair Work Commission website - Costs | Fair Work Commission (fwc.gov.au).
You must provide the material that has been directed, accompanied by evidence to explain your failure to comply by no later than 4:00pm AEST on 16 August 2024 (today).
Alternatively, if you do not wish to proceed with your application, you may advise as such by email to Chambers or by filing a Form F50”
No response from Mr Chin was received by my Chambers at the time of writing this decision. The Applicant also failed to file the material as directed.
Part 1 – Application to Dismiss and Consideration to Dismiss on the Commission’s own initiative
Section 587 of the Act is as follows:
“587 Dismissing applications
(1) Without limiting when the FWC may dismiss an application, the FWC may dismiss an application if:
(a) the application is not made in accordance with this Act; or
(b) the application is frivolous or vexatious; or
(c) the application has no reasonable prospects of success.
Note: For another power of the FWC to dismiss an application for a remedy for unfair dismissal made under Division 5 of Part 3 2, see section 399A.
(2) Despite paragraphs (1)(b) and (c), the FWC must not dismiss an application under section 365 or 773 on the ground that the application:
(a) is frivolous or vexatious; or
(b) has no reasonable prospects of success.
(3) The FWC may dismiss an application:
(a) on its own initiative; or
(b) on application.”
I have considered the Respondent’s application of 13 August 2024 pursuant to s.587(1)(a) of the Act. I am satisfied that the Applicant’s application was made in accordance with the Act. On that basis I dismiss that aspect of the Respondent’s application of 13 August 2024. I will deal with the Respondent’s application for costs pursuant to s.611(2) later.
I note that Act does not limit the reasons when the FWC may dismiss an application[1] and further that an application made under s.365 may not be dismissed on the basis it is frivolous or vexatious,[2] nor because it has no reasonable prospects of success.[3] In considering further whether the Applicant’s application should be dismissed on the initiative of the FWC,[4] I am satisfied that the Applicant unreasonably failed to comply with the requirement to file his materials in accordance with the directions. I consider that the failure was unreasonable for the following reasons:
(A)The Applicant has repeatedly failed to offer any reasonable explanation for his failure to comply with the directions.
(B)I consider that the Applicant has been afforded multiple reasonable opportunities to redress his non-compliance but has failed to do so.
My discretion to dismiss the Applicant’s general protections application under s.587 ‘(3)(a) has been enlivened. I consider it appropriate to exercise the discretion in this case. I take into account the failure of the Applicant to provide a reasonable explanation for his failure to comply with my directions, and his repeated failure to file materials. Further, Mr Chin has failed to respond to communications from my Chambers and failed to provide an explanation for his non-compliance with directions of the Commission.
Conclusion as to the dismissal of the Substantive Application
For these reasons, I consider that it is appropriate to dismiss the Applicant’s application under s.587(3)(a) for want of prosecution. Pursuant to s.587(3)(a), the Applicant’s general protections application is dismissed.
Part 2 – Application for Costs by the Respondent
Application for costs
On 13 August 2024, the Respondent filed an application for costs pursuant to s.611(2) of the Act. My Chambers wrote to the Applicant on two separate occasions on 15 August 2024 giving the Applicant an opportunity to respond to this application for costs. The preceding paragraphs of this decision note the Applicant responded to part of the first correspondence and failed to respond to the second correspondence at all. The Applicant did not make any submissions at all in respect of the costs application and nor has the Applicant done so since.
Relevant Legislation s.611
Section 611, begins by stating that parties must bear their own costs. It provides for exceptions, relevantly outlining:
“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).”
Principles relevant to s.611
The provisions of the Explanatory Memorandum to the Fair Work Bill 2009 which relate to the clause that was to become s.611 stated:
“2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospect of success.”
(emphasis added)
Thus subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before Fair Work Australia (FWA). However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. When FWA is satisfied that a prescribed circumstance exits, FWA is provided with a discretion to require a party to bear some or all of the costs of another party.
In Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (Church),[5] the Full Bench considered the approach to be taken in determining whether proceedings have been instituted vexatiously or without reasonable cause. With Rocla ultimately not submitting that Mr Stock made his unfair dismissal application vexatiously, it is only necessary to consider what the Full Bench outlined in relation to the expression ‘without reasonable cause’:
“A party cannot be said to have made an application ‘without reasonable cause’, within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful. The test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union, Wilcox J put it this way:
“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”[6] (References omitted)
In Church, the Full Bench outlined principles to be applied in deciding whether an application has been made without reasonable cause. These were summarised in Keep v Performance Automobiles Pty Ltd (Keep),[7] as follows:
“The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter[sic] Health Great Health and Wellbeing (Church). Church is authority for the following propositions:
(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.
(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.
(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.
(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’.”[6]
As to s.611(2)(b), the issue I have to determine is whether I am satisfied that in all the circumstances it should have been reasonably apparent to Mr Chin that his application had no reasonable prospect of success. In Keep, the Full Bench also summarised the principles relevant to s.611(2)(b) of the Act, outlining:
“As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that “it should have been reasonably apparent” to that person that their application had ‘no reasonable prospect of success’. The expression “should have been reasonably apparent” in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.”
There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had “no reasonable prospects of success”. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;
“unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available”.”[9] (references omitted)
The Full Bench in Baker v Salva Resources Pty Ltd[10] summarised the principles to apply in deciding whether an application has been made without reasonable prospects of success as follows:
“The concepts within s.611(2)(b) ’should have been reasonably apparent’ and ‘had no reasonable prospect of success’ have been well traversed:
· ‘should have been reasonably apparent’ must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
· a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”[11]
More recently, when considering the meaning of s.611(2)(b), despite referencing it as s.611(1)(b), the Full Bench in Health Services Union – Victoria No.1 Branch v Sanli[12] stated:
“The observations of the High Court in Spencer v The Commonwealth as to the meaning of the expression ‘no reasonable prospect’ in s.31A of the Federal Court of Australia Act 1976 (Cth) (the Federal Court Act), are apposite to the matter before us:
‘In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like “clearly”, “manifestly” or “obviously”) as “frivolous”, “untenable”, “groundless” or “faulty”. But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word “reasonable”, in the phrase “no reasonable prospect”, be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a “frivolous”, “untenable”, “groundless” or “faulty” claim.
Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.’
Section 31A of the Federal Court Act is a power to enter summary judgment and accordingly is not directly relevant to the matter before us. However, the High Court’s observation (in Spencer) that full weight must be given to the expression as a whole and that descriptors such as ‘frivolous’, ‘untenable’, ‘groundless’ or ‘faulty’ do not provide a sufficient chart of the metes and bounds of the power, are also applicable to s.611(1)(b).”[13] (references omitted)
Submissions of the Respondent
The Respondent filed submissions with the costs Application in the Commission on 13 August 2024 in its form F1 application for costs.
The Respondent submitted that the Applicant had failed to follow the Commissions directions in filing and serving its submissions in relation to the jurisdictional objection made by the Respondent, by no later than 4:00pm on 6 August 2024. The Respondent submitted that the Applicant failed again to file and serve submissions or an explanation for his non-compliance as set out in paragraphs [7] – [9] of this decision. The Respondent claims that they were prejudiced by the application and the Applicant’s non-compliance although they didn’t go on to say how. The Respondent also submitted that the “application was made vexatiously and without reasonable cause and that it should have been reasonably apparent to the Applicant that the application had no reasonable prospect of success.”
Submissions of the Applicant
The Applicant did not file any submissions in response.
Consideration
The costs application was made simultaneously with its application for dismissal of the matter and before the Commission determining the matter on 20 August 2024.[7]
The grounds for seeking costs are set out at paragraph [27] of this decision.
Having had regard to the Applicant’s submissions and the case history, I am not satisfied that the threshold set out in the relevant authorities has been met for me to make a costs order.
I note that the Respondent obtained legal representation prior to leave being granted by the Commission for the Respondent to be legally represented.
I am not satisfied to the level required, that the Applicant made the claim “vexatiously or without reasonable cause”[8] or that “it should have been reasonably apparent … (that the Applicant) had no reasonable prospect of success, [9] particularly given that the at this early stage of the matter, scant material has been filed that would enable me to make any proper assessment of such critically important issues. Further, again given the very early stage at which the matter has now come to an end, the low costs jurisdiction in which the application has been brought and the relevant legal authorities, I don’t accept the degree of prejudice to the Respondent overcomes these factors.
Conclusion
For the reasons outlined above, the application for costs made by the Respondent is dismissed.
DEPUTY PRESIDENT
[1] Fair Work Act 2009 (Cth) s.587(1).
[2] Ibid s587(2)(a).
[3] Ibid s587(2)(b).
[4] Ibid s.587(3)(a).
[5] [2014] FWCFB 810.
[6] [2014] FWCFB 810.
[7] Ibid s.402.
[8] Ibid s.611(2)(a).
[9] Ibid s.611(2)(b).
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