James Sumpton v Skippers Transport Pty Ltd

[2023] FWC 1776

[2023] FWC 1776

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

James Sumpton
v

Skippers Transport Pty Ltd

(C2023/2670)

DEPUTY PRESIDENT BEAUMONT PERTH, 20 JULY 2023

Costs application pursuant to s 611(2)(b) of the Fair Work Act 2009 (Cth); s 739 application discontinued prior to first conference

1. Skippers Transport Pty Ltd (the Costs Applicant) has made an application for costs against Mr James Sumpton (the Costs Respondent) in relation to an application instituted by the Costs Respondent under s 739 of the Act but subsequently discontinued prior to the first listed private conference that both parties were required to attend. The costs application, as pressed, is made pursuant to s 611(2) of the Fair Work Act 2009 (Cth) (the Act), which provides:

(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.

1. The Costs Applicant contends that the Costs Respondent instituted his application in circumstances where it should have been reasonably apparent to him that his application had no reasonable prospect of success.

1. The basic facts in this matter may be summarised as follows:

a) on Thursday, 11 May 2023, the Costs Respondent made an application under s 739 of the Act for the Commission to deal with a dispute in accordance with the dispute resolution procedure under the Clerks Private Sector Award 2020 (the Award);

b)   the dispute was described in the following terms:

Signed work contract document that stated overtime back on 14th Day of January 2021.

(Copy of Contract attached)

3 items in dispute –

1) Overtime payments never received
2) Fuel card never received
3) No lunch breaks

c)   the matter was allocated to my Chambers on Friday, 12 May 2023, and on that same day a notice of listing was issued for a private conference on 29 May 2023, as were directions.  The directions provided that the Costs Applicant was required to file a response to the application by Friday, 19 May 2023, and that the Costs Applicant may use a Form F1 Application to do so;

d) on Friday, 19 May 2023, the Costs Applicant filed the response to the application under s 739 (Form F1);

e)   on Wednesday, 24 May 2023, the Costs Respondent sent an email to Chambers notifying that he wished to discontinue the matter.  An email was sent from Chambers on that same day advising that the Commission accepted the discontinuance under rule 10(2)(b) of the Fair Work Commission Rules 2013; and

f)   on Wednesday, 24 May 2023, the Costs Applicant sought guidance from Chambers about lodging a costs application. 

1. In the absence of any objection to the contrary and having considered the materials filed, I considered it appropriate for the Commission to determine the application on the papers. I note I allowed an amendment to the name of the Costs Applicant pursuant to s 586 of the Act.

Consideration

1. Section 611 contains no indication of the considerations which the Commission must consider in deciding how to exercise its discretion.[1]  The discretion conferred is expressed in general, unqualified, terms.[2]  In De Giusti v NSW Trains,[3] the Deputy President referred to the observation of the High Court in O’Sullivan v Farrer:

Where a power to decide is conferred by statute, a general discretion, confined only by the scope and purposes of the legislation, will ordinarily be implied if the context (including the subject matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made.[4]

1. The objects of the Act are set out in s 3; I do not intend to repeat them here.

1. Relevant, however, are ss 577 and 578 of the Act, which state respectively:

577 Performance of functions etc. by the FWC

The FWC must perform its functions and exercise its powers in a manner that:

(a)  is fair and just; and

(b)  is quick, informal and avoids unnecessary technicalities; and

(c)  is open and transparent; and

(d)  promotes harmonious and cooperative workplace relations.

Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).

578 Matters the FWC must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:

(a)  the objects of this Act, and any objects of the part of this Act; and

(b)  equity, good conscience and the merits of the matter; and

(c)  the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

1. The principles applicable to the construction and application of s 611(2)(b) were summarised by the Full Bench of the Commission in Baker v Salva Resources Pty Ltd[5] 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;[6] 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,[7] or so lacking in merit or substance as to be not reasonably arguable.[8]

1. Similarly, in Keep v Performance Automobiles Pty Ltd,[9] a Full Bench summarised the principles relevant to that subsection:

[18] 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.

[19] 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”.’ [endnotes omitted]

1. In Qantas Airways Ltd v Carter, the Full Bench stated that it was clear from the terms of s 611 that the point at which the Commission must determine whether or not an application was vexatious, without reasonable cause or had no reasonable prospect of success, was when the application was made.[10]  That is consideration is given to whether the application was ‘made’ in circumstances where it should have been reasonably apparent, at the time the application was made, that it had no reasonable prospect of success.[11]

1. The Costs Applicant’s cost application set out that on receipt of the application under s 739 of the Act, the Costs Applicant engaged a paid agent and submitted a Form F53 clarifying that the Costs Applicant had engaged representation in respect of the matter. Thereafter, the Costs Applicant said thereafter it spent the course of several days investigating the claims made in the application and reviewing the appropriate evidence. According to the Costs Applicant, this also included contacting other company representatives who shared the tenancy where the Costs Respondent worked, in addition to several existing and non-current workers of the Costs Applicant. The Costs Applicant further notes that it was required to investigate claims made by the Costs Respondent in his application that the Costs Applicant owed him for costs associated with his employment, which were unfounded and unable to be substantiated.

1. First, it is observed that a substantial part of the Form F1 included information that was not relevant to a dispute brought under s 739 of the Act. Extensive detail was provided regarding purported issues relating to the Costs Respondent’s performance, including invoicing, driver timesheets, back up to fleet controller, managing office staff and driver, maximising vehicle utilisation and reducing unnecessary overtime, building client relationships, management meetings, fleet maintenance and minor repairs, drive fatigue management and communication. In addition, details were provided about the purported issues with the profitability of the department the Costs Respondent was managing and steps taken to manage the Costs Respondent’s performance. Whilst approximately three pages of the Form F1 were dedicated to these issues, one to one and a half pages addressed the issues that the Costs Respondent purported were in dispute under the Award.

1. Second, in respect of the Award, the Costs Applicant conceded that the Costs Respondent had been engaged under the Award and could reasonably have been assessed as classification Level 5. 

1. The Costs Respondent submits that the notice of his discontinuance followed advice having been received from the Fair Work Ombudsman that he had mixed up the contractual dispute, presumedly with the dispute under s 739 of the Act, and hence had applied directly to the Fair Work Commission. The Costs Respondent stated that he withdrew his application having had the discussion with the Fair Work Ombudsman, so as to stop wasting the Commission’s time.

1. It is accepted that an applicant can discontinue their application at any time (per s 588). In respect of the application under s 739, it is observed that whilst the Costs Applicant was directed to respond to the application under s 739, ultimately it retained discretion as to the extent of enquiry and work that would go into formulating its response. As observed, a substantial amount of the enquiry and work undertaken to complete the Form F1 was not relevant to the dispute raised under s 739 of the Act.

1. After the receipt of the Costs Applicant’s response to the s 739 application, the Costs Respondent discontinued his application on Wednesday, 24 May 2023, prior to the conference having taken place. That is, the Costs Respondent discontinued his application within a few business days of the Costs Applicant’s response having been lodged.

1. With regard to whether it ‘should have been reasonably apparent’, as referred to in s 611(2)(b), that imports an objective test, directed to a belief formed on an objective basis. The Costs Respondent’s application under s 739 identified three issues in dispute, namely no overtime payments having been received, no fuel card received and no lunch breaks. It is observed that in respect of a dispute regarding a ‘fuel card’, there is no provision for a fuel card under the Award. Therefore, on that basis, it should have been reasonably apparent to the Costs Respondent that this aspect of his dispute would fail. However, the remaining issues of overtime and meal breaks are entitlements provided for by the Award in question and the Costs Applicant had conceded that there was Award coverage. Of course, that same Award allows for the Commission to deal with a dispute in respect of a matter arising under the Award (or the National Employment Standards).

1. On an objective level, at the time the application was made, a dispute about overtime or meal breaks was not so far removed from the subject matter of the Award that it could be said that it should have been reasonably apparent that the Costs Respondent’s application had no reasonable prospect of success. 

1. However, complicating matters further is the point that the Costs Respondent appeared to have made the application to the Commission at a time when he was not an employee (that is he made the application post the termination of his employment) and it is apparent from the Form F10 that the Costs Respondent took no steps to resolve the dispute under the dispute resolution procedure whilst an employee or whilst a former employee stating that, ‘As I was removed from the workplace in an unkind manner it would be untenable to attempt to negotiate directly’, presumedly with the Costs Applicant. 

1. Clause 40.4 of the Award clearly provides: ‘If the dispute is unable to be resolved at the workplace and all appropriate steps have been taken under clauses 40.2 and 40.3, a party to the dispute may refer it to the Fair Work Commission’.  The Costs Respondent had taken no such steps.

1. However, whilst this Commission alerted both parties to the issue that the application had been made in circumstances where the Costs Respondent was, at the relevant time, a former employee, in its directions of Friday, 12 May 2023, the Costs Applicant did not raise jurisdictional objections in its Form F1 concerning this point or a purported non-compliance with the dispute resolution procedure as provided in the Award. That is, the Costs Applicant in its Form F1 did not propose, and in doing so did not place the Costs Respondent on notice, that it considered the Commission was absent jurisdiction to deal with the application made under s 739 of the Act.

1. A conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution.  In all the circumstances, I am not satisfied that it should have been reasonably apparent to the Costs Respondent that his application had no reasonable prospect of success at the time his application was made. 

1. If wrong on this point, it would remain the case that I would decline to make the order sought in any event. Section 611(1) provides that a person should bear their own costs in a matter before the Commission. In my view, it would be contrary to that general principle to make an order in this matter when the Costs Respondent promptly withdrew his application upon being advised of the Costs Applicant’s response and having sought further advice about his claim. Furthermore, I am not satisfied that the costs incurred by the Costs Applicant in the preparation of the Form F1, can, in totality, be attributed to the application as made by the Costs Respondent under s 739 of the Act. As identified, a substantial part of the Form F1 addressed matters irrelevant to the application made under s 739, therefore making it difficult to discern the component of the costs claimed attributable to that application. The timesheet submitted by the Costs Applicant in support of the costs of its paid agent does not assist.

1. The Costs Respondent discontinued his application in circumstances where the first listed conference had not been held therefore minimising any potential costs incurred by a party.  Dismissing the Costs Applicant’s application in such circumstances is an approach that is consistent with a past decision of this Commission.[12] 

Conclusion

1. It is for these reasons that the Costs Applicant’s application for costs pursuant to s 611(2)(b) of the Act is refused and the application dismissed. An Order[13] issues concurrently with this decision. 

DEPUTY PRESIDENT

Matter determined on the papers.

[1] Ibid [20].

[2] Ibid.

[3] [2023] FWC 1843, [20]

[4] (1989) 168 CLR 210, 216 (Mason CJ, Brennan, Dawson and Gaudron JJ).

[5] (2011) 211 IR 374, 376 [10]

[6] Re Lewis (2005) 142 IR 188, 191 [6].

[7] Deane v Paper Australia Pty Ltd (2003) 121 IR 362, 363 [7]–[8].

[8] Smith v Barwon Region Water Authority (2009) 187 IR 276, 287 [48].

[9] [2015] FWCFB 1956.

[10] [2013] FWCFB 1811, [20].

[11] Azad v Hammond Park Family Practice Pty Ltd[2022] FWCFB 110, [9].

[12] Mark Jackson Racing v McAlpine[2015] FWCFB 2303 [25], upholding a decision in transcript of Commissioner Roe on 23 January 2015 in matter number U2014/15149.

[13] PR764433.

Printed by authority of the Commonwealth Government Printer

<PR764431>