Jeffrey Hall v Hannanprint Pty Ltd T/A Hannanprint
[2014] FWC 2731
•28 APRIL 2014
[2014] FWC 2731 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jeffrey Hall
v
Hannanprint Pty Ltd T/A Hannanprint
(U2013/2971)
COMMISSIONER BISSETT | MELBOURNE, 28 APRIL 2014 |
Application for costs orders against lawyer or paid agent - unreasonable act or omission - client legal privilege - unfair dismissal.
[1] On 10 February 2014 I handed down a decision ex tempore in the above matter in which I found that Mr Hall was not a person protected from unfair dismissal (s.382 of the Fair Work Act 2009 (the Act)). In particular I upheld the objection of Hannanprint Pty Ltd (Hannanprint) and found that Mr Hall earned above the high income threshold and was not covered by an award or agreement (the primary matter).
[2] At the commencement of the proceedings in the primary matter I granted both Mr Hall and Hannanprint permission to be represented by a lawyer or paid agent. Mr Hall was represented by Mr Gregory Christodoulou and Hannanprint by Ms Sweet of Counsel.
[3] Hannanprint has now made an application for costs pursuant to s.401 of the Act against Australian Compensation Group (ACG) and/or its employee Mr Christodoulou. The application is opposed.
Background
[4] The background to this costs application is not controversial.
[5] Mr Hall was dismissed from his employment with Hannanprint on 20 August 2013. On 2 September 2013 he contacted Mr Christodoulou with respect to the termination of his employment. On 3 September 2013 Mr Christodoulou lodged an application on behalf of Mr Hall pursuant to s.394 of the Act seeking relief from unfair dismissal (Form F2).
[6] On 26 September 2013 Hannanprint filed with the Commission an employer response to the application (Form F3). In that response Hannanprint raised a jurisdictional objection claiming that the application had no reasonable prospect of success. The application was subject to conciliation by a Fair Work Commission (the Commission) Conciliator on 16 October 2013 where it did not settle.
[7] On 29 October 2013 directions were issued by the Commission for the filing of submissions and witness statements by each of the parties. Following the withdrawal of Hannanprint’s jurisdictional objection on 5 November 2013 and adjournment request, the application was listed for arbitration for 10-12 February. In accordance with the directions Mr Christodoulou filed submissions and a witness statement for Mr Hall and Minter Ellison filed submissions and 11 witness statements for Hannanprint.
[8] On 20 January 2014 Minter Ellison sent a letter to Mr Christodoulou in which it raised jurisdictional issues with respect to the high income threshold and award or agreement coverage of Mr Hall. On this basis Minter Ellison stated that it believed Mr Hall was not protected from unfair dismissal. The letter foreshadowed a jurisdictional objection on these grounds. A draft statutory declaration of Mr Nubley of Hannanprint was also enclosed.
[9] Mr Christodoulou responded on 21 January 2014 in which he stated that Mr Hall: was required to use his car for work purposes and declared to the ATO that he used his vehicle for work purposes 75% of the time; was not covered by an enterprise agreement but was covered by the Graphic Arts, Printing and Publishing Award 2010 (the Award) and was, therefore, protected from unfair dismissal.
[10] On 22 January 2014 Minter Ellison again wrote to Mr Christodoulou disputing Mr Hall’s claims with respect to his use of his motor vehicle for work purposes and the Award coverage. That letter also referred Mr Christodoulou to a number of authorities Minter Ellison said were relevant and reiterated its view that Mr Hall should discontinue his application.
[11] Mr Christodoulou replied on the same day restating his opinion that Mr Hall was protected from unfair dismissal. (The exchange between the parties on 20-22 January 2014 is referred to as the ‘January correspondence’ in this decision.)
[12] On 28 January 2014 Hannanprint filed a jurisdiction objection to the application for unfair dismissal on the grounds that Mr Hall earned above the high income threshold and was not covered by an award or an enterprise agreement.
Preliminary issue: Client legal privilege
[13] Before turning to the parties submissions on costs I must first determine if Mr Christodoulou can claim client legal privilege. This matter is in dispute between the parties and at the hearing of the costs application I indicated I would deal with this issue as a preliminary matter.
[14] In his evidence and submissions Mr Christodoulou claims client legal privilege as a lawyer in respect of communications between himself and Mr Hall.
[15] Hannanprint submits that the privilege is not properly asserted and is not maintainable by Mr Christodoulou. On this basis it submits that an inference can be drawn that documents over which privilege is claimed would not assist Mr Christodoulou in the costs application.
[16] Hannanprint says that it made its costs application against Mr Christodoulou and/or ACG as Mr Christodoulou had presented himself as a paid agent representing Mr Hall. Hannanprint submits that he did this in filing submissions on behalf of Mr Hall where he signed those submissions as the ‘industrial advocate for the applicant’. At no time did he indicate he acted as a lawyer.
[17] Hannanprint says that Mr Christodoulou has not produced a costs agreement or other evidence of any legal relationship between himself and Mr Hall. It submits that the case law indicates that it is not sufficient for Mr Christodoulou to merely assert a claim of privilege, rather it is necessary for him to show that the documents or conversations for which he asserts privilege are, in fact, privileged. 1
[18] Mr Christodoulou gives evidence that he is admitted to the legal profession by the Supreme Court of NSW, that he holds a practicing certificate and is a member of the Law Society of New South Wales. Further, his uncontested evidence is that he acted for Mr Hall in his capacity as a lawyer.
[19] Mr Christodoulou submits that client legal privilege bars him from disclosing the content of all of his communications with Mr Hall in preparing for the lodgement and subsequent hearing in the primary matter.
Findings as to client legal privilege
[20] A lawyer can claim privilege, a paid agent cannot.
[21] I am mindful that it is Mr Christodoulou’s obligation to demonstrate that client legal privilege exists. He has asserted that it does and has given sworn evidence to this effect. He was not cross examined on this and his evidence not otherwise subject to objection.
[22] Mr Christodoulou says that he expected to be asked, when he sought permission to appear, if he was a lawyer but this question was not asked. It was, in this respect, information he could have volunteered. He had every opportunity to be clear as to the capacity in which he acted, instead he obfuscated the issue. He signed the Form F2 application and indicated under capacity/position that he was the ‘representative of the applicant.’ On the submissions filed with the Commission in the primary matter he indicated that he lodged materials and made submissions as an ‘industrial advocate of the applicant’.
[23] It is clear from Mr Christodoulou’s correspondence with Minter Ellison that he is qualified in law. The signature-block on his emails indicates that he holds a Bachelor of Commerce, a Bachelor of Laws and a Master of Laws. Although this is not evidence that he is qualified to practice law, a quick search of the NSW Law Society directory shows that he is a lawyer with a current practicing certificate.
[24] Contrary to the submissions of Hannanprint that it understood Mr Christodoulou was acting as a paid agent (as opposed to a lawyer), in correspondence to the Commission on 5 November 2013, when it notified of its decision to withdraw an earlier jurisdictional objection, Minter Ellison for Hannanprint (who continue to instruct in this application) made reference to a letter sent by it to ‘the lawyers for the Applicant, Mr Christodoulou of Australian Compensation Group...’ 2 It would appear that in November 2013 Hannanprint understood Mr Christodoulou to be acting as a lawyer for Mr Hall.
[25] I have given consideration to the submissions and evidence of both parties on this question. Whilst it is not obvious why Mr Christodoulou did not state on any material that he was acting as Mr Hall’s lawyer, I am satisfied that he did act for Mr Hall in the primary proceedings in this capacity.
[26] Mr Christodoulou is therefore within his rights to assert client legal privilege with respect to communications between himself and Mr Hall. While that privilege resides with Mr Hall I am satisfied that it has not been waived.
The costs application
[27] The costs application is brought pursuant to s401(1A)(b) of the Act.
[28] Section 401 of the Act states:
401 Costs orders against lawyers and paid agents
(1) This section applies if:
(a) an application for an unfair dismissal remedy has been made under section 394; and
(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and
(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.
(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:
(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or
(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under this section 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.
[29] The cost application says that Mr Christodoulou is a lawyer and/or paid agent and, by his ‘unreasonable acts or omission’, he caused costs to be incurred by Hannanprint.
Submissions as to costs
Hannanprint
[30] Hannanprint submits that the terms ‘unreasonable act’ and ‘omission’ as used in s.401 of the Act are not defined in the Act. They were, however, considered in Setefano v ICF (Australia) T/A IC Frith and Associates:3
The Macquarie Dictionary definitions and a plain reading suggest that the question is whether Livingstones caused costs to be incurred by the Respondent by doing something (eg continuing with the claim) not based on sound judgement or by a failure to make use (of information available) or through a failure to do (the necessary research).
[31] Whilst this decision was overturned on appeal, this finding was not disturbed.
[32] Hannanprint submits that there was an obligation on Mr Christodoulou to satisfy himself as to the jurisdiction of the Commission to hear Mr Hall’s application prior to making the application. In particular it says that Mr Christodoulou was required to satisfy himself that one or more limbs of s.382(b) (protection from unfair dismissal) applied to Mr Hall. In this respect it submits he should have taken detailed instructions from Mr Hall and done the necessary research to reach the requisite satisfaction prior to making the application.
[33] Hannanprint says that the assertions that Mr Christodoulou took proper instructions and had regard to the established authorities are without foundation. On this basis it says it can be reasonably inferred that Mr Christodoulou acted unreasonably.
[34] Hannanprint submits that it is clear from the evidence of Mr Christodoulou that, prior to lodging the application for unfair dismissal, he was aware of Mr Hall’s remuneration. 4 It says that Mr Christodoulou was aware that Mr Hall’s income exceeded the high income threshold. It is also submits that had he taken the relevant instructions and considered the authorities he would have concluded that Mr Hall was not covered by the Award.
[35] Hannanprint relies on the evidence of correspondence sent to Mr Hall by Minter Ellison 5 where Mr Christodoulou was put on notice with respect to Mr Hall’s income. It submits that a reasonable person would not infer that a private vehicle would be used to make work journeys and that, in any event, he produced no documentation to support his assertion that the motor vehicle was used 75% of the time for work purposes.
[36] Correspondence to Mr Christodoulou set out the settled authorities with respect to award coverage. Had he taken appropriate instructions and researched the matter once these authorities were brought to his attention he would have known that the claim for unfair dismissal was not sustainable. Instead, Hannanprint says Mr Christodoulou did precisely what the authority in Carpenter v Corona 6says should not be done and concentrated on the ‘one percenters’ in an effort to gather evidence of award coverage.
[37] Hannanprint says that Mr Hall was an honest witness in the primary hearing who was frank in his answers under cross examination. That the cross examination quickly uncovered the true pattern of his car usage and his responsibilities at work is further evidence that Mr Christodoulou acted unreasonably in the conduct of the primary matter.
[38] Hannanprint submits that costs should be payable from 3 September 2013 when the application for unfair dismissal was lodged. If that is not the case then it submits they should be payable from 20 January 2014 when Minter Ellison outlined its concerns with respect to jurisdictional matters and set out the relevant authorities. Had Mr Christodoulou taken proper instructions at this point in time he would have know there was no jurisdiction. Should this be rejected costs should be payable from 28 January 2014 when Hannanprint lodged its material in relation to the jurisdictional objection and Mr Christodoulou was aware of the weight of evidence in support of the jurisdictional objection.
[39] Hannanprint submits that those who are granted permission to appear before the Commission pursuant to s.596 of the Act have a duty to not bring unmeritorious claims which are patently untenable based on settled authority. This is analogous, it says, to the finding in E Allen and Ors v Fluor Construction Services Pty Ltd 7 that:
...legal representatives have a duty to bring all relevant authorities to the attention of the Commission, whether or not they assist the party they represent. A lawyer’s duty to the Commission is paramount and supercedes a lawyer’s duties to their client. A grant of permission to appear pursuant to s.596(1) of the Act is based upon a presumption that the representative to whom leave is granted will conduct themselves with probity, candour and honesty. The duty of advocates in that regard has been long recognised by the Commission. 8
[footnotes omitted]
[40] Hannanprint submits Mr Christodoulou’s unreasonable maintenance of the position that Mr Hall was protected from unfair dismissal caused costs to be incurred by it.
Mr Christodoulou
[41] Mr Christodoulou’s evidence is that he consulted with and took relevant instructions from his client in relation to making the unfair dismissal application, in considering the employer response to the application (Form F3) and in relation to the January correspondence from Minter Ellison. His evidence is that he considered the authorities referred to by Minter Ellison in its correspondence and had grounds for either considering them not relevant or for dealing with them during the proceedings on the primary matter. Mr Christodoulou submits that Hannanprint misread his witness statement and did not cross examine him on its content.
[42] In consideration of the material filed in support of the jurisdictional objection Mr Christodoulou gives evidence as to why he formed the view that there was a real chance the Mr Hall’s employment was covered by the Award and why he considered that at least 50% of the Mr Hall’s car allowance should not be included in his earnings.
[43] Mr Christodoulou was not cross examined with respect to his evidence that he properly sought and received instructions from Mr Hall as was necessary for the conduct of the case.
[44] Mr Christodoulou submits that it will more often than not be the case that a jurisdictional objection cannot be determined until evidence is received and submissions made by the parties.
[45] On the specific complaints made by Hannanprint, Mr Christodoulou submits that:
- It is not unusual for there to be correspondence between parties in the lead up to litigation in an attempt to narrow or fine tune the areas of dispute or convince a party to withdraw. That one party does not agree to what is sought by the other in such circumstances does not mean there has been an unreasonable act or omission.
- Just because Mr Christodoulou did not agree with the views of Minter Ellison on the authorities and what they stood for does not mean there was an unreasonable act or omission on his part. The view on the authorities is not as clear cut as Hannanprint would put.
- At the time of the January correspondence there was no jurisdictional objection by Hannanprint Pty Ltd to the application for unfair dismissal.
[46] Mr Christodoulou submits that awarding costs should be seen as the exception.9 He further submits that the existence of client legal privilege should be taken into account in exercising the discretion in s.401 of the Act to award costs.10 Further, the Commission should exercise caution in considering a costs order as Mr Christodoulou was acting for Mr Hall as his lawyer. In UTSA Pty Ltd (in liquidation) and Ors v Ultra Tune Australia Pty Ltd and Ors 11 Habersberger J considered a variety of reasons for such caution including that ‘it will be often difficult for a Court to know all the details and circumstances of the solicitor’s instructions.’12
[47] If I did find that there had been costs incurred by Hannanprint and these arose from an unreasonable act or omission of Mr Christodoulou, Mr Christodoulou says he should not be liable for costs from the time Mr Hall’s application for unfair dismissal was lodged but from the time the jurisdictional objection was made on 28 January 2014.
Jurisdictional requirements
[48] A costs order pursuant to s.401 of the Act can only be made if jurisdictional prerequisites are met. These are that an application for unfair dismissal has been made; a person party to the matter has engaged a lawyer or paid agent and permission was required pursuant to s.596 for that lawyer or paid agent to represent the party.
[49] In this case it is not disputed that Mr Hall made an application for unfair dismissal, he had engaged Mr Christodoulou to represent him and Mr Christodoulou required permission of the Commission under s.596 to do so.
[50] I am therefore satisfied that the jurisdictional prerequisites have been met.
[51] It is necessary, as the next step, to determine if, through some unreasonable act or omission, Mr Christodoulou did cause costs to be incurred by Hannanprint. Even if I do find this to be the case it does not automatically follow that a costs order should be made. The wording of s.401(1A) makes it clear that a discretion exists with the Commission in deciding whether to make such an order.
Consideration
[52] Having determined that the necessary jurisdictional prerequisites have been met the matter now to be determined is if Mr Christodoulou engaged in an unreasonable act or omission in respect of the conduct or continuation of the matter.
[53] The meaning of ‘unreasonable’ was considered in Construction, Forestry, Mining and Energy Union v Bengalla Mining Company Pty Limited (No 2) 13where Katzman J found:
24. The section refers to “an unreasonable act or omission”, not to a course of conduct.
25. “Unreasonable” can mean several things. The Macquarie Dictionary definition is:
1. not reasonable; not endowed with reason.
2. not guided by reason or good sense.
3. not agreeable to or willing to listen to reason.
4. not based on or in accordance with reason or sound judgement.
5. exceeding the bounds of reason; immoderate; exorbitant.
26. It seems to me that if the union’s conduct can be characterised as not endowed or guided by reason or good sense, or not based on or in accordance with reason or sound judgment, it would be unreasonable within the meaning of s 570. While the Court should not rush to the conclusion that a costs order should be made, neither should it baulk at the prospect if the circumstances warrant it. No party should assume that any old allegation may be made in proceedings arising under the FW Act because it is unlikely to be penalised in costs.
27. Certainly, the mere fact that the union made allegations of wrongdoing which it later failed to pursue does not mean that its actions were unreasonable...
[54] A necessary consideration in this matter is that the representative is a lawyer and privilege is not waived with respect to communications between him and his client. In Levick v Deputy Commissioner of Taxation14 the Full Court of the Federal Court concluded:
[43] We endorse the emphasis on caution in making orders against solicitors, particularly as it will often be difficult for a court to know all the details and circumstances of the solicitor’s instructions. We share the concern expressed by Donaldson MR and Dillon LJ in Orchard about the risk of a practice developing whereby solicitors endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of a personal costs order being made against them.
[55] In Livingstones Australia v ICF (Australia) Pty Ltd T/A IC Frith & Associates 15 a Full Bench of the Commission, in considering whether a case had ‘no reasonable prospect of success’ within the meaning of the Act, made pertinent observations with respect to instructions given to a lawyer by a client:
[77] A legal representative or paid agent can only ever act on instructions. If a case is to be discontinued because it is doomed to failure that will always require the instructions of the client. Legal advice given to the client on prospects will be privileged and cannot be disclosed by the representative without a waiver of the privilege. If a client refuses to accept advice that his or her application has poor prospects of success and should be discontinued, and instead gives instructions for the matter to proceed, the representative may decline to act further for the client.
...
[79] If a representative decides that the circumstances of the case permit them to continue acting notwithstanding the rejection of advice that the prospects of success are poor, it will not be open to a representative to volunteer that fact to the Commission on a costs application.
[80] While there is obvious force in the argument advanced by the appellant based on the obligation to act on instructions, its unqualified acceptance will result in a situation where it will rarely, if ever, be possible to establish that a representative has acted unreasonably in continuing an application that did not have reasonable prospects of success. That result is at odds with the clear legislative purposes of s.401, namely to enable representatives to be held accountable for the unreasonable conduct or pursuit of matters. From our own experience we can say that there is a certain incidence of unfair dismissal and similar applications filed in the Commission that are unmeritorious and appear to have been commenced in the expectation that a modest settlement can be achieved because it is cheaper for the employer to pay what is known as “go away” money than to defend and defeat the claim. Section 401 ought be available when the case being pursued by the representative has no reasonable prospects of success.
[81] It is open to a member of the Tribunal, in an appropriate case, to draw an inference from the particular circumstances, that the representative, if acting reasonably, must have appreciated that the case did not have reasonable prospects of success such that the representative was obliged to advise the client to withdraw his application and cease acting if that advice was not accepted.
[56] I have been mindful of the cautions expressed in these authorities in making my decision on this matter.
[57] It seems to me that the basis of Hannanprint’s submission is that Mr Hall was an honest and forthright witness in giving his evidence in the primary matter. Mr Christodoulou could, and should, have discovered this evidence by questioning Mr Hall himself before lodging the application for unfair dismissal or at least once he had received the January correspondence and was alerted to the matters contained therein.
[58] Mr Hall gave evidence in the primary matter that he had been claiming on his tax returns that he used his car 75% of the time for work related purposes. His PAYG tax was being deducted on this basis as was evidenced by his pay slips. His evidence was that this was what he was told to do when he first started receiving the allowance by the company’s then financial controller.16 There is no reason or evidence on which to conclude that Mr Hall did not maintain this position in his discussions with Mr Christodoulou.
[59] Mr Christodoulou acknowledged that in September 2013 he, ‘was concerned that Mr Hall’s annual remuneration might exceed the high income threshold’.17 This does not, however, indicate that he knew as a fact that Mr Hall’s remuneration was above the high income threshold but rather that the question of the high income threshold was a matter he properly needed to consider. This is to be expected given Mr Hall’s salary of $120,000 and that, at the time of Mr Hall’s dismissal, the high income threshold was $129,300
[60] It is often the case that high income threshold issues will be determined not on the basis of salary alone but on the proportions of personal and business use of items in addition to a base salary. Just because Mr Hall received a car allowance there was no reason to conclude, on that fact alone, that the car was only used for private purposes. As Mr Christodoulou put in written submissions in the primary matter it was only necessary for him to demonstrate that Mr Hall used his car (for which the car allowance was paid) half the time for work purposes for his annual rate of earnings to be below the high income threshold. The evidence in cross examination of Mr Hall that he only used his car for about 15% led Mr Christodoulou to, correctly, abandon the matter.
[61] Whilst it may have been better for Mr Christodoulou to have asked his client the percentage of his car usage for work purposes rather than the inquiry he made, his approach to the issue from an obtuse angle does not make his actions in this respect unreasonable.
[62] That Mr Christodoulou was ultimately not successful in arguing that his client earned less than the high income threshold is not, of itself, grounds to find an unreasonable act or omission of Mr Christodoulou in the conduct of the matter.
[63] Mr Hall also gave evidence in the primary matter as to how he saw his duties align against the classification descriptors in the Award. Whilst this analysis might be misguided it is not evidence of an unreasonable act or omission by Mr Christodoulou. Whilst more rigorous research and testing of Mr Hall may have demonstrated to Mr Christodoulou’s satisfaction that Mr Hall was not award covered this cannot be assumed. I do note that the classification of Mr Hall was also confused with the existence of two different duty statements with respect to the role.
[64] Hannanprint says that it should have been obvious, on the authorities referred to in the January correspondence, that Mr Hall was not covered by the Award. Further it says that Mr Christodoulou failed to address those authorities in submissions in the primary matter.
[65] It is a fact that minds will differ before the Commission as to what can or should be taken from authorities. The authorities referred to by Minter Ellison in the January correspondence were as recent as 2012 and 2013 suggesting that award coverage remains a live, contested issue before the Commission. Mr Christodoulou argued, albeit not successfully, as to why the authorities could be distinguished.
[66] Again while the approach of Mr Christodoulou may have been misguided it is a leap from this point to a conclusion that he acted unreasonably or omitted matters such that an order for costs should be made against him.
[67] Whether or not Mr Christodoulou acted reasonably or not will turn on an objective consideration of the conduct. In Australian and International Pilots Association v Qantas Airways Ltd (No 3) 18 Tracey J considered a costs application under s.824(2) of the Workplace Relations Act 1996 which is in the same for as s.401(1A). He found that:
32. A pleading which discloses no reasonable cause of action may be struck-out. It does not, necessarily, follow that the party whose pleading has been struck-out acted unreasonably by seeking to rely on the deficient pleading. An objective analysis of the particular party’s conduct will be necessary in each case.
33. It is correct, as the respondent submits, that, at an early stage in the proceeding, it put the applicant on notice as to the deficiencies which ultimately led to the striking-out of the first amended statement of claim. The applicant did not ignore or disregard the respondent’s submissions. It considered them, accepted some of them and made certain amendments to the statement in August 2006. The respondent again made detailed submissions on why it considered the statement of claim still did not plead a sustainable cause of action. The applicant again considered its position, but, as it was entitled to do, advanced detailed arguments supporting the efficacy of the revised pleading...
36. In dealing with an application for costs under s 347(1) of the Act, in Standish v University of Tasmania (1989) 28 IR 129, Lockhart J was called on to decide whether the proceeding had been instituted “without reasonable cause”. His Honour drew a distinction between the pursuit of an argument which does not succeed and the institution of a proceeding which is misconceived in the sense of being incompetent: see at 138-9. This distinction may, in my view, assist in determining whether conduct is unreasonable for the purposes of s 824(2). The prosecution of any incompetent or hopeless case can be regarded as “an unreasonable act” within the meaning of s 824(2). Conversely, in my opinion, the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act. In my view the applicant’s defence of its pleadings in the first strike-out application falls into the latter category.
[68] Whilst in the primary matter Mr Christodoulou was not successful, there was an argument to be put on behalf of his client and he sought to do so. I am satisfied that he took on board the matters and authorities raised in the January correspondence and sought to deal with these in the primary matter.
[69] Even if I did find that Mr Christodoulou had, through some unreasonable act or omission, caused costs to be incurred by Hannanprint this would not lead me necessarily to make the order sought by Hannanprint. In CFMEU v Clarke the Federal Court decided that inefficient conduct of a matter did not mean the Commission should exercise its discretion to make a costs order:
...there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable: Australian and International Pilots Association 162 FCR at 402; Standish v University of Tasmania (1989) 28 IR 129 at 138-139. Simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion in s 824(2) of the WR Act to make a costs order. In our view, neither the late abandonment of some of its defence, nor the use of a notice of contention to advance a previously minor and ultimately unsuccessful argument, crosses the threshold of being “an unreasonable act or omission” for the purposes of s 824(2). True it is that the concession ultimately given by the respondent that it regarded the decision of Nicholson J as erroneous could have been given earlier. However, it was a concession which was, in light of the decision of this Court on the substantive appeal, properly made and beneficial to the appellants. Although it is arguable that the lateness of the concession may have put the appellants to some extra costs, we are of the view that it cannot be characterised as “unreasonable” in the circumstances of this case. Indeed, while courts should use the discretion in s 824(2) to ensure that parties to litigation arising from the WR Act do not engage in unreasonable acts and omissions which put the other party to undue expense, they should also be careful not to exercise the discretion with too much haste, given that such haste may discourage parties, for fear of an adverse costs order, from pursuing litigation under the WR Act in the manner which they deem best.19
Conclusion
[70] The jurisdictional objection that Mr Hall was not protected from unfair dismissal was not raised until January 2014, some 3 months after the application for unfair dismissal was made. Mr Christodoulou did not act unreasonably in pursuing the unfair dismissal claim at this stage. There is no evidence that, at the time of making the application, Mr Christodoulou was aware or considered that the claim was ‘misconceived’ or that by some unreasonable act or omission Mr Christodoulou caused costs to be incurred by Hannanprint. Based on instructions he received from Mr Hall he believed, and proceeded, on the basis that the Mr Hall was protected from unfair dismissal. It is to be remembered that an application for unfair dismissal must be made within 21 days of the date of dismissal. This limitation places some constraint on the ability to fully explore all issues prior to the making of an application. Whilst I make no finding as to the effect of the time limit, it is a fact of the Act, it will affect behaviour and it should not be ignored. Having found so, the existence of the 21 day limit within which to make a claim can rarely, if ever, be an excuse for making a claim devoid of any supportable grounds.
[71] I find that Mr Christodoulou did not, at the time of making the application, cause Hananprint to incur costs by some unreasonable act or omission on his part.
[72] I accept that the correspondence between Minter Ellison and Mr Christodoulou is reflective of many of the exchanges between representatives of parties prior to a matter going to hearing. I am satisfied that such an exchange is designed to encourage the other party to settle or further limit or discontinue the matter. That some authorities were highlighted, and that Mr Christodoulou formed a different opinion in the exchange is not evidence of an unreasonable act or omission. The correspondence does provide a point in time for the grounding of when costs may have been unnecessarily incurred. There is, however, evidence in the submissions made by Mr Christodoulou on the jurisdictional objection that he had considered the content of the correspondence from Minter Ellison and sought to deal with it.
[73] Mr Christodoulou was entitled to pursue Mr Hall’s application on the grounds that he reasonably believed Mr Hall to be protected from unfair dismissal on the basis of instructions he received from Mr Hall. More rigorous questioning of his client may have elicited instructions such that Mr Christodoulou may have reached a conclusion as to the misguided nature of the case. I decline, in this instance, to infer that this would be so.
[74] I therefore find that Mr Christodoulou did not cause Hannaprint to incur costs through some unreasonable act or omission on his part at the time of the January correspondence or by pursuing the application after Hannanprint lodged its jurisdictional objection on 28 January 2014.
[75] My conclusion on this matter should not be taken as an endorsement as to how Mr Christodoulou approached the issue of the dismissal when brought to him by Mr Hall. He would be wise to head the caution sounded in the decision in Livingstones. Mr Christodoulou would also be wise to consider, in future matters before the Commission, disclosing at the earliest opportunity, the capacity in which he acts for his client. There is nothing to be gained - and potentially a lot to lose - in describing himself as an ‘industrial advocate’ when he is, in fact, acting a lawyer.
[76] For these reasons the application for costs by Hannanprint is dismissed.
COMMISSIONER
Appearances:
A. Sweet of Counsel for Hannanprint Pty Ltd
A. Duffy of Counsel for Australian Compensation Group/Mr Christodoulou
Hearing details:
2013.
Melbourne;
1 April.
1 See Kennedy v Wallace and Others (2004) 142 FCR 185, [13] per Black CJ and Emmett J.
2 Exhibit C1, attachment GC2.
3 [2012] FWA 10682.
4 See exhibit C1, paragraph 4.
5 See exhibit G1, attachments ZRG1-5.
6 Print PR924136 (AIRC, unreported, 20 October 2002).
7 [2014] FWCFB 174.
8 Ibid, [48].
9 Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143, [29].
10 Levick v Deputy Commissioner of Taxation [2000] FCA 674, [43].
11 [2004] VSC 105.
12 Ibid, [45],
13 [2013] FCA 362.
14 [2000] FCA 674.
15 [2014] FWCFB 1276.
16 Transcript PN344.
17 Exhibit C1, paragraph 4.
18 (2007) FCA 879.
19 [2008] FCAFC 143, [29].
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