Jinyi Xing v H & M Ferman Pty Ltd T/A Hasmot Pty Ltd
[2011] FWA 6254
•30 SEPTEMBER 2011
[2011] FWA 6254 |
|
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Jinyi Xing
v
H & M Ferman Pty Ltd T/A Hasmot Pty Ltd
(U2011/5760)
COMMISSIONER ROBERTS | SYDNEY, 30 SEPTEMBER 2011 |
Application for unfair dismissal remedy - application for costs.
[1] This decision concerns an application by the Motor Traders’ Association of New South Wales (the MTA) on behalf of H & M Ferman Pty Ltd T/A Hasmot Pty Ltd (the Company) on 21 July 2011 pursuant to s.611 of the Fair Work Act 2009 (the Act). The application seeks the making of an order for costs against Mr Xing.
[2] The application for costs filed on behalf of the Company states the following grounds, in summary:
1. The original application for relief by Mr Xing was made vexatiously and without reasonable cause.
2. It was within the Applicant’s knowledge, as the Company’s in-house accountant, that the Company was in a financial position which made it necessary to make the Applicant redundant.
3. The Applicant’s application for relief relied on “a number of unsubstantiated assertions, allegations or fabrication of facts.”
4. The Applicant provided no witness list to support his claim or any witness statement from himself.
5. The Applicant’s outline of submissions “was a complete fabrication of the true facts as established by the respondent in the respondent’s outline of submissions. The respondent submits that the applicant was cognizant of the fabrication ...”
6. The Applicant was provided with a Separation Certificate showing the reason for termination of employment as redundancy.
7. The Applicant totally failed to establish that the dismissal was not a case of genuine redundancy.
8. The Applicant wrote to the Company offering to discontinue the FWA application and applications to the Fair Work Ombudsman and in the Local Court in return for monies allegedly owed to him by the Company.
9. Two applications to the Local Court by Mr Xing had been struck out and no other action had been initiated by him.
10. “The applicant, having exhausted his attempts, in the respondent’s view, to extort money from the respondent, discontinued his claim under Part 3-2 of the Act on 10 June 2011.”
11. “The applicant made his claim vexatiously in order to extract money from the respondent to which the applicant was not otherwise entitled and to cause the respondent financial damage through the incurring of costs to defend what the respondent submits were spurious unsubstantiated claims initiated by the applicant.”
12. The Company was put to considerable cost in defending applications to the Local Court by Mr Xing.
13. “Based upon the material presented to Fair Work Australia, in particular, the applicant’s attempt to change his claim [to a General Protections claim] following receipt of the respondent’s submissions and, the applicant’s subsequent attempt to seek payment from the respondent, prior to discontinuing his claim under Part 3-2 of the Act indicates that the applicant in pursuing his claim was acting in a vexatious manner towards the respondent which is further confirmed by his spurious claims against the respondent in the Local Court.”
14. In his outline of submissions, Mr Xing “did not properly plead his case causing the respondent significant time and cost in attempting to unravel the applicant’s submissions in order to make a proper response.”
15. Mr Xing’s outline of submissions had “... a tendency to cause prejudice, embarrassment or delay ...”
16. The Applicant should have sought professional advice, he would then have ascertained that his case had no reasonable prospect of success.
[3] The MTA seeks an order for $6,000 against the Applicant on behalf of the Company. That amount represents the costs billed by the MTA to the company in respect of the MTA acting for the Company in opposition to Mr Xing’s application for relief.
[4] Timeline
7 March 2011 Mr Xing files his application (form F2) pursuant to s.394 of the Act alleging that the termination of his employment was unfair.
16 March 2011. The parties are advised by a notice of listing that a telephone conciliation has been set down for 1 April 2011.
31 March 2011. The MTA files a response to Mr Xing’s application (form F3).
1 April 2011. An unsuccessful telephone conciliation is conducted by a FWA conciliator.
12 April 2011. FWA issues Directions and sets down a hearing for 5 July 2011 to conduct an arbitration.
29 April 2011. Mr Xing files an outline of submissions in accordance with Directions.
23 May 2011. The Company files an outline of submissions in response to those of Mr Xing together with witness statements and materials.
23 May 2011. The MTA files an Objection to Application for Unfair Dismissal Remedy (form F4) claiming that the termination was the result of a genuine redundancy.
23 May 2011. The MTA files an application for costs (form F6).
26 May 2011. Mr Xing emails the Tribunal seeking to change his application to a General Protections application and seeking further time to re-write his outline of submissions.
31 May 2011. The MTA writes to the Tribunal objecting to any amendment to Mr Xing’s original application.
3 June 2011. Mr Xing emails the Company and the MTA advising that he would like to discontinue his application before FWA together with other legal actions and claims in return for an unstated sum of money.
3 June 2011. The MTA emails Mr Xing at 10.50am declining to make any payment to him for any matter or reason and advising him that if he wished to discontinue his FWA application, he should file a Notice of Discontinuance (NOD) (form F50) with the Tribunal and further advising him that he should obtain a NOD application from FWA.
3 June 2011. Mr Xing emails FWA at 4.51pm advising that he will discontinue his application on financial grounds and following discussions with a legal aid solicitor and asking for advice on how to discontinue.
3 June 2011. FWA supplies Mr Xing with a NOD form.
4 June 2011. Mr Xing acknowledges receipt of the NOD form.
10 June 2011. Mr Xing files a NOD wholly discontinuing his application for relief.
10 June 2011. FWA issues a Notice of Listing cancelling the hearing scheduled for 5 July 2011.
20 June 2011. The MTA files a further application for costs (form F6) and supporting submissions against Mr Xing.
24 June 2011. Mr Xing files his response to the costs application made on 20 June 2011.
6 July 2011. FWA issues Directions concerning a hearing of the costs application, setting it down for 12 August 2011. The Company is directed to file its material by 21 July 2011 and Mr Xing is directed to file his material by 4 August 2011.
21 July 2011 The Company files its submissions in support of its application for costs.
21 July 2011 The Company files an Application for Security for Payment of Costs (form F5).
12 August 2011 Costs hearing conducted.
[5] The above timeline is not totally exhaustive but covers those matters which are significant to my decision making.
Background
[6] Mr Xing was employed by the Company from on or about 16 March 2010. In his application for relief, Mr Xing maintains that his employment was terminated on or about 8 March 2011. In its Employer’s Response to Application for Unfair Dismissal Remedy (form F3) the Company gives the termination date as 21 February 2011. For the purposes of this decision, the actual termination date is not determinative. It appears that from the documents that Mr Xing was employed by the Company as an accountant.
[7] The Company maintained that the termination of Mr Xing’s employment arose as a result of a genuine redundancy. Mr Xing disputed that the redundancy was genuine.
Legislative provision
[8] Section 611 of the Act provides:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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.
(3) A person to whom an order for costs applies must not contravene a term of the order.”
Hearing of 12 August 2011
[9] The matter came on for hearing before me on 12 August 2011. The Company was represented by Mr T. Vargo of the MTA. Mr Xing did not appear at the hearing and attempts to contact him through my associate and also through the interpreter who was present to assist Mr Xing met with no success. I then decided to conduct the hearing in Mr Xing’s absence, given that the onus was on the Company to satisfy me that I should exercise my discretion to award costs against Mr Xing. I also had the benefit of written materials filed by Mr Xing and those have been considered by me in the decision making process.
[10] I will not repeat the detail of the written submissions filed for the Company as they largely address the matters set out at paragraph [2] supra. Mr Xing’s submissions largely went to the alleged unfairness of the termination of his employment and arguments that the alleged redundancy was not genuine and that the Company had generally acted with mala fides towards him. Each side accused the other of abuse of process.
Conclusions and Finding
[11] As noted above, I have paid regard to all the material contained in this matter’s rather extensive file, including all materials relating to the original substantive application and the jurisdictional objection. I have also paid regard to the case law cited by Mr Vargo as it relates to this costs application.
[12] It is clear on the face of the wording in section 611(1) of the Act that there is a presumption against the awarding of costs in FWA matters and the remaining subsections give FWA discretion to order the payment of costs if a Member is satisfied that a party responded to an application vexatiously or without reasonable cause or where FWA is satisfied that it should have been apparent to an Applicant that his or her case had no reasonable prospect of success. There is no automaticity in the ordering of costs. Costs do not ‘follow the cause’ as a matter of course. There is nothing in the materials filed by Mr Xing in relation to the substantive application that would indicate that he did not believe that his alleged redundancy was bogus and that the termination of his employment was unfair. In my view, he was entitled to pursue his case and there were no offers of settlement by the Company. The Company was, of course, entitled to take that position. The Company was also entitled to vigorously defend its position during the conciliation phase and so was Mr Xing.
[13] It appears to me that the Company is arguing in this application that I should form the view after reading its materials that its case was self-evidently rock solid and that it should be apparent to me as well as Mr Xing that the original application never had the slightest chance of success. For example, the Company maintains that Mr Xing’s position as in-house accountant would have led him to the knowledge that the termination of his employment on the ground of redundancy was at all times genuine. This is possible, but it is also possible that Mr Xing would have argued that the position he held enabled him to legitimately form the view that the alleged redundancy was bogus.
[14] I am unable to share the Company’s certainty, as Mr Xing’s substantive application was withdrawn a significant time prior to the scheduled arbitration. In a case like this, where there was no testing of the evidence it would be quite unsafe for me to draw the conclusion that Mr Xing did not have even an arguable case or that his application was vexatious. The Company may have formed the view that Mr Xing’s outline of submissions was designed to cause his former employer embarrassment or delay but I am unable to conclude this was the case.
[15] In Miller v Koornang Pty Ltd t/as Rosstown Hotel[2010] FWA 8304, Commissioner Gooley said:
“[13] Wilcox CJ in Kanan v Australian Postal & Telecommunications Union 1 considered the approach to be taken to assessing whether an applicant instituted a proceeding without reasonable cause:
‘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.’ ”
[16] I respectfully agree with the reasoning in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 157.
[17] Other matters raised by and on behalf of the Company concerning legal actions taken by Mr Xing in other jurisdictions, however annoying those actions were to the Company, cannot influence me in this application for costs.
[18] In relation to the argument that Mr Xing failed to obtain professional advice and that this should in some way be held against him is not sustainable. I agree with the reasoning of Commissioner Gooley in Koornang where the learned Commissioner said:
“[32] I also do not accept that that an employee is required to get legal advice to enable them to assess whether their application has reasonable prospects of success.”
[19] The timeline set out at [4] supra shows that Mr Xing fairly promptly discontinued his application for relief after the Company rejected his final approach for a financial settlement on 3 June 2011. Also on 3 June 2011, the MTA advised Mr Xing that he should file a NOD and further advised him that he could obtain the appropriate form from FWA. Mr Xing contacted the Tribunal on the same day, was supplied with the form and lodged it on 10 June 2011. This was some 25 days before the scheduled arbitration. Mr Xing cites as his primary reason for discontinuing his application that he does not have the financial resources to pursue it.
[20] In all the circumstances of this case, I find that this is not a case where I should exercise my discretion to award costs. The application for costs is dismissed.
COMMISSIONER
Appearances:
T Vargo of MTA for H & M Ferman P/L.
Hearing details:
2011.
Sydney:
August 12.
1 (1992) 43 IR 157, at 264-265
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