Jason Nuttall v The Trustee for Bm Supplies Unit Trust
[2024] FWC 1841
•12 JULY 2024
| [2024] FWC 1841 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
ss.400A and s.611 -Application for costs
Jason Nuttall
v
The Trustee For Bm Supplies Unit Trust
(U2023/7212)
| DEPUTY PRESIDENT DOBSON | BRISBANE, 12 JULY 2024 |
Applications for costs under ss 400A and 611 – costs against parties – general provision in relation to costs - unreasonable act or omission – Calderbank offer – indemnity costs awarded
On 5 August 2023, Mr Jason Nuttall (Applicant) made an application to the Fair Work Commission (Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for a remedy, alleging that he had been unfairly dismissed from his employment with BM Supplies Unit Trust T/A Brisbane Milk Supplies (Respondent).
The Respondent raised a jurisdictional objection that the Applicant had not been dismissed and that the Respondent was not the correct employer. On 5 February, following a hearing, I dismissed the jurisdictional objections.[1]
On 12 April 2024, I determined that the Applicant was unfairly dismissed[2] within the meaning of section 385 of the Act and ordered the Respondent pay compensation[3]. On 26 April 2024, the Applicant filed a Costs Application pursuant to ss.400A and 611 of the Act. The Costs Application is validly made, having been filed within 14 days of my decision[4] and order.[5] I issued directions on 29 April 2024 directing the parties to file material including submissions and evidence in relation to the Application. A hearing was set down for 5 June 2024.
The Respondent failed to comply with the directions, and on 20 May 2024, my Chambers wrote to the Respondent again saying:
“Dear Mr Carew
I refer to the above matter.
As per the directions issued by Deputy President Dobson on 29 April 2024, material for the Respondent was due to be filed with the Commission, and served on the Applicant, by 4:00pm on 10 May 2024.
The Commission has not received any material from the Respondent, nor has there been a request for an extension.
The Respondent is directed to file their material by 4:00pm (AEST) on 21 May 2024 and include an explanation of why they failed to comply with this direction. In the absence of any response from the Respondent, the matter may be determined without further reference to them. Should a decision on the matter be made in the Applicant’s favour, the resultant order will be enforceable.”
The Respondent again failed to reply or comply with my directions. Given no submissions had been made at all by the Respondent, I instructed my chambers to write as follows:
“Dear parties
The Commission is not in receipt of any material from the Respondent.
This seems to indicate that the Respondent does not contest the Costs Application.
The Deputy President proposes to hear the matter on the papers on the basis of the material filed by the Applicant.
Should either party object to this proposal they should advise as such by writing to Chambers by no later than 3:00pm AEST this afternoon. Should an objection be raised, the Hearing will commence at 3:30pm.”
No objections were received from either of the parties. Accordingly, I will proceed to determine the application on the papers.
Background to the Costs Application
Whilst the previous decisions in this matter have outlined the background, it is worth providing a summary again. Noting that the Applicant filed his application for unfair dismissal on 5 August 2023, on 11 August 2023, the Commission served the application on the Respondent via email to Mr Carew. The email requested a response to the application using the Form F3 Employer Response, by 18 August 2023 and notified that a staff conciliation was scheduled for 28 August 2023. On 15 August 2023, Mr Carew answered a call by a Commission case manager, and followed up with an email where he claimed that he “sold the business over 7 weeks ago.”
On 18 August 2023, the Commission sent a further email requesting a substantive response to the application, noting that “If you do not participate, we may make a decision against you without hearing from you.” Following this, a Commission case manager spoke with Mr Nutall to obtain alternate contact information for the Respondent, and on the call and in a reply email Mr Nutall confirmed Mr Carew was still employed by the Respondent. That afternoon, Mr Carew sent a reply email providing his intention of non-compliance:
“Please note that I ceased being the employer on 24/6/23. Therefore I have no response to make.” [sic]
Following this, the Commission attempted to contact Ms Kelli Hennessy, office manager of the Respondent, but this was unsuccessful, and the Commission left a voice mail seeking confirmation of a contact person for the Respondent. The Commission then sent an email to Mr Carew requesting the appropriate contact person for the Respondent. Mr Carew responded that the Respondent entity ceased trading on 24 June 2023 when it was sold to Dairy Direct Distribution Pty Ltd.
On 22 August 2023, Mr Carew attempted to contact the Commission case management team by phone but was unsuccessful. The Commission sent Mr Carew an email in response to the following effect:
“Regarding your email below, I confirm that the Commission has served the Application on the Respondent named in the F2, as we are obligated to do.
As the named Respondent, you are now required to respond to the application by the Fair Work Commission Rules [2013].
The F3 response form is the appropriate way for you to raise any objections or provide further information like the below.
For example, if you consider that the incorrect Respondent has been named, you would need to raise this objection via the response form.
Even though you are the named Respondent, responding does not constitute acknowledgement that you are the correct Respondent.
If you do not Respond and the conciliation fails to proceed because of non-attendance, the matter will be referred to arbitration before a Member of the Commission.
The Member may order the parties to respond and/or attend, or may make a determination absent the submissions of one party if they are not filed.
I note that your email below also states that the named respondent has ceased to trade. If you consider that the Commission does not have the jurisdiction to deal with application because the business has been liquidated or has ceased to trade due to a resolution of creditors, please advise us by return email and the matter will be considered by the FWC’s National Practice Lead. Otherwise the matter will proceed and it will be a matter for a Member to determine the ‘correct’ respondent, should you raise that as an objection.”
On 23 August 2023, the Commission sent Mr Carew a notification that the Respondent’s response to the application was overdue. It requested that Mr Carew complete a Form F3 and send a copy of it to the Commission and Mr Nutall as soon as possible, putting the Respondent on notice that if they do not response to the application, the Commission would not be able to consider the Respondent’s side of the case.
On 28 August 2023, the Respondent did not attend the listed conciliation conference and it was unable to proceed. Accordingly, the Commission referred the matter to arbitration, and it was allocated to my Chambers.
On 2 November 2023 my Chambers contacted the parties by email, noting that the Respondent remained a registered business and requesting that Mr Nutall confirm if he wishes to continue against the Respondent or amend his application, and that Mr Carew provide evidence that the Respondent has ceased trading and is being deregistered.
On 8 November 2023 I issued directions for the production of submissions and material by the parties, attaching a digital court book with all the material presently before me. The Respondent was required to provide a Form F3 and if they maintained they are not the correct entity, to provide evidence in support of that submission by 14 November 2023. I listed the matter for a preliminary conference on 15 November 2023 and directed the Respondent to attend, with a following notice of listing requesting parties provide attendance information by 14 November 2023. The Respondent was required to provide an outline of submissions in response by 6 December 2023, and the matter was listed for hearing on 2 January 2024.
On 14 November 2023, my Chambers contacted the parties by email, noting that neither party had confirmed their contact information per the notice of listing and requesting they be provided as soon as possible. Mr Carew and the Respondent also failed to provide the Form F3 response and any evidence in support of their submission that the Respondent is not the correct entity for the application on 14 November 2023.
On 15 November 2023, the Respondent failed to attend the listed preliminary conference. My associate spoke to Mr Carew by phone, reminding him there are directions afoot requesting evidence to support his claim that the Respondent is not the employer. Mr Carew refused to attend the conference and terminated the call. Mr Nutall provided payslips as evidence that the Respondent is the correct employer.
On 16 November 2023, my Chambers contacted the parties by email, serving the payslips tendered by Mr Nutall in support of his claim that the Respondent is the employer. The email provided:
“The Respondent’s refusal to participate has been noted. Further, the Respondent has failed to comply with the Directions issued on 8 November 2023 by not providing the Form F3 – Employer Response.
The Respondent’s claim that they are not the employer has been considered. The Applicant has provided the attached payslips during the conference and has informed that he presses his application for Unfair Dismissal against the Trustee for BM Supplies Unit Trust.
Mr Carew – You have been named as the contact person for the above-named Respondent. There is no evidence before the Commission to suggest that the Trustee for BM Supplies Unit Trust is not the Employer. The Deputy President’s preliminary view is that the Trustee for BM Supplies Unit Trust is the appropriate employer and therefore the application will proceed.
The Respondent is directed to file their material by 4:00pm (AEST/QLD Time) on 17 November 2023 and include an explanation of why you have failed to comply with directions to date. In the absence of any response from you, the matter will be determined without further reference to you. Should a decision on the matter be made in the Applicant’s favour, any resultant orders will be enforceable at law. You are warned that your failures to date are offences under the Act and you are advised to obtain your own independent legal advice regarding your failures to date, any consequences of those failures on you and the potential of any orders that may be made against you in your absence.”
Following these instructions, I ordered Mr Carew to attend the hearing before the Commission on 2 January 2024, and by 22 November 2023 to produce all documents in relation to: the purported sale of the Respondent; the employment of Mr Nutall communicated with Dairy Direct Distribution Pty Ltd; the termination of Mr Nutall; and payments made to Mr Nutall on termination. These orders were published and sent to the Respondent by email and registered post. Mr Carew was put on notice about the consequences of contravention of these orders. In response, Mr Carew telephoned the Commission and spoke with my associate, stating he was unclear as to his obligations. My associate instructed him to comply with the directions, and Mr Carew provided he would respond via email, and would include Mr Nutall in the correspondence.
Following this conversation, Mr Carew provided a response email on the afternoon of 16 November 2023 positing the following:
“I state again that I ceased to be the Employer on 24th June 2023. I processed the final pay on 27th June and all taxes, superannuation and child support have been accounted for up to that date.
I am not responsible for anything after 24th June.
I did however call Jason Nuttall on the 15th July 2023 (3 weeks after I finished) to advise him that the new owners were not going to offer him a contract.
I don’t understand why I am still being contacted about this matter.
I hope this clears things up.”
On 17 November 2023, my Chambers contacted the parties via email and informed them my preliminary view was that I did not agree with Mr Carew’s position. My chambers recommended Mr Carew obtain legal advice and confirmed that the orders and directions remained on foot and directed at Mr Carew, and that there may be consequences of any contravention of these orders.
On 22 November 2023, Mr Anthony Andrews of Lynch Andrews Lawyers attempted to contact my chambers by telephone, leaving a voice message requesting a call back. My associate telephoned Mr Andrews who informed my chambers he would represent the Respondent and Mr Carew and sought extra time to comply. My associate requested he provide a Form F53 notice that a person has a lawyer or paid agent. The Respondent did not comply with the order to produce documents by 22 November 2023.
On 24 November 2023, Mr Andrews sent an email to my chambers stating that he would represent the Respondent and Mr Carew, requesting a 28-day extension of time to produce documents and for copies of all relevant documents currently before the Commission. Mr Andrews did not attach a Form F53. My chambers sent a reply requesting a Form F53 before any material before the Commission could be provided to Mr Andrews. Mr Andrews then provided a Form F53 providing notice that Lynch Andrews Lawyers were representing the Respondent.
Following this response, I amended my directions and the order to produce documents. I refused the 28-day extension request, requiring the Respondent to produce documents and furnish the Form F3 response instead by 30 November 2023. I directed the Applicant to provide their submissions on merits by 30 November 2023 as well, and the Respondent was required to submit its submissions and evidence by 14 December 2023. The hearing remained listed for 2 January 2024, and the order for Mr Carew to attend remained on foot.
On 28 November 2023, the Commission received a return to sender notification for the orders produced by registered post but notes that the Respondent had confirmed that they had received them by email.
On 29 November 2023, Mr Andrews sent my chambers an email stating that they had not received any of the material filed in the application. It claimed Mr Carew was not in possession of the application form, nor did he have access to the email address that the material was sent to. I note that in this email, Mr Andrews copied the very same email address of the Respondent which the material had been served to. Mr Andrews requested from the Commission and Mr Nutall all information which was before the Commission. My Chambers provided a further copy of the digital court book with all the material before me to the parties.
By 15 December 2024, the Respondent had not complied with my directions to file material and had contravened the Act by failing to comply with the order to produce documents, and the Applicant had not filed material. My chambers issued a non-compliance email, instructing both parties to provide an explanation for their failures to comply and requesting Mr Nutall confirm he intended to continue with his application by 18 November 2024. I directed that if the Applicant did not provide a reasonable explanation, the matter would be listed for a non-compliance hearing on 21 December 2024. My chambers informed the Respondent that “In the absence of a reasonable explanation for your failure to comply with this order, the Deputy President intends to ask that the General Manager of the Fair Work Commission refer your non-compliance to the relevant law enforcement body or bodies.”
Following the non-compliance correspondence, Mr Andrews sent a reply email to my chambers as follows:
“I note that Mr Nuttall’s application names the Respondent to the proceeding as “The Trustee For Bm Supplies Unit Trust”.
With respect, this is not a legal entity and the manner in which Mr Nuttall has prepared his Application makes it impossible for Mr Carew to properly respond to Mr Nuttall’s Application.
Mr Carew respectfully submits that as a result of this issue, coupled with your email below, that the appropriate course of action is for Mr Nuttall to provide the material requested in your email by 4.00 p.m. on Monday, 18 December 2023 and for Mr Carew to respond to this material by 4.00 p.m. on Wednesday, 20 December 2023.
Mr Carew contends that Mr Nuttall has failed to properly articulate his claim and substantiate a claim against Mr Carew.
As you are aware, Mr Carew has always maintained that these proceedings are baseless and that they should not have been commenced him.
To this end, we note that Mr Nuttall’s Application:-
i. In paragraph’s 1 to 7 inclusive of his Application Mr Nuttall make reference to “Ross and his daughters” however “Ross and his daughters” are not named as a party/ies to the proceeding;
ii. Mr Nuttall’s application makes reference to the fact that “Ross” asked about Mr Nuttall’s “new contract” which supports the contention that Mr Carew has nothing to do with these matters;
iii. Paragraph 2 of the Application makes it plain that there should be another party named to Mr Nuttall’s application;
iv. Paragraph 3 of the Application makes it plain that Mr Nuttall has spoken with “Ross” in which he references his “future employment”;
v. Paragraph 4 of the Application contradicts any allegation that Mr Carew has liability in relation to these matters;
vi. Paragraph 5 is nonsensical and Mr Nuttall needs to provide an explanation for this;
vii. Paragraph 7 is nonsensical and Mr Nuttall needs to provide an explanation for this;
viii. Mr Nuttall’s Application does not specify with any particularity the dates that the material dates are alleged to relate to;
ix. Mr Nuttall asserts that his last shift was on 14 July 2023 however he then asserts that his employment was terminated on 26 July 2023;
x. Mr Nuttall asserts that he was also speaking with “Ross” on numerous instances however provides no explanation as to why.
Mr Nuttall needs to explain who Ross is and why Ross is mentioned in the Application;
xi. Mr Nuttall refers to a Separation Certificate but does not elaborate on the Certificate.
Who is Mr Nuttall asserting issued the Separation Certificate.
The Order for Production refers to “Dairy Direct Distribution Pty Ltd “ however this entity is a not a party to the proceedings.
The abovementioned matters support the course of action set out in this email namely that Mr Nuttall should be required to substantiate his claim before Mr Carew is required to respond to the Application.
Mr Carew wishes to assist the Commission.
Mr Carew’s view is that he does not have a role to play in these proceedings and has expressed this to the Commission on numerous instances.
Additionally, Mr Carew has expressed that the manner in which the Application has been prepared does not allow for Mr Carew to properly understand the nature of Mr Nuttall’s Application.
Having regard to these matters we re-iterate that the appropriate course of action is for Mr Nuttall to substantiate his claim before Mr Carew is forced to incur expense in responding to an Application that as it currently stands is without merit.
Finally, we note that this matter has been listed for hearing on 2 January 2024.
Mr Carew has instructed us that this date is not convenient for him as he will be on leave during this time.
Moreover, we note that although our firm has not been given leave to appear in these proceedings, our firm will be closed from 21 January 2023 until 8 January 2024.
Additionally, the writer will be on annual leave until Monday, 23 January 2024.
On this basis, Mr Carew has requested that he proposed hearing on 2 January 2024 be adjourned to a date in February 2024.
Please do not hesitate to contact me if you would like to discuss the contents of this email.”
In consideration of the Applicant’s non-compliance and the Respondent’s reply email, I determined to list the matter for a non-compliance hearing at which both the Applicant’s claims and the Respondent’s request for adjournment would be considered. A notice of listing for the non-compliance conference on 21 December 2023 followed.
That evening following receipt of the notice of listing, Mr Andrews provided a Form F3 on behalf of the Respondent, which provided the jurisdictional objections that Mr Nutall was not an employee and that Mr Nutall was not dismissed. It provides an undated screenshot providing that the registered business name “Brisbane Milk Supplies” is held by Dairy Direct Distribution Pty Ltd, not Mr Carew, and relies on this as evidence that at relevant times Mr Nutall was not employed by Mr Carew. The email attaching the Form F3 also requested leave for Lynch Andrews Lawyers to appear on behalf of the Respondent and leave for Mr Andrews and Mr Carew to appear by telephone on 21 December 2023.
On 19 December 2023 my chambers requested the Applicant’s views on the Respondent being represented and submissions from the Respondent as to whether leave should be granted to be represented by Lynch Andrews Lawyers and denying the request to attend by telephone.
On 20 December 2023, I granted leave to both parties to be represented at the non-compliance hearing if both parties and representatives appear in-person and have been instructed to act. I noted that leave may be withdrawn if they have not been instructed. In reply, Mr Andrews sent a further request to appear by telephone, claiming he was recently instructed Mr Carew, and in this Mr Carew stated he had injured his leg on 9 December 2023 which impacts his mobility, and requires him use of crutches and occasionally a wheelchair. I denied permission to appear by telephone as “the building that the Fair Work Commission is located in has facilities that will meet Mr Carew’s needs.”
On 21 December 2023, both parties appeared at the non-compliance hearing.
On 4 January 2024, I issued amended directions to parties and a further set of orders to produce documents and a notice to appear on the Respondent. I ordered the Respondent to provide the relevant documents by 10 January 2024. I directed the Respondent to provide its submissions in relation to its jurisdictional objection by 10 January 2024, with a hearing listed for 23 January 2024. I ordered Mr Carew to attend the hearing on 23 January 2024 in person.
The Respondent did not file its documents and material on 10 January 2024 as directed and ordered. On 11 January 2024, Mr Andrews, on behalf of the Respondent, filed the documents as ordered and the material in support of the jurisdictional objection with my chambers.
On 17 January 2024, the Respondent filed reply submissions to the Applicant’s material, submitting that the jurisdictional objection should be dismissed. The Respondent filed its appearances for the 23 January 2024 hearing on 22 January 2024. Mr Carew appeared unrepresented for the Respondent at the jurisdiction hearing on 23 January 2024. My decision on the jurisdictional objection details the material filed and considered and the reasons that the jurisdictional objection was dismissed.[6]
On 25 January 2024, I issued directions for the merits hearing of the application. The Respondent was required to file material and submissions in response to the merits of the application on 20 February 2024. The Respondent was required to attend the hearing listed on 1 March 2024. The date for the Respondent’s material and submissions was extended to 21 February 2024 following a request for extension from the Applicant.
On 19 February 2024 Mr Carew provided submissions and material in relation to the substantive application. Mr Carew did not include Mr Andrews in this correspondence.
On 28 February 2024 I sought submissions from the Respondent regarding representation for the hearing and adjourned the hearing to 11 March 2024.
On 29 February 2024, Mr Carew provided that “[Mr] Andrews is no longer my representative and has not been so for some time” and submitted that it would benefit the efficiency of the Commission if the Applicant was not represented.
During the hearing on 11 March 2024, Mr Carew tendered further material which had not previously been provided to the Commission or Applicant. On 12 April 2024, I issued my decision finding that the Applicant had been unfairly dismissed and ordering compensation.[7]
The Fair Work Act
s.400A of the FW Act is a general provision for the awarding of costs against a party, which applies to unfair dismissal and other matters. Section 611 appears within Division 3 (Conduct of matters before FWA) of Part 5-1 (Fair Work Commission) of Chapter 5 of the FW Act.
Relevant Legislation s.400A
Section 400A of the Act is a departure from the usual rule that parties must bear their own costs in relation to a matter before the Commission and provides as follows:
“400A Costs orders against parties
(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit the FWC’s power to order costs under section 611.“
Section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. It is useful to outline the following from the Explanatory Memorandum to the Fair Work Amendment Bill 2012:
“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.
169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”[2]
Principles relevant to s.400A
In Baxter Healthcare Pty Ltd v Portelli[8] (Baxter Healthcare), the Full Bench of the Commission stated:
“[50] Item 4 of the Fair Work Amendment Bill 2012 inserted a new section 400A into the FW Act to enable the Fair Work Commission to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter. The explanatory memorandum provides as follows:
169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”
In Gugiatti v SolarisCare Foundation Ltd[9] (Gugiatti), the Full Bench outlined the preconditions to the exercise of discretion in relation to an application made under s.400A, as follows:
“[43] Section 400A(1) establishes two pre-conditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.[10]“
Notwithstanding the satisfaction of the preconditions set out in s.400A(1), the power to make an order for costs against a party is a discretionary power and it does not automatically follow that an order for costs will follow. In Baxter Healthcare, the Full Bench stated:
“[95] We note at the outset that the relevant sections provide that if the requisite jurisdictional facts are established (relevantly, ss. 400A(1) and (2), and s.611(2)) then the Commission may make an order for costs. A costs order does not automatically follow upon a finding of the requisite jurisdictional fact. It is clear from the use of the word ‘may’ that the Commission retains a discretion as to whether or not to make an order for costs. In that regard these provisions may be contrasted with ss. 418(1) and 424(1), which provide that the Commission must make certain orders if certain jurisdictional facts are present.”
Commissioner Bissett further considered s.400A in Emma Sidney v Employsure Pty Ltd (Sidney).[11] In that decision she distilled a number of the principles that the Full Bench had recently considered in Roy Morgan Research v Baker[12] as follows:
·“A failure to inform another party of an inability to attend proceedings would be, if intentional, unreasonable and if accidental, an unreasonable omission;
·a failure to advise the other party of the first party’s intentions, if deliberate or reckless, would be unreasonable and if an omission could be equally unreasonable;
·very strong prospects of success will not always justify a failure to participate in settlement negotiations;
·a reasonable person will determine if and how to respond to an offer of settlement after considering all of the circumstances of the case including the terms of settlement in relation to the relief sought; the relative strength of the parties cases; the likely length and cost of proceeding to hearing if the matter does not settle; and adverse consequences of acceptance of a settlement rather than prosecuting or defending the primary application.”[13]
In respect of the principles of Calderbank,[14] I note that in Post for NTI Limited,[15] the Full Bench considered:
“[45] The jurisdiction of the Commission is not one where costs ordinarily follow the cause and there are no rules in the Commission dealing with formal offers such as offers of compromise. It is not a jurisdiction where the only remedy is monetary. An arrangement of the kind followed in the courts involving offers of compromise or Calderbank offers is therefore not necessarily appropriate where reinstatement is a possible remedy. An applicant may also pursue an application where there is no financial gain possible to seek to overturn a finding of misconduct on which their termination of employment was based and which affects their prospects of ongoing employment.”
Relevant Legislation s.611
As s.400A(3) of the Act makes clear, s.400A does not limit the Commission’s power to order costs under s.611. Section 611, while stating that parties must bear their own costs, also 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),[16] 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’.”[17]
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 Carew that his objections to the unfair dismissal 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 Applicant
The Applicant filed submissions with the costs Application in the Commission on 26 April 2024. The Respondent did not file any submissions in the Commission.
The Applicant submitted that the Respondent had acted unreasonably and caused the Applicant to incur legal costs. Specifically, the Applicant set out that the Respondent had:
1.Failed to properly respond to requests for information from the Commission; and
2.Failed to comply with the Direction of the Commission of 8 November 2023 to file the form F3; and
3.Failed to comply with the Direction of the Commission to attend a Conference on 15 November 2023; and
4.Misrepresented to the Commission that he had not been involved with the termination of the Applicant’s employment in circumstances where he was well aware that he was and had communicated the termination by voicemail to the Applicant; and
5.Misrepresented to the Commission that he had ceased all involvement with the business on or about 24 June 2023, however during cross-examination informed that he had still been involved for a ‘transition’ period; and
6.Caused the Commission to issue an order to Attend to Mr Carew of the Respondent and to file material in the Commission in light of the Respondent’s failure to comply; and
7.Acted obstructively and dishonestly in continuing to deny that he had been the employer at the time of the termination, and caused further delays in providing ordered documentation; and
8.Acted stubbornly obstinate and disrespectful during the processes of the Commission; and
9.Did not respond to a Calderbank[18] offer of settlement sent by the Applicant on 25 January 2024.
The Calderbank offer from the Applicant relevantly stated that the matter would be discontinued by the Applicant should the Respondent pay to the Applicant a gross sum by way of compensation representing 8.5 weeks’ pay, which was calculated at $10,710.00. The offer noted that should the Applicant receive more favourable terms at the conclusion of the matter by way of an order of the Commission, that they would rely upon the ‘Calderbank letter’. The Applicant gave the Respondent until close of business on Monday 29 January 2024 to respond however the Applicant submits that there was no response. I note the final order for compensation awarded to the Applicant was $18,629.00.
Submissions of the Respondent
The Respondent did not file any submissions in response.
Consideration
The costs application was filed within 14 days of the Commission determining the matter on 12 April 2024.[19]
The grounds for seeking costs are set out at paragraph [59] of this decision.
An itemised schedule of costs was included in the costs application seeking a total of $6901.10. The schedule is as follows:
| Item | Date | COSTS | Amount |
| 1. | 19.12.2023 | Item 101 - Instructions to act | $201.00 |
| 2. | “ | Item 601 – perusing recent email communications between parties & FWC & Form F2 and F3 filed (40 folios @ $4 / folio) | $160.00 |
| 3. | “ | Item 601 – perusing 13 payslips during relevant period | $52.00 |
| 4. | “ | Item 801 - Short Letter to FWC & Respondent re instructions to act | $12.00 |
| 5. | 20.12.2023 | Item 203 – Drawing Form F53 Notice of Applicant’s | $74.00 |
| 6. | “ | Item 804 – Special letter to FWC re possible application to replace Respondent with other entity | $50.00 |
| 7. | 21.12.2023 | Item 1108 – Necessary pre-hearing conference with | $93.00 |
| 8. | “ | Item 1102 - Attendance at Fair Work Commission for mention (one hour @ $60 / ¼ hour); application re legal representation parties, oral evidence playing of Respondent’s voice message termination, contempt of Respondent re earlier Notice to Produce Documents; submissions made and Directions issued re hearing of jurisdictional objection on 23 Jan. 2024 | $240.00 |
| 9. | 04.01.2024 | Item 601 – Perusing further amended directions from | $52.00 |
| 10. | 11.01.2024 | Item 601 – Perusing letter and material from Respondent’s solicitors incl Contract with purchaser of business, searches, newsletter (70 pages & 210 folios @$4 / folio) | $630.00 |
| 11. | 12.01.2024 | Item 601 – Email from FWC re issue of correct | $16.00 |
| 12. | 17.01.2024 | Item 804(b) – Special letter to FWC re issue of correct Respondent following research of legal issue (9 folios @ Item 301 rate of $8 /folio) | $72.00 |
| 13. | “ | Item 601 – Perusing letter from Respondent’s solicitors in | $32.00 |
| 14. | 19.01.2024 | Item 802 – Ordinary letter to Respondent’s solicitors providing copy of voicemail recording and requesting agreement to proposed transcript | $24.00 |
| 15. | 22.01.2024 | Item 601 – Perusing letter from FWC re listing for jurisdictional objection on 23.01.2024 (4 folios @ $4 / folio) | $16.00 |
| 16. | 23.01.2024 | Item 602 – Scanning Digital Court Book provided for hearing today (271 pages @ $6 / page = $1,626) Reduced: | $500.00 |
| 17. | “ | Item 1108 – Necessary pre-hearing conference with | $135.00 |
| 18. | “ | Item 1102 – Attendance at Fair Work Commission representing Applicant on jurisdictional hearing including oral evidence of witnesses and submissions (3 hours @ $60 / ¼ hour). Travel incurred but not claimed. | $720.00 |
| 19. | 25.01.2024 | Item 601 – Perusing letter from FWC re anticipated order that jurisdictional objection failed – reasons to follow & Merits Directions attached (11 folios @$4 / folio) | $44.00 |
| 20. | “ | Calderbank letter sent to Respondent’s solicitors at 9.07am on 25.01.2024 (as there had been no notification they were no longer acting) – No fee – See attached letter “Without Prejudice Save as to Costs”. | $0.00 |
| 21. | 05.02.2024 | Item 601 – Perusing Decision of Deputy President Dobson | $132.00 |
| 22. | 07.02.2024 | Item 302 – Drawing Statement of James Nuttall (4 pages) and Applicant’s Outline of submissions in support of the Application (8 pages) (12 pages 36 folios @ $8 / folio) | $288.00 |
| 23. | 12.02.2024 | Item 501 – Copy of 18 pages facebook entries re mitigation of loss by Applicant (18 pages @$2 / page) | $36.00 |
| 24. | 20.02.2024 | Item 601 – Perusing Respondent’s Submissions and manual, complaints (total 50 pages / 150 folios @$4 / folio) | $600.00 |
| 25. | “ | Item 501 – Copy of 50 pages for client’s instructions (50 | $100.00 |
| 26. | 27.02.2024 | Item 302 – Drawing Further Submissions in response to | $56.00 |
| 27. | 28.02.2024 | Item 601 – Perusing letter from FWC seeking submissions concerning legal representation (< 3 folios) | $16.00 |
| 28. | 28.02.2024 | Item 302 – Drawing Submissions in relation to legal representation (3 folios @ $8 / folio) | $24.00 |
| 29. | 29.02.2024 | Item 601 – Perusing advice from Respondent that he does not have legal representation and objecting to Applicant being legally represented (< 3 folios) | $16.00 |
| 30. | “ | Item 302 – Drawing index to Applicant’s Authorities | $16.00 |
| 31. | “ | Item 501 – Copy of 182 pages of Applicant’s Authorities | $364.00 |
| 32. | “ | Item 601 – Perusing Notice of Listing of Determinative | $16.00 |
| 33. | 05.03.2024 | Item 601 – Perusing Decision letter from FWC re legal representation (< 3 folios) | $16.00 |
| 34. | 08.03.2024 | Item 601 – Perusing Digital Court Book updated – | $100.00 |
| 35. | 11.03.2024 | Item 1108 – Necessary pre-hearing conference with Applicant – 1 hour | $135.00 |
| 36. | “ | Item 1102 – Attendance at Fair Work Commission representing Applicant on Determinative Hearing including oral evidence of witnesses and submissions (3 ½ hours @ $60 / ¼ hour). Travel incurred but not claimed. | $840.00 |
| 37. | 12.04.2024 | Item 601 – Perusing Order and Decision of Deputy President Dobson OAM (60 folios @ $4 / folio) | $240.00 |
| TOTAL | $6,118.00 |
| Costs and Disbursements | Amount claimed | Amount taxed and allowed |
| Total costs (above) $6,118.00 + GST = $6,729.00 | $6,729.00 | |
| Total disbursements 26.04.2024 ASIC Search fee – current & historical BM Supplies Pty Ltd $19.00 | $171.30 | |
| Further details including invoices will be provided on request | ||
| Total costs and disbursements | $6,901.10 |
Having had regard to the Applicant’s submissions and the case history, I am satisfied that the Respondent:
(a)Failed to comply with directions of the Commission including:
a.As directed on 8 November 2023 to file a Form F3; and
b.As directed on 8 November 2023 to attend a conference on 15 November 2023;
(b)As a result of his failure to comply with directions, necessitated the making of an order on 16 November 2023 for the Respondent to attend the Commission (Notice to Attend) and to provide certain documents (Notice to Produce);
(c)Maintained a denial that he was the Respondent and caused the case to be delayed unnecessarily and moreso than would have been the case had he complied with the directions of the Commission.
Indeed, even in respect of this Costs Application, the Respondent has failed to file any material in accordance with the directions. His failure to do so however, has only resulted in a higher risk of adverse findings being made against him and I am satisfied has not caused any further cost to be incurred by the Applicant.
I note that the Applicant obtained legal representation and that a form F53 notifying the Commission and the Respondent of this was filed on 22 December 2023 at which point that arrangement commenced.
I have considered the table of costs claimed in respect of s.400A, the relevant case law in Gugiatti and others as set out in this decision, the statutory basis, the explanatory memorandum, the grounds for the application brought by the Applicant and following a careful review of the case history. I note that the costs claim commence from 19 December 2023. It is my view that the legal costs set out in the Applicant’s claim were incurred after the Respondent’s conduct set out at paragraph [65]. Furthermore, I note that the fair Work Commission Rules 2024 require the filing of material such as the F3, which were also the subject of directions of 8 November 2023. Whilst there is no claim for legal costs that directly arise from the Respondent’s failure to comply with those Rules at the direction of the Commission, for completeness I add that it is apparent that s.400A is intended to cover costs incurred or caused by the other party to a matter once it is further progressed, that is, passed its initiation.[20]
In respect of s.611, I can only consider the legal costs claimed which were incurred from 19 December 2023. I am not satisfied to the level required, that from 19 December 2023, the Respondent “responded to the application, vexatiously or without reasonable cause”[21] or that “it should have been reasonably apparent … (that the Respondent) .. had no reasonable prospect of success.[22] At that point, the Respondent had a number of arguments to put and whilst they were not ultimately successful nor were they particularly strong, they demonstrate that the defence of the case was not completely absent of any reasonable cause or prospect of success. Those defences include that the Respondent was not the employer, that the termination was a redundancy and that the Applicant’s performance had been poor.
I accept that a Calderbank offer was made on 25 January 2024 to resolve the matter on the basis of a payment of $10,710. That offer was held open until close of business on 29 January 2024 and I accept that the Respondent chose not to engage in any resolution of the matter. Subsequently, when the Unfair Dismissal Application was upheld, the Respondent was ordered to pay the Applicant $18,629. Having balanced the facts accepted in this matter, the Full Bench consideration in Post v NTI Limited (Post),[23] (noting that reinstatement was not sought by the Applicant in it’s Calderbank offer), Sidney at paragraph [47] and the Explanatory Memorandum as set out in paragraph [43] which specifically envisaged s.400A of the Act capturing a broad range of conduct including “a failure to agree to terms of settlement that could have led to the application being discontinued, “[24] I consider the Respondent’s failure to accept the Calderbank offer was “an unreasonable act or omission in the connection with the conduct or continuation of the matter” within the meaning of s.400A(1). This is particularly egregious when considered in light of the Respondent’s earlier conduct in the matter for which I have declined to make an order for costs per paragraph [69] of this decision.
From the 30 January 2024 I note the following costs were incurred by the Applicant:
| 21. | 05.02.2024 | Item 601 – Perusing Decision of Deputy President Dobson | $132.00 |
| 22. | 07.02.2024 | Item 302 – Drawing Statement of James Nuttall (4 pages) and Applicant’s Outline of submissions in support of the Application (8 pages) (12 pages 36 folios @ $8 / folio) | $288.00 |
| 23. | 12.02.2024 | Item 501 – Copy of 18 pages facebook entries re mitigation of loss by Applicant (18 pages @$2 / page) | $36.00 |
| 24. | 20.02.2024 | Item 601 – Perusing Respondent’s Submissions and manual, complaints (total 50 pages / 150 folios @$4 / folio) | $600.00 |
| 25. | “ | Item 501 – Copy of 50 pages for client’s instructions (50 | $100.00 |
| 26. | 27.02.2024 | Item 302 – Drawing Further Submissions in response to | $56.00 |
| 27. | 28.02.2024 | Item 601 – Perusing letter from FWC seeking submissions concerning legal representation (< 3 folios) | $16.00 |
| 28. | 28.02.2024 | Item 302 – Drawing Submissions in relation to legal representation (3 folios @ $8 / folio) | $24.00 |
| 29. | 29.02.2024 | Item 601 – Perusing advice from Respondent that he does not have legal representation and objecting to Applicant being legally represented (< 3 folios) | $16.00 |
| 30. | “ | Item 302 – Drawing index to Applicant’s Authorities | $16.00 |
| 31. | “ | Item 501 – Copy of 182 pages of Applicant’s Authorities | $364.00 |
| 32. | “ | Item 601 – Perusing Notice of Listing of Determinative | $16.00 |
| 33. | 05.03.2024 | Item 601 – Perusing Decision letter from FWC re legal representation (< 3 folios) | $16.00 |
| 34. | 08.03.2024 | Item 601 – Perusing Digital Court Book updated – | $100.00 |
| 35. | 11.03.2024 | Item 1108 – Necessary pre-hearing conference with Applicant – 1 hour | $135.00 |
| 36. | “ | Item 1102 – Attendance at Fair Work Commission representing Applicant on Determinative Hearing including oral evidence of witnesses and submissions (3 ½ hours @ $60 / ¼ hour). Travel incurred but not claimed. | $840.00 |
| 37. | 12.04.2024 | Item 601 – Perusing Order and Decision of Deputy President Dobson OAM (60 folios @ $4 / folio) | $240.00 |
| TOTAL | $2995.00 | ||
Conclusion
For the reasons outlined above, I will exercise my discretion and order that The Trustee for BM Supplies Unit Trust T/A Brisbane Milk Supplies pay the costs of Mr Nuttall incurred in engaging Denise Hawthorne Legal, which I have assessed at $2,995.00. An order to this effect will be issued separately.
DEPUTY PRESIDENT
[1] Jason Nuttall v The Trustee for B M Supplies Unit Trust [2024] FWC 307.
[2] Jason Nuttall v The Trustee for B M Supplies Unit Trust [2024] FWC 953.
[3] PR773441
[4] [2024] FWC 953.
[5] PR773441
[6] [2024] FWC 301.
[7] [2024] FWC 953.
[8] [2017] FWCFB 3891.
[9] [2016] FWCFB 2478.
[10] Ibid.
[11] [2016] FWC 2659.
[12] [2024] FWCFB 1175 at [10]-[14].
[13] [2016] FWC 2659 at [28].
[14] [1975] 3 All ER 333.
[15] [2016] FWCFB 6765 at [45].
[16] [2014] FWCFB 810.
[17] [2014] FWCFB 810.
[18] [1975] 3 All ER 333.
[19] s.402.
[20] Tyrone Taiepa v Shinsen Taijutsu Pty Ltd T/A MMA247[2018] FWC 1788 at [34]-[35]..
[21] s.611(2)(a).
[22] s.611(2)(b).
[23] [2016] FWCFB 6765.
[24] Fair Work Explanatory Memorandum to the Fair Work Amendment Bill 2012 at [170]; see also paragraph [43] of this decision.
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