Inna Grabovsky v United Protestant Association of NSW Ltd T/A UPA

[2019] FWC 6318

[2019] FWC 6318

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Inna Grabovsky
v
United Protestant Association of NSW Ltd T/A UPA
(C2017/7037)

COMMISSIONER JOHNS SYDNEY, 11 SEPTEMBER 2019

Costs application.

[1] This decision is about whether Mrs Inna Grabovsky should be held liable for the costs of United Protestant Association of NSW Ltd T/A UPA (UPA/Respondent) which it incurred in defending an action commenced by Mrs Grabovsky (Grabovsky Application).

[2] On 5 December 2018 the Fair Work Commission (Commission), as presently constituted, issued a decision dismissing the Grabovsky Application (s.739 Decision). 1

[3] The Grabovsky Application was commenced on 20 December 2017 by Mrs Grabovsky pursuant to s.739 of the Fair Work Act 2009 (FW Act) in relation to an alleged dispute under The UPA NSWNMA and HSU NSW Enterprise Agreement 2014-2017 (2014 Agreement).

[4] In making the application Mrs Grabovsky was assisted by her husband, Mr Igor Grabovsky. In point of fact, the entirety of the Grabovsky Application (and all of the litigation that has been conducted in front of me on behalf of Mrs Grabovsky) was conducted by Mr Grabovsky. At no time has Mrs Grabovsky been present in the Commission. Mr Grabovsky has conducted all of the litigation as his wife’s representative pursuant to a Power of Attorney signed by her on 7 July 2014. This fact is relevant to the ultimate discretion I have in deciding whether to grant the application for costs. I say something more about this below.

[5] On 24 August 2018 an application to dismiss the Grabovsky Application was made by the Respondent. The UPA is a not for profit operator of residential aged care facilities.

[6] In the s.739 Decision I dismissed the Grabovsky Application pursuant to s.587 of the FW Act because the application had no reasonable prospects of success. I held that,

[43] As is apparent from comparing the classification structures in the 2011 Agreement and the 2014 Agreement, that they are substantially the same. Consequently, noting that the events complained about occurred during the currency of the 2011 Agreement there is nothing new in the evidence that would justify a reconsideration of the matters decided by Vice President Lawler (a decision not disturbed on appeal).

[44] For these reasons, the Commission, as presently constituted, is satisfied that principles akin to res judicata ought to be applied and, consequently, the application in C2017/7037 in so far as it is based on a dispute about Mrs Grabovsky’s classification must be dismissed.

[45] Because principles akin to res judicata apply I am further satisfied that the application should be dismissed on the basis that it has no reasonable prospects of success under s.587(1)(c) of the FW Act.

[7] In its Form F1 application to the Commission the Respondent also sought an order that,

“the Applicant pay the Respondent’s costs on the basis that the [original] application in matter no: C2017/[7037] has been commenced and maintained vexatiously or without reasonable cause pursuant to s.[587] of the Act.”

(Costs Application)

[8] The s.739 Decision was the subject of an appeal.

[9] On 26 March 2019 the Full Bench refused permission to appeal 2 (Appeal Decision). The Full Bench held that,

[25] We find in the Commissioner’s decision no appealable error. The decision is not attended with doubt, nor is there any other consideration that would support the grant of permission to appeal.

[10] That is to say, in holding that there was no appealable error in the s.739 Decision, the Full Bench did not disturb my finding that Mrs Grabovsky’s s.739 application had “no reasonable prospects of success”.

[11] The Full Bench also observed that,

[28]…there is presently before Commissioner Johns, awaiting the outcome of this appeal, an application by UPA under s 611 of the Act seeking costs against the applicant, on the basis that the 2017 Application was made vexatiously or without reasonable cause. In the last paragraph of his decision, the Commissioner stated that UPA might like to consider the utility of pursuing its application for costs. Statements from members discouraging parties from seeking costs are generally to be avoided. Each application for costs is to be earnestly and carefully considered on its merits in accordance with the Act. Section 611 serves an important purpose in the legal framework governing the Commission’s dispute resolution function. The prospect of costs being awarded against a party under section 611 in an appropriate case should deter the types of unmeritorious proceedings with which that section is concerned.

[12] Once the appeal had been dispensed with it was necessary to program the Costs Application for hearing.

[13] On 3 April 2019 I conducted a mention/directions hearing. I asked the Respondent whether it pressed the Costs Application. 3 It confirmed that it did.4 Mr Grabovsky submitted that it was premature to deal with the costs application because he was making an application under s.602 of the FW Act to the Full Bench in respect of its appeal decision.5 I indicated that unless a Full Bench issued a stay in the matter I intended to proceed with the programming of the Costs Application.6 On 4 April I issued Directions programming the Costs Application for hearing on 22 May 2019. The hearing date was later amended to 25 June 2019.

[14] On 15 April 2019 Mr Igor Grabovsky filed an application by Mrs Grabovksy under s.602 of the Act seeking that the Full Bench correct various purported ‘obvious errors, defects or irregularities’ in Appeal Decision.

[15] On 27 May 2019 the Full Bench held that,

[4] As should be clear from the terms of s.602 and as the Explanatory Memorandum to the Fair Work Bill 2008 makes clear, s.602 is intended to be a statutory analogue for the ‘slip rule’ used by superior courts to correct certain errors in orders. We do not consider the Decision to be affected by any obvious errors, defects or irregularities amenable to correction under s.602 of the Act. The application is therefore dismissed.

[5] If Mrs Grabovksy is aggrieved by the Decision or by this decision she may seek judicial review in the Federal Court of Australia.

[6] We do not propose to engage further with Mrs Grabovsky or Mr Grabovksy about either decision. 7

[16] The Costs Application was heard on 25 June 2019. The Applicant was represented by Mr I Grabovsky. The Respondent was represented by Mr S Puxty of Cantle Carmichael Legal. I had previously granted the Respondent permission to be represented. 8 That decision was appealed. The Full Bench refused permission to appeal.9

[17] Prior the hearing the parties filed and served materials in relation to the Costs Application. At the hearing the following exhibits were received:

EXHIBIT NO.	DESCRIPTION
1	Costs Submission of the Cost Applicant (i.e. the UPA/Respondent) dated 23 April 2019
2	Submissions of the Costs Respondent (i.e. Mrs Grabovsky) dated 8 May 2019
3	Form F6 Application for Costs from the UPA dated 17 May 2019
4	Additional submissions of the Costs Respondent (i.e. Mrs Grabovsky) dated 17 June 2019
5	Further submissions of the Costs Respondent (i.e. Mrs Grabovsky) dated 24 June 2019

[18] As a part of the F6 the UPA claimed the following costs:

Item No.	Date	COSTS Description of work done	Amount
1.	08.08.18	Item 201 – Form F53 Notice of appearance	$115.00
2.	20.08.18	Items 601 – Peruse application for Interim	$76.00
3.	23.08.18	Orders lodged by Applicant: 18 folios	$160.00
4.	23.08.18	Item 301 – Drafting Application under s587 – 20 folios	$60.00
5.	04.09.18	Item 1102 – preparing supporting documents for Application under s587 – 30 minutes	$185.00
6.	07.09.17	Item 204 – Observations to counsel – 1870 words 18 folios	$80.00
7.	11.09.18	Item 301 – Prepare written submissions in response to application for Interim Orders 10 folios	$270.00
8.	13.09.18	Item 1108 – Attendance in telephone conversation with counsel – 1hr 15 mins	$93.00
9.	17.09.18	Item 1108 – Attendance in telephone conversation with counsel – 24 mins	$135.00
10.	Item 1109 – Attendance in conference with counsel (one hour)	$1,049.75
11.	21.09.18	Item 1109 – Attendance at hearing (10:00am to 2:43pm)	$64.00
12.	05.12.18	Item 601 – Perusal of documents from Applicant’s representative requesting practitioners be reported - 15 folios	$135.00
13.	03.04.18	Item 601(b) – Perusal of Judgement – in excess of 30 folios	$221.00
14.	24.04.18	Item 1109 – Attendance in court to make application under s611 Item 202 – Drafting Submissions re: 611 -20 folios	$195.00
15.	24.04.18	Item 202 – Drafting Form F6 – 20 folios	$195.00
16.	17.05.19	Item 1201 – General care and skill having regard for all matters relevant under this item, including the complexity of this matter and the difficulty of the s587 application, the consideration of the voluminous materials reviewed and relied upon in support of the application	$5,000.00

Costs and Disbursements	Amount claimed	Amount taxed and allowed
Total costs Total disbursements Item 1301 – Counsel fees – Andrew Gotting (see attached invoice) Total costs and disbursements GST	$8,033.75 $17,000.00 $25,033.75 $2,503.37 $27,537.12

Cost Principles

[19] People who incur legal costs in a matter before the Commission generally pay their own costs. 10 However, in a s.739 matter such as the present matter, the Commission has a discretion to order one party to the matter to pay the other party’s legal or representational costs, but only where the Commission is satisfied the matter was commenced:

a) vexatiously or without reasonable cause, or

b) with no reasonable prospect of success. 11

Legislation

[20] Section 611 of the FW Act is as follows:

“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).”

Submissions

[21] The UPA submitted that,

“Background

3. The Proceedings were commenced by Mrs Grabovsky on 20 December 2017 and alleged misclassification of the Applicant’s work activities (and an underpayment claim) as well as contending that the Workplace Management and Dispute Resolution Procedures within the Respondent’s Enterprise Agreement were unlawful.

4. On 24 August 2018, the Respondent made an application to dismiss the present proceedings pursuant to s587 of the Act.

5. Following a hearing on 17 September 2018, Commissioner Johns dismissed the application. 12

6. In relation to the misclassification claim, the Commissioner held:

“that the application should be dismissed on the basis that it has no reasonable prospects of success under s587(1)(c) of the FWA.” 13

7. In relation to the workload management issue in the Proceedings, Commissioner Johns dismissed the workload management dispute and held:

“It has no reasonable prospects of success’’ 14.

8. Mrs Grabovsky’s application for Interim Orders was also dismissed.

9. The Decision was upheld by the Full Bench in dismissing the application for leave to appeal brought by Mrs Grabovksy 15.

10. The Respondent now makes application for an order for costs pursuant to s611(2).

11. Relevantly, in responding to the Proceedings, the Respondent has been put to the expense of:

(a) making an application for permission to be represented by a lawyer or paid agent which was contested by the applicant and required an evidentiary hearing;

(b) engaging legal practitioners to draft and file an application to dismiss the Proceedings and prepare written submissions; and

(c) engaging legal practitioners to appear at the hearing on 17 September 2018.

Section 611(2) of the Act

12. Section 611(2) of the Act is in the following terms:

…

13. The Respondent’s submits that the Applicant’s application was made without reasonable cause within the meaning of s611(2)(a).

14. In Keep -v- Performance Automobiles Pty Limited (Keep), the Full Bench set out the key principles established in Church -v- Eastern Health t/as Eastern Health Great Health and Wellbeing 16  (Church):

“i. The power to order costs pursuant to s611(2) should be exercised with caution only in a clear case.

ii. A party cannot be said to have made an application ‘’without reasonable cause’’ within the meaning of s611(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 by the applicant at the time of instituting the proceedings, there was no substantial prospect of success.

iv. The test imposed by the expression ‘’without reasonable cause’’ is similar to that adopted for summary judgement, that is, ‘’so obviously untenable that it cannot proceed’’ ‘’manifestly groundless’’ or ‘’discloses a case which the Court is satisfied cannot succeed”. 17

15. In applying the principles in Church to the Proceedings:

(a) the Proceedings were dismissed under s587 for having no reasonable prospects of success;

(b) the Proceedings sought to re-litigate claims previously determined; and

(c) there was nothing new in the evidence submitted by Mrs Grabovsky in the Proceedings that required a reconsideration of the matters already determined 18. From the time they were commenced, the Proceedings could never succeed.

16. In applying the principles advanced in Church, the Proceedings were made “without reasonable cause” within the meaning of s611(2)(a).

Submissions under s611(2)(b)

17. As set out in Keep:

“As to s611(2)(b), the Commission 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 s611(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 conclusions that an application had ‘’no reasonable prospects of success’’. In Dean 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 s170CJ(1) of the Workplace Relations Act 1966:-

“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 s170CJ(1) is not fulfilled and the discretion to make an order for costs is not available” 19.

18. In the Proceedings, the Commission has held that Mrs Grabovsky sought to relitigate previously determined matters and did not seek to rely on new or different evidence.

19. In applying the objective test as reference in Church, at the time the Proceedings were commenced, Mrs Grabovsky knew that:

(a) DP Booth had already determined that the Commission had no jurisdiction to hear any such dispute without the consent of the Respondent (a decision affirmed on appeal);

(b) the Respondent did not consent to the Commission determining the workload management dispute;

(c) VP Lawler had already determined that misclassification issue and she was not introducing any new or different evidence for consideration in the Proceedings; and

(d) she had never performed worked for the Respondent during the life of the 2014 Enterprise Agreement 20.

20. Therefore it is submitted that it was “reasonably apparent” to a reasonable person that at the time that the Proceedings were commenced, they had no reasonable prospects of success. That position did not change by the time that the Respondent’s application was considered under s587.

Exercise of Discretion by Commission

21. The application of s611(2) requires the exercise of discretion on the part of the Commission.

22. The Respondent submits that the Commission ought to exercise discretion to award costs pursuant to s611 in the present circumstances.

23. The High Court considered the exercise of discretion in Coal & Allied Operations Pty Ltd –v- Australian Industrial Relations Commission:

“discretion’’ is a notion that ‘’signifies a number different legal concepts’’. In general terms it refers to a decision making process in which ‘’no one [consideration] and no combination of [considerations] is necessarily determinative of the result. Rather, the decision maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow, where, for example, the decision maker is required to make a particular decision if he or she forms a particular opinion or value judgement’’ 21.

24. In considering the Applicant’s appeal against the Decision, Full Bench made the following observations about the Proceedings:

“Cases where an applicant seeks to re-run in the Commission an application, the substance of which has already been heard and determined, fall for consideration under s587, either on the Commission’s own motion or on application by a party. The Commission must afford an Applicant in any matter natural justice, but the content of natural justice depends on the circumstances. The finite resources of the Commonwealth are not to be unreasonably diverted by parties who cannot accept that their claims have been unsuccessful and who seek to resubmit them to the Commission. It is unfair for the opponents to be entangled in repetitive litigation. And parties in other matters deserve their turn to be heard.” 22

and

“The full Federal Court in Miller, speaking of abuse of process, warned of the danger that ‘’persistent or unattractive litigants with awkward cases’’ might be refused access to judgement if too broad an approach were adopted to staying actions which are ‘’somewhat like a previous proceeding’’. The 2017 application was not such a case.” 23

and

“…the prospect of costs being awarded against a party under s611 in an appropriate case should deter the types of unmeritorious proceedings with which that section is concerned’’. 24

25. The Applicant has failed to provide any justification for commencing and maintaining the Proceedings. The Commission has found that the Applicant has sought to relitigate matters that had already been determined and proceeded to dismiss the Proceedings under s587 of the Act.

26. Further, it is submitted that the Full Bench’s observations about the operation of s611 in deterring unmeritorious proceedings 25 are compelling. Whether the Commission is satisfied that the Proceedings fall within the scope of either s611(2)(a) or (b), it is submitted that this is exactly the type of matter for which it is appropriate to exercise discretion in the grant of the Respondent’s application for costs pursuant to s611(2).”

[22] Mrs Grabovsky made the following submissions in opposition to the application for costs:

a) In the 8 May 2019 submissions (Exhibit 2) Mrs Grabovsky submitted that,

i. The UPA had failed to comply with the procedural requirements of the Commission by not filing an application pursuant to s.611 of the FW Act in the prescribed form F6. That was a matter remedied by the UPA on 17 May 2019.

ii. “Should the FWC decided (sic) to proceed with the hearing, IG will be absent because I have no intention to participate in a mockery of arbitrating process, consenting to the obviously illegitimate proceeding and endorsing conspiracy to convert the course of justice.” 26

b) In the 17 June 2019 submissions (Exhibit 4) Mr Grabovsky made no direct submission to me, but, rather wrote a letter of complaint about me (and other members of the Commission) to the President of the Commission, the Honourable Justice Ross. However, noting that Mr Grabovsky is an unsophisticated litigant, in fairness to his wife, I treated the document as a submission by her.

c) In Exhibit 4 Mrs Grabovsky submitted that,

i. “As of the date of this Complaint, the UPA application pursuant to section 611 of the Fair Work Act 2009 is not legally valid.”

ii. I had misconducted myself in another Commission matter involving her (C2018/2426).

iii. In relation to the Costs Application, I had “raised the issue of the costs against IG in the matter C2017/7037 and conspired with the members of the Full Bench in matter C2018/7219 … To incite the UPA to apply for costs against IG.” Of course this allegation is nonsense. The issue of seeking costs against Mrs Grabovsky was first raised by the UPA in its Form F1 Application dated 24 August 2018. A proper reading of my s.739 Decision issued on 5 December 2018, in fact, invited the UPA to consider the utility of continuing with the Costs Application. The Full Bench admonished me for discouraging the UPA from seeking costs. 27 It is absurd to suggest there was any conspiracy.

d) Mrs Grabovsky further submitted that,

“3.3 Any application pursuant to section 6 and 11 of the Fair Work Act 2009 must be made in the prescribed Form F6 and field (sic) in a prescribed manner.

3.4 Lodgment of the Form (F6) originates a separate (sic) to C2017/7037 matter (e.g. the same as for the appeal matters). That is why the applications under section 611 are made in dedicated application Form because the parties to proceedings (and reasons for action) could not be the same as for the matter that caused the expenditure (costs) in the first place.

The Cost application must be a separate matter with all ensuring consequences of procedural and juristic nature.

3.5 Once again, the misconduct of the FWC and the utter disregard to procedural and juristic aspects exposes the FWC incapacity to discharge its statutory duties, placing the FWC deeper in a state of disrepute.

The UPA, a lawyer for UPA and the FWC failed (again!) To comply with the prescribed procedural and juristic norms, abusing the process.

3.6 The proper course is…

None of the steps had been made by the UPA in compliance with the statutory requirements.

It means that either [Commissioner] Johns has never dealt with sec. 611 before or he’s very eager to harm IG as soon as possible, or both.

3.7 IG will not tolerate violation of the law and ignoramuses who are acting unlawfully. IG will respond to a properly originated process.

As of the date of this Complaint, IG is not a [cost] respondent because there is no legally valid application for costs.

IG will not submit any further matter for arbitration by a member of the FWC who displayed his corrupt conduct in dealing with this Dispute which I have objectively verifiable evidence.”

e) Mrs Grabovsky submitted that “the hearing, scheduled for 25 June 2019, should be vacated.”

f) In her 24 June 2019 submissions (Exhibit 5) Mrs Grabovsky again wrote to the President of the Commission. Again, in fairness to Mrs Grabovsky I accepted the document as a submission to me.

i. First, Mrs Grabovsky complained about the President’s “unwillingness to impose the Rule of Law upon [his]’s subordinates cultivates an atmosphere of lawlessness among the members of the Fair Work Commission who believe they may violate the law with perfect impunity.”

ii. Mrs Grabovsky then wrote that I was,

A. “… charged with hatred on sexually and racially motivated grounds towards the Applicant…”

B. “… so blinded with … pathological hate that [I am] reckless about the harm [my] misconduct inflicts upon the Commonwealth, the FWC and the Applicant.”

C. part of “conspiracy with the UPA and other members of the FWC…”

iii. Also submitted that,

“If you or any other member of the FWC is under the impression that Mrs Grabovsky is trying to avoid a process concerning costs- it is the wrong impression.

The issue of cost is very important and MUST be dealt with in compliance with the Rule of Law and not with [Commissioner] Johns’ uncontrollable paroxysm of megalomania and homophobia.”

[23] What is apparent from the submissions filed on behalf of the Applicant is that she decided not to engage with the principles relevant to s.611 of the FW Act.

[24] In so far as Mrs Grabovsky submitted that there was no valid cost application, that submission is wrong. The Commission “must perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities.” 28 To the extent that the issue of costs was first raised in the Form F1 – Application dated 24 August 2018, and not in a Form F6 – Application for Costs, that was cured by the application submitted on 17 May 2019. It is also not necessary to register the costs application as a new matter with a separate matter number in order for it to be a valid application. At all times since 24 August 2018 Mrs Grabovsky has been on notice about the costs application. There has been no procedural unfairness in proceeding with the matter in the manner in which it has been conducted.

[25] At the hearing on 25 June 2019 Mr Grabovsky attended (again, his wife, the Applicant, did not attend). Mr Grabovsky indicated that he was appearing for himself,

“… as a victim of conspiracy between members of the Fair Work Commission, United Protestant Association New South Wales Ltd, trading as UPA practitioners from Cantle Carmichael Legal and PG Healy Chambers.” 29

[26] Mr Grabovsky then made an application to me to recuse myself 30 on the basis that, he contended, I was,

i. “continuously violating the Commonwealth law for the benefit of the UPA and for [my] personal gratification…” 31

ii. “a disgrace to the institution of the Fair Work Commission.” 32

[27] I listened to Mr Grabovsky’s submissions 33 more patiently than might reasonably be expected. However, a cogent argument remained elusive.34 I only interrupted him once to indicate that I did not understand the basis for his submission that “I discriminate against people on the basis of race or sex.”35 For the reasons set out in the transcript I declined to recuse myself.36 Mr Grabovsky responded “Let the record show that Igor Grabovsky is leaving the room in protest.” And so he did.

[28] After I dealt with the recusal application the UPA made oral submissions largely consistent with the written submission they had filed.

Consideration

[29] In coming to this decision I have had regard to all that has been submitted in support of and in opposition to the Costs Application.

[30] In the present matter the UPA contends that Mrs Grabovsky made the Grabovsky Application ‘without reasonable cause’, within the meaning of s.611(2)(a) and, further, that it should have been reasonably apparent to her that the Grabovsky Application had ‘no reasonable prospect of success’, within the meaning of s.611(2)(b).

[31] The UPA submissions (Exhibit 1) correctly referred me to the principles relevant to determining an application under s.611 as summarised in the Full Bench decision of Keep v Performance Automobiles Pty Ltd 37 (Keep). I do not repeat the relevant paragraphs here which have been reproduced in the submissions of the UPA. I respectfully adopt the principles in Keep and the authorities referred to in that decision.

Was the Grabovsky Application commenced vexatiously (s.611(2)(a))?

[32] In its F1 application made on 24 August 2018 the Respondent made an application for costs claiming that the Grabovsky Application had “been commenced and maintained vexatiously…”. However, by the time the Respondent came to make submissions on 23 April 2019 it did not press the claim that the Grabovsky Application was commenced vexatiously. The UPA’s Form F6 Application for Costs dated 17 May 2019 did not re-agitate the claim that the Grabovsky Application was commenced vexatiously.

[33] In any case I doubt that it could be established that the Grabovsky Application could be classified as vexatious because it would be necessary to establish that it was brought for collateral or ulterior purposes and not a bona fide attempt to have the question in dispute adjudicated. But because it is not pressed I do not further deal with that aspect of s.611(2)(a).

Was the Grabovsky Application commenced without reasonable cause (s.611(2)(a))?

[34] As noted above, in the s.739 Decision I held that there was “nothing new in the evidence that would justify a reconsideration of the matters decided by Vice President Lawler (a decision not disturbed on appeal)”.

[35] Consequently, this is not a case where the Applicant simply advanced in argument before the Commission that was unsuccessful. At the time that the Grabovsky Application was commenced the facts known to the Applicant and her husband were no different to those which had previously been advanced in the Commission. Having been unsuccessful at first instance and on appeal, and there having been no change in the factual circumstances, the Grabovsky Application had no substantial prospect of success. Despite the vigour with which Mr Grabovsky pursued the matter on behalf of his wife, the Grabovsky Application was manifestly groundless. The Grabovsky Application was so obviously untenable that it should never have been commenced. It was, as I found in the s.739 Decision, nothing more than an attempt to re-litigate claims previously determined (and not disturbed on appeal).

[36] For these reasons, I am satisfied that the Grabovsky Application was commenced without reasonable cause pursuant to s.611(2)(a) of the FW Act.

Did the Grabovsky Application have no reasonable prospects of success (s.611(2)(b))?

[37] I accept that, at the time that the Grabovsky Application was commenced each of the matters set out in paragraph 19 of the UPA’s submissions (reproduced above) were known to Mrs Grabovsky and her husband.

[38] Therefore, noting that the application of s.611(2)(b) is an objective test, for the reason I have explained above, I am satisfied that the Grabovsky Application was manifestly untenable or groundless or so lacking in merit or substance to be not reasonably arguable. A reasonable person (not a label that fits well with Mr Grabovsky) would have concluded that there was no reasonable prospect of success.

[39] Consequently, I am also satisfied that the Grabovsky Application had “no reasonable prospects of success” within the meaning of s.611(2)(b) of the FW Act.

Exercise of discretion

[40] Because the UPA has satisfied me about the matters in both s.611(2)(a) and (b) the discretion to make an order for costs is enlivened.

[41] However, I am conscious that if I award costs against the Applicant that order must not be contravened. A civil penalty remedy flows from a breach of the order. It is a very serious matter.

[42] Relevant to the issue of the discretion, during the hearing on 25 June 2019, the following exchange occurred between me and Mr Puxty, 38

Commissioner Johns: … what more do you say about the discretion? Let me be very frank with you here, proceedings have been in this Commission, involving Mrs Grabovsky, since 5 March 2014.  To my knowledge and certainly in respect of the matters in which I've been involved, I've never seen Mrs Grabovsky.

Now, the Fair Work Act provides for applications for costs to be made against lawyers and paid agents. If Mr Grabovsky was a lawyer or paid agent of Mrs Grabovsky there might be said to be a greater reason to award costs against him, for the way in which he has conducted proceedings in this Commission. But he's not a lawyer and he's not a paid agent.

My concern is this, to be very frank with you, I'm being asked to award costs against Mrs Grabovsky, someone who I've never seen, someone who's never appeared in this Commission, someone who's never even put in a witness statement in any of the proceedings, that I can see, never been cross-examined, never attended.

I mean but for the fact that I've seen - the only evidence I've seen that she physically exists is a WorkCover New South Wales certificate of capacity signed by a consulting psychiatrist, on 8 March 2018, attesting that she has no capacity for employment, between 8 March 2018 and 1 March 2019.  It's the only evidence I have that she actually exists at all.

Coming then to the issue of discretion, should I really order costs against this litigant, in circumstances where it's all been her husband?

Mr Puxty: Commissioner, the applicant's representative has sought, may I say, leave, in inverted commas, to appear on her behalf in this matter, referencing what he references as a power of attorney.

Commissioner Johns: Do you have a copy of that power of attorney?  Has anyone seen it?

Mr Puxty:  No.  I understand that one was proffered in the 2014 proceedings and has not been submitted since.  Commissioner, I understand that - may I take that on notice, Commissioner, I may be able to look into my archives and ascertain where a copy of that document may exist or, indeed, where it may have been tendered by Mr Grabovsky to substantiate his, may I say, standing to represent her.

Commissioner Johns: Maybe it's a fault of mine that I've never asked to see it.

Mr Puxty: Perhaps that's so, Commissioner, however the point is, in this respect, and I'll say two things.  Firstly whilst I would appreciate the fact that Mr Grabovsky has advanced these matters on the basis that he was her attorney, within the relevant powers, the fact of the matter is the respondent has been put to the constant - Commissioner, you will be well aware of how many proceedings we have been required to defend, brought on Mrs Grabovsky's behalf, by her husband.

This is the only set of those proceedings where the respondent has sought costs and whilst I'm not asking you to review any of the other matters there were, obviously, other matters where the respondent formed a view about the utility of those proceedings.

Commissioner, in the exercise of your discretion in this matter, the facts that we are now in what I believe would be the nineteenth set of proceedings, or this may be the fourteenth, but maybe there have been extra hearings - - -

Commissioner Johns:  The fifteenth is coming.

Mr Puxty: Commissioner, the fact of the matter is that notwithstanding what may be some reticence toward costs against the applicant, she has decided, or somewhere along the way there's been a decision to vest the legal powers to prosecute this matter, on her behalf, to her husband.  In those circumstances, in every other respect where a respondent would be entitled to make an application for and seek the Commission's orders to order costs in a situation such as this, it would be, in my submission, whist it may be unreasonable to the applicant, the fact of the matter is, this is not a matter prosecuted by someone who is a relative other than her husband.  She's married to the man that prosecutes these proceedings.  In my submission that's not a matter that should be taken lightly by you in making your decision.

Secondly, and, Commissioner, I must say I'm not - - -

Commissioner Johns: … because it deeply troubles me, I wanted to provide you with that opportunity to say something about it.

Mr Puxty: Thank you.  In addition, Commissioner, there is, in my readings, a decision where the Commission did look carefully at the effect of an order like this upon an applicant in a circumstance.  If I recall I think it might have been the CFMEU was the party representing the applicant.  The Commission proceeded to order costs against the applicant, but noted, in the circumstances, that it was more appropriate that those costs be paid by the union.  Commissioner, if I can seek leave to provide a copy of that decision to you?

Commissioner Johns: I'd be assisted by it if you could find it.

Mr Puxty:  In my submission then it is not unusual for the Commission to be confronted with a situation where the end result of such a proceeding, or such - withdrawn, such an application would be that there is an outcome unfavourable to the applicant.

Having regard for all the matters I've already raised about the relationship between the applicant and her representative, I would also submit that, in the circumstances, the fact of these proceedings, in isolation, being examined for the purpose of section 611 and given the fact that the respondent itself is being required to defend so many matters in the past, in my submission, it must provide some appropriate exercise for the Commission to grant an order such as this.

Might I also say, Commissioner, that in the form F6, for the utility it brings to this application, if I might draw your attention to the actual costs that have been sought and I might draw your attention, Commissioner, to page 6, which is point 4, the only costs that the respondent seeks in this application are for the period between August 2018 and the drafting of this application.  Commissioner, you would be, in my submission, well satisfied that they fall at the very bottom end of what would otherwise be the solicitor/client costs of running such an application to conclusion.

So maybe if I might add to the response, in relation to discretion, in saying that if, Commissioner, you were minded to exercise your discretion, you would be at least comforted in the knowledge that the claim for costs does not reflect, might I submit, the true costs borne by the respondent in having to defend the application, as originally filed in December 2017.

[43] In the present matter I have decided to exercise my discretion in favour of awarding costs against the Applicant. Over many years the finite resources of the Commission have been unreasonably diverted to Mrs Grabovsky as represented by her husband. In respect of nearly every application Mrs Grabovsky has been unsuccessful and those decisions have not been disturbed on appeal.

[44] While I appreciate that Mrs Grabovsky has not been a personal active participant in any of the proceedings before me, on 7 July 2014 she executed a Power of Attorney authorising her husband “to sign any document, discuss and negotiate any matter and/or perform any act as he think fits in relation to” her disputes with the UPA. Having executed a Power of Attorney in such broad terms and without limitation, Mrs Grabovsky must bear the consequences of her decision to do so.

[45] The UPA has been treated most unfairly as a respondent. Notwithstanding it has been restrained in its conduct in not seeking costs at any time prior to the present application. In the present matter the costs being claimed are relatively modest. They arise in the context of the UPA being required to defend matters they had already successfully defended at first instance and on appeal. They defended those matters again in the Grabovsky Application and again on appeal. There could be no more appropriate example where costs should be awarded in an effort to deter other parties in the future from commencing unmeritorious proceedings in an attempt to re-litigate the past.

Conclusion

[46] In the decision of Meys v Sawtell Hotel, 39 Vice President Catanzariti stated:

“[50]… It is not the role of this Commission to exercise its discretion to issue a costs order in lieu of the prima facie assumption that a party will bear its own costs – an assumption which the authorities require me to cautiously adhere to – when to do so would inflict additional financial and emotional hardship on an already vulnerable self-represented Applicant who has not acted vexatiously, unreasonably or in bad faith.”   

[47] In the present matter there was nothing reasonable about Mrs Grabovsky’s conduct and she should pay the UPA its costs in the amount of $27,537.12.

[48] An Order [PN712290] to this effect will be issued with this decision.

COMMISSIONER

Appearances:

Mr I Grabovsky for the Applicant

Mr S Puxty for the Respondent

Hearing details:

25 June 2019

Sydney

Printed by authority of the Commonwealth Government Printer

<PR712289>

 1   Mrs Inna Grabovsky v United Protestant Association of NSW Ltd T/A UPA[2018] FWC 7227

 2   Inna Grabovsky v United Protestant Association NSW Ltd[2019] FWCFB 1964

 3   Transcript PN5

 4   Transcript PN6

 5   Transcript PN14

 6   Transcript PN15

 7   Inna Grabovsky v United Protestant Association NSW Ltd T/A UPA [2019] FWCFB 3620

 8   Mrs Inna Grabovsky v United Protestant Association of NSW Ltd T/A UPA[2018] FWC 2751

 9   Inna Grabovsky v United Protestant Association of NSW Ltd T/A UPA[2018] FWCFB 4362

 10 s.611(1) FW Act

 11 s.611(2) FW Act

 12   [2018] FWC 7227

 13   [2018] FWC 7227 at [45]

 14   [2018] FWC 7227 at [39]

 15   See [2019] FWCFB 1964 at [14]

 16   [2014] FWCFB 8941

 17   [2015] FWCFB 1956 at [17]

 18   The Decision at [37], [38] and [43]

 19   [2015] FWCFB 1956 at [18] to [19]

 20   As referred to by the Full Bench [2019] FWCFB 1964 at [24]

 21 [2000] 203 CLR 194 at 204

 22   [2019] FWCFB 1964 at [26]

 23   [2019] FWCFB 1964 at [27]

 24   [2019] FWCFB 1964 at [28]

 25   Ibid

 26   Para 7 of Exhibit 2

 27   [2019] FWCFB 1964, para [28]

 28 s.577 FW Act

 29   Transcript PN4

 30   Transcript PN13

 31   Transcript PN17

 32   Transcript PN25

 33   Transcript PN27-72 and then in reply Transcript PN77-81

 34   Like the ever elusive clear narrative absent from the 2008 film Katusha

 35   Transcript PN58

 36   Transcript PN82-96

 37   [2015] FWCFB 1956

 38   Transcript PN146-165

 39   [2016] FWC 5561