John Patrick Bracken v OzForex Limited T/A OFX - [2024] FWCFB 356

[2024] FWCFB 356

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

ss.400A, 611–Costs

John Patrick Bracken
v

OzForex Limited T/A OFX

(C2023/1801)

VICE PRESIDENT ASBURY

DEPUTY PRESIDENT MASSON
COMMISSIONER CONNOLLY

BRISBANE, 11 SEPTEMBER 2024

Application for an order for costs pursuant to ss. 400A and 611 of the Fair Work Act 2009.

Background

This decision concerns an application made by OzForex Limited (OFX) on 25 September 2023, seeking an order for costs, against Mr John Patrick Bracken. The costs application is made under ss. 400A and 611 of the Fair Work Act 2009 (FW Act). In the Form F6 Application for costs, OFX states that the matters in which costs are sought are C2023/1801 and U2021/4619. The decision makers in these matters are said to be the “Full Bench and Commissioner Ryan”. The dates of the decisions in each matter are listed as 22 September 2023 and 10 March 2023 respectively.

In summary, the history of the matters to which the costs application relates is as follows. Mr Bracken filed an application for an unfair dismissal remedy on 28 May 2021. The matter was heard over a 5-day period on 3, 8, 9 and 22 September 2021 and 18 October 2021. In a decision (first decision)[1] issued on 14 April 2022, Commissioner P Ryan dismissed Mr Bracken’s unfair dismissal application. On 5 May 2022, Mr Bracken lodged an appeal against the Commissioner’s first decision (first appeal) and was successful – albeit partially. In a decision issued on 12 September 2022, a Full Bench of the Commission (first Full Bench) quashed the Commissioner’s decision and remitted the matter to the Commissioner for redetermination, on a limited basis.

Upon redetermining the matter, the Commissioner again dismissed the application by a decision issued on 10 March 2023 (second decision).[2] On 31 March 2023, Mr Bracken lodged an appeal against the second decision which was heard by a differently constituted Full Bench (second Full Bench). In a decision issued on 22 September 2023[3] the second Full Bench dismissed Mr Bracken’s appeal.

In its application for costs, OFX sought costs for what it describes as “defending multiple first instance and appeal proceedings” for a period from 3 August 2021, excluding costs incurred in the period from 6 May to 9 June 2022 in connection with the first appeal. OFX stated that it had excluded the first appeal from its costs application on the basis that Mr Bracken was partially successful in that appeal. In the alternative, OFX sought costs from 3 April 2023, being the date that Mr Bracken filed the second appeal. The total costs sought by OFX are in the amount of $150,381.25. Costs are sought on the grounds in s. 400A of the FW Act and, in the alternative, under s. 611.

Grounds upon which costs are sought

The unreasonable acts alleged to have been engaged in by Mr Bracken in relation to the claim for costs under s. 400A of the FW Act are set out in the costs application as follows:

1.Rejecting an offer of 14 weeks compensation at conciliation conferences prior to 21 July 2021;
2.Rejecting an offer of 10.2075 weeks compensation made on 23 July 2021;
3.Rejecting an offer to discontinue with no order as to costs on 31 August 2021;
4.Falsely misrepresenting to Commissioner P Ryan that he was prepared to negotiate a settlement of the matter on 28 October 2022 and then subsequently refusing to engage in those discussions on 31 October 2022;
5.Lodging the second appeal and seeking to traverse the findings of fact and law made in the first decision in circumstances where the Full Bench had already rejected the grounds of appeal relevant to those findings; and
6.Ignoring the correspondence from OFX’s solicitors dated 14 April 2023 setting out issues with the second appeal and offering to resolve the matter on the basis that there be no order as to costs and the proceedings be discontinued.[4]

In addition, or in the alternative to costs sought under s. 400A, OFX further contended that costs should be awarded under s. 611 of FW Act on the basis that:

1.The substantive application and the second appeal were commenced without reasonable cause; and/or
2.It should have been reasonably apparent to Mr Bracken that the second appeal had no reasonable prospects of success.

Directions were issued requiring the parties to file evidentiary material and outlines of submissions in relation to the costs application. The Directions also specified that unless otherwise advised by the parties, we proposed to determine the costs application based on the written material filed, without an oral hearing. Correspondence was also sent to the parties from the Chambers of the presiding Member of the second Full Bench, noting that s. 402 of the FW Act requires that an application for costs under s. 611 in relation to a matter arising under Part 3-2 Unfair dismissal, or for costs under ss. 400A or 401, be made within 14 days after the Commission determines the matter or the matter is discontinued. It was also noted that OFX was seeking costs in relation to the first instance proceedings, including the hearing of the matter remitted by the first Full Bench following the first appeal.

The decision in the second appeal was released on 22 September 2023. The costs application was lodged by OFX on 25 September 2023. To the extent that costs were sought for the first instance proceedings, the application was not made within 14 days of the first and second decisions issued by the Commissioner. The parties were informed in correspondence from the Chambers of the presiding Member, that the Full Bench considered on a provisional basis that insofar as the costs application related to costs arising from the first instance proceedings, it may be liable to be dismissed on the basis that the application was not made within the time required in s. 402 of the FW Act.[5] OFX was requested to confirm whether it continued to press the costs application in relation to the first instance proceedings and, if so, to provide further submissions setting out the basis for its position and addressing the issues raised by the Full Bench in its correspondence.

OFX responded through its legal representative, advising that it did not press its application for costs of the first instance proceedings and sought costs only in respect of the second appeal. After the costs application was filed, Commissioner Bissett retired, and the second Full Bench was reconstituted for the purpose of dealing with the costs application.

Legislative provisions in relation to costs

Section 611

Section 611(2) of the FW Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are several provisions in the FW Act which operate as exceptions to this general rule and allow costs to be awarded in specified circumstances[6]. Section 611 provides that:

“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).”

The principles applicable to the power to award costs were set out by a Full Bench of the Commission in Hansen v Calvary Health Care Adelaide Limited[7]. In that case the Full Bench observed that the circumstances in which costs can be awarded are circumscribed and involve the exercise of a discretionary power where the Commission is satisfied that one or more of the circumstances in s. 611(2) has been established. The Full Bench went on to observe that if such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all, of the costs of another person in relation to the application, including on an indemnity basis, or decline to make any order at all.[8] The relevant principles concerning s. 611(2)(a) were set out by a Full Bench of the Commission in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[9] and summarised by a Full Bench in Gugiatti v SolarisCare Foundation Ltd[10] (Gugiatti) as follows:

·     An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
·     An application is not made without reasonable cause simply because the application did not succeed.
·     Whether an application is made without reasonable cause may be tested by asking whether, on the facts apparent to the applicant at the time the application was made, 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 characterise the application as having been made without reasonable cause.
·     In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from, and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
·     An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed.[11]

In relation to s. 611(2)(b), the Full Bench in Gugiatti referred to the relevant principles as summarised by a Full Bench in Baker v Salva Resources Pty Ltd[12] as follows:
·The term “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. (Footnotes omitted)

Section 400A

Section 400A of the Act 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 is a further exception to the general rule in s. 611. As part of the Unfair Dismissal regime in Part 3-2 of the Act, s. 400A empowers the Commission to make an order for costs against a party on a discretionary basis in circumstances where a party to a matter arising under Part 3-2 has caused another party to incur costs by an unreasonable act or omission. In Gugiatti, a Full Bench of the Commission observed that:

“[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.”[13]

The Full Bench in Gugiatti concluded that s. 400A applies to costs of appeals in relation to an application made under Part 3-2 Unfair dismissal, and that this interpretation is supported by the legislative history of s. 400A.[14] The Full Bench’s observations are also indicative that the cases dealing with the approach to applying previous legislative provisions dealing with costs continue to be relevant, and there are a number of Full Bench decisions in relation to s. 400A[15], which have treated as applicable earlier decisions considering costs applications under s. 170CJ (3),[16] and later, s. 658(3)[17] of the Workplace Relations Act 1996 (WR Act).

Section 170CJ(3) authorised the award of costs in circumstances essentially the same as the current s. 400A(1) – that a party caused costs to be incurred by the other party because of “an unreasonable act or omission in connection with the conduct of the proceeding”. Later, s. 658(3) of the WR Act was also in substantially the same terms. In Brazilian Butterfly Pty Ltd v Charalambous[18], an AIRC Full Bench discussed what constitutes a reasonable response to a settlement offer for the purposes of s. 170CJ(3), listing various factors the Commission may consider, as follows:

“A reasonable person, who is a party to proceedings pursuant to s.170CE, when confronted with an offer of settlement from the other party, will determine whether, and if so, how to respond to such an offer after considering all the circumstances of the case, including:
·the terms of the settlement offered in relation to the relief sought;
·the relative strengths of the parties’ cases (and thus their relative prospects of success) in relation to both ‘liability’ and the relief sought;
·any assessment of the merits in the certificate issued by the Commission pursuant to s.170CF(2);
·the likely length and cost of proceeding to a hearing if the matter does not settle; and
·any adverse consequences that will accrue to a party if they accept a settlement on particular terms rather than successfully prosecute or defend the primary application, as the case may be.”

We have applied these principles in the present case.

Evidence and submissions

OFX

Mr Berry, solicitor for OFX, provided a witness statement in support of the costs application. Much of Mr Berry’s statement refers to events at or around the period over which the first instance proceedings were conducted. Notwithstanding that this material is of limited relevance to the question of whether costs should be awarded in relation to the second appeal, for the purposes of the context in which Mr Bracken lodged that appeal, we set out the events recounted in Mr Berry’s statement.

According to Mr Berry, between 28 May and 21 July 2021 two conciliation conferences were held in relation to Mr Bracken’s unfair dismissal application. Mr Bracken initially only sought reinstatement, but then made an offer of 20 weeks’ pay and refused to accept a monetary offer of less than that amount. OFX made an offer of 14 weeks’ pay, but it was rejected by Mr Bracken.

On 23 July 2021, Mr Berry corresponded with Mr Bracken on behalf of OFX seeking to resolve the matter on the basis that OFX would pay Mr Bracken 10.2075 weeks’ pay, comprising 4 weeks’ pay in lieu of notice and 6.2075 weeks of accrued but unused long service leave. OFX also included in the offer that it would remove from its record that Mr Bracken was dismissed for serious misconduct.[19] The correspondence to Mr Bracken asserted that Mr Bracken had engaged in serious misconduct sufficient to justify dismissal as described in Regulation 1.07 of the Fair Work Regulations 2009, and advised that if the offer was rejected OFX reserved its right to rely on the correspondence to seek an order that Mr Bracken pay OFX costs of the proceedings pursuant to s. 400A of the FW Act.

On 3 August 2021, Mr Bracken responded to Mr Berry by email, disputing that he had engaged in misconduct and rejecting the offer of 10.2075 weeks’ pay, instead restating his previous offer of 20 weeks’ pay. Mr Bracken also asserted that a higher offer had previously been made by OFX at a member assisted conciliation conference conducted by Commissioner P Ryan and Mr Bracken reserved his right to seek an order for costs against OFX’s legal representative on the basis that it was engaging in “hard bargaining” that would disadvantage both Mr Bracken and OFX.

After Mr Bracken and OFX filed evidence and submissions in preparation for the first hearing, Mr Berry sent a letter to Mr Bracken on 31 August 2021 inviting him to discontinue proceedings by 4.00 pm on 3 September 2021 and stating that Mr Bracken’s evidence would not enable him to establish the necessary elements of s. 387 of the FW Act. Mr Bracken was again advised that should he fail to discontinue his unfair dismissal application, OFX would seek that he pay OFX costs of the proceedings pursuant to s. 400A(1) on the basis that his rejection of the offers was an unreasonable act.[20] Mr Bracken did not respond.

On 14 April 2022, Commissioner P Ryan handed down his first decision and dismissed Mr Bracken’s application and on 6 May 2022, Mr Bracken lodged his first appeal. On 9 June 2022, the first Full Bench issued a decision quashing the Commissioner’s first decision and remitted the application to Commissioner P Ryan to be redetermined on a limited basis. The matter was listed for hearing before Commissioner P Ryan on 28 October 2022. Mr Berry said that while he did not have a copy of the transcript, his recollection was that towards the conclusion of the hearing on 28 October 2022, Mr Bracken said to the Commissioner words to the following effect:

“I thought this matter would have proceeded in the normal way where there would be an opportunity for settlement discussions. I would be interested in resolving the matter where I discontinued the case but on condition the respondent did not seek costs from me.”

As a result of Mr Bracken’s comment, Mr Berry stated that the Commissioner indicated that he intended to delay handing down the decision until the parties had exhausted settlement discussions. Mr Berry stated that following the rehearing on 28 October 2022, he discussed a settlement proposal with OFX and was instructed to consider a settlement on the basis proposed by Mr Bracken on 28 October 2022. Mr Berry said he then instructed Mr Stewart to contact Mr Bracken to explore the settlement proposal raised by Mr Bracken. Mr Berry said he was advised that Mr Stewart had contacted Mr Bracken by telephone on 31 October 2022 during which Mr Bracken indicated he was not interested in resolving the matter “on the basis outlined on 28 October 202[2]” or at all because he was “going to win”.

On 5 November 2022, Mr Berry advised the Commissioner’s chambers via email that the settlement discussions had been unsuccessful. On 10 March 2023 Commissioner P Ryan handed down the second decision in which he again dismissed Mr Bracken’s application. On 3 April 2023, OFX was served with the second notice of an appeal instituted by Mr Bracken. Mr Berry stated that he then sent a letter to Mr Bracken on 14 April 2023, setting out the history of the matter, noting the following matters:

“5.1. in the Full Bench decision handed down on 12 September 2022, the Full Bench accepted the findings of fact of Commissioner Ryan in the first decision save for example 6;

5.2. the second decision of Commissioner Ryan, adopting the factual findings already made and in accordance with the directions of the Full Bench, found that you had not been unfairly dismissed;
5.3. there is no basis upon which you can seek to appeal the first decision as you are out of time and the Full Bench has accepted those factual findings in its decision on 12 September 2022;
5.4. in order to secure permission to appeal from the second decision, you are bound by the factual findings and your grounds of appeal do not identify ‘significant errors’ such that they can be disturbed. In any event, seeking to disturb the factual findings, already confirmed by the Full Bench in its decision of 12 September 2022, would arguably require an appeal to the Federal Court of Australia. This therefore means that your appeal can only be limited to an error by Commissioner Ryan in his legal conclusions in the second decision only. Taking into account the findings of fact, it was open to Commissioner Ryan to draw the legal conclusion that the dismissal was not unfair and there has not been an error;
5.5. we therefore do not believe that you have any reasonable prospects of success and that the current appeal is vexatious, frivolous and without proper justification…”[21]

The letter of 14 April 2023 also included an offer that if Mr Bracken discontinued the second appeal, OFX would not seek costs against Mr Bracken, and if the offer was rejected, the correspondence would be relied upon in seeking an order that Mr Bracken pay OFX’s costs of the second appeal. The offer was left open until 4.00pm on 28 April 2023. Mr Bracken did not respond to this letter. Mr Berry said that OFX has incurred considerable costs in defending the matter which exceed $150,000. Mr Berry extracted a report from his firm’s computer system, which identified every entry of time for work performed in the matter throughout the entire course of the matter but excluded items that had been written off by agreement with OFX. A copy of the report was appended to Mr Berry’s statement.

It was submitted for OFX that Commissioner P Ryan made a finding (which was accepted and cited with approval by the second Full Bench) that Mr Bracken “has remained steadfast in his view that he has not breached the Respondent’s policies and procedures despite clear contrary evidence” and Mr Bracken’s “lack of any acknowledgement of misconduct, remorse or contrition weighs against any finding of unfairness’[22]. According to OFX, this attitude resulted in the unreasonable acts or omissions upon which the application for costs is based.

OFX also contends that Mr Bracken’s unreasonable acts or omissions have resulted in the matter continuing for an unreasonably long period of time which directly caused OFX to incur significant costs defending the first instance proceedings and the second appeal. In the light of the findings of Commissioner P Ryan and the Full Bench as to Mr Bracken’s attitude towards the matter generally, and his inability to accept responsibility for his actions, the conduct outlined must be held to be unreasonable within the meaning of s. 400A(1).

In relation to s. 611 of the FW Act, OFX submitted that based on the findings of Commissioner P Ryan and the Full Bench, the original unfair dismissal application was without reasonable cause (save for the costs of the first appeal) for the reasons outlined above. The unfair dismissal application was said to be devoid of merit from its inception. However, if this submission is not accepted, OFX said, in the alternative, costs should be awarded from the filing of the second appeal, pursuant to s. 611(2)(a) of the Act.

After the rehearing with a narrow remittal and confirmation that the findings of fact remained undisturbed by the Full Bench (save for Example 6), the filing of the second appeal seeking to re-argue the first decision in addition to the second decision, both in fact and law, was manifestly groundless, untenable, and incapable of argument. It was clear that if the Full Bench affirmed the findings of fact made at first instance, seeking to re-argue them again before a second Full Bench was entirely devoid of merit and without reasonable cause. OFX therefore submitted that the substantive application and second appeal were commenced without reasonable cause within the meaning of s. 611(2)(a) and a costs order should be made in its favour.

OFX also submitted that it is entitled to costs pursuant to s. 611(2)(b) of the FW Act on the basis there were “no reasonable prospects”. In this regard, OFX submitted that the test is lower than that for “without reasonable cause” in s. 611(2)(a)[23]. OFX said that after considering the findings in the first appeal decision together with the second decision of Commissioner P Ryan, it was evident to any reasonable person that seeking to run the same arguments again in the second appeal had no reasonable prospects of success. Although Mr Bracken had no legal representation, it could not be said that he was unaware of these issues given that he was sufficiently skilled and cognisant of the matters to represent himself during the entire proceedings.

It was also submitted that Mr Bracken was advised on several occasions in correspondence as to the significant issues he faced in pursuing the matter including the difficulties with the second appeal set out in detailed correspondence dated 14 April 2023, which Mr Bracken either chose to ignore or rejected. On any view, at the very least from 14 April 2023, Mr Bracken was aware that his appeal had no reasonable prospects of success. Asking the Commission to decide the same issues for a second time was “ludicrous” and it should also be noted that the Full Bench, in the second appeal decision, cited with approval in Grabovsky v United Protestant Association NSW Ltd[24] where a Full Bench of the Commission observed that:

“[26] Cases where an applicant seeks to rerun in the Commission an application, the substance of which has already been heard and determined, fall for consideration under s 587, either on the Commission’s own motion or on application by a party…The finite resources of the Commonwealth are not to be unreasonably diverted by parties who cannot accept that their claims have been unsuccessful and who seek to resubmit them to the Commission. It is unfair for their opponents to be entangled in repetitive litigation.”[25]

In that respect, OFX submitted that at [32] of the second appeal decision, the Full Bench was inferring that the second appeal fell within the scope of s. 587(1)(c) and therefore had no reasonable prospects of success. In response to Mr Bracken’s statement that he would have accepted an offer of 17 weeks in July 2021 if the offer was made by OFX, and the reason he pursued the proceedings was because of the unreasonable act of OFX in making an offer of no compensation, OFX submitted that these are “nonsensical” arguments and that it was clear that Mr Bracken would not have accepted the offer of 17 weeks in July 2021 because on 3 August 2021, he reiterated in correspondence that he was seeking (again) 20 weeks’ pay to settle his application.

Even if the proposition that Mr Bracken would have accepted the offer of 17 weeks, is accepted, no such offer was made by OFX and Mr Bracken was ultimately awarded no compensation by the Commissioner. It cannot be said that Mr Bracken did not engage in an unreasonable act simply because OFX failed to make an offer of 17 weeks’ pay. There was nothing preventing Mr Bracken from making that offer to OFX or agreeing to discontinue the proceedings with no order as to costs. Instead, Mr Bracken chose to restate the offer of 20 weeks’ pay which must be held to be an unreasonable act.

Further, OFX submitted that the offer of no compensation made on numerous occasions was indeed the appropriate offer as it is reflected in the ultimate result that no compensation was awarded. In addition, OFX stated that this does not detract from the fact that Mr Bracken engaged in a number of unreasonable acts of his own volition in continuing to pursue the proceedings in circumstances where he failed at first instance (twice), almost entirely failed in the first appeal and failed entirely in the second appeal. OFX said that Mr Bracken’s argument also ignores his own conduct during the rehearing on 28 October 2022 where he indicated a willingness in open court to resolve the matter[26] but rejected the proposal out of hand when raised by OFX’s Counsel on 31 October 2022.

As to the “genuine belief” argument proffered in Mr Bracken’s submissions, OFX submitted that the test to be applied is an objective test of reasonableness based on the facts known or which should have reasonably been known at the time of the alleged act or omission. Costs will be awarded from the point the person recognised or should have recognised that their case was frivolous, untenable, groundless or faulty.[27] OFX submitted that Mr Bracken’s reliance on his genuine belief from a subjective point of view has to be rejected. It is an objective test, and objectively, a finding of an unreasonable act could comfortably be made from 23 July 2021, 31 August 2021, 3 April 2023 and/or 14 April 2023. The decisions of the Full Bench on 9 June 2022 and the Commissioner on 10 March 2023 were also said to have made clear that Mr Bracken had failed (save for Example 6) and he must have read those decisions. Continuing to pursue the matter, at the very least from 3 April 2023 (the filing of the second appeal), must be found to be an unreasonable act.

In relation to Mr Bracken’s submissions on s. 611(2)(b), OFX said his reliance upon an alleged genuinely held belief is insufficient to establish that there were no reasonable prospects of success. The Commission is required by s. 611(2)(b) to objectively view the prospects of success. On an objective view, Mr Bracken’s original application had no reasonable prospects of success and, certainly, the second appeal had no reasonable prospects of success. OFX also submitted that Mr Bracken’s argument in relation to reg. 1.07 was not relevant to the issue of whether there was a valid reason for dismissal. In relation to Mr Bracken’s submission that his awareness of the prospects of success should be considered in light of the fact that he was self-represented, OFX submitted that subjective awareness (or lack thereof) is also irrelevant because it is an objective test and Mr Bracken must fail when the test is applied.

Initially, OFX submitted that it is just and fair that it should be entitled to a costs order from 3 August 2021, but conceded that such an order would not include the costs of the first appeal as Mr Bracken was partially successful with respect to one ground of appeal which was remitted for re-hearing. As we have noted above, OFX subsequently advised that the claim for costs in relation to matters other than the second appeal, would not be pressed.

Mr Bracken

In his witness statement in the costs matter, Mr Bracken said that he believed that this dismissal was unfair, and he sought a remedy in the Commission on 28 May 2021. Mr Bracken attended two unsuccessful conciliations before the Commission. The second conciliation in July 2021 was conducted by Commissioner P Ryan and OFX was represented by Ms Nowland (OFX Head of People and Culture). OFX made an offer of 14 weeks’ pay during the conciliation conducted by Commissioner P Ryan, which was countered by his offer of 20 weeks. Mr Bracken said that the Commissioner suggested 17 weeks as a compromise. Mr Bracken said that he would have accepted that amount, but OFX said it only had approval for 14 weeks’ pay and the conciliation ended without a resolution.

In a case management and directions hearing before the Commissioner, Mr Bracken recalled being asked by the Commissioner as to how the matter should proceed and that he told the Commissioner that he wanted a conference but could not recall whether his opinion was considered. Mr Bracken said he strongly objected to OFX being represented by external legal representatives because OFX has an in-house legal team. Mr Bracken agreed that he received a letter from Mr Berry making an offer of 10.2 weeks’ wages to settle the matter on a without prejudice basis, which in Mr Bracken’s view misrepresented key facts and seemed to indicate a preference for a hearing. On 3 August 2021, Mr Bracken responded to the letter and rejected the reduced offer.

On 31 August 2021, Mr Bracken received another letter from Mr Berry which “essentially demanded that I cease proceedings or face costs”. Mr Bracken said this approach appeared to go beyond tough negotiation and felt intimidating. Given the initial hearing was listed for multiple days with OFX having multiple witnesses and legal counsel, Mr Bracken questioned why Mr Berry did not advise OFX to settle before the hearing. Mr Bracken contended that whether Mr Berry failed to provide that advice, or it was ignored, it was OFX that discontinued settlement negotiations, leading to substantial costs being incurred.

After his unfair dismissal application was dismissed by Commissioner Ryan on 14 April 2022, Mr Bracken believed there were factual errors based on the evidence, and OFX did not make a costs application “by the deadline of 28 April 2021”. In the first appeal, the Full Bench granted permission to appeal and quashed the Commissioner’s decision due to a significant error and remitted the case for redetermination. In the redetermination hearing before the Commissioner on 28 October 2022, Mr Bracken suggested to the Commissioner a willingness to discuss settlement but noted that the most recent offer made by OFX had been that he would not receive any monetary amount from OFX. After his application was dismissed by the Commissioner on 10 March 2023, Mr Bracken continued to believe that his case had merit and the Commissioner’s decision was a miscarriage of justice.

In submissions, Mr Bracken advanced several arguments in opposition to the making of a costs order, which can be summarised as follows:

The Commission must ensure, in deciding on the procedures and remedies in relation to unfair dismissal under Part 3-2, that a “fair go all round” is accorded to both the employer and employee concerned.
In relation to the second appeal against the Commissioner’s decision it was arguable that the Full Bench may find that the Commissioner made a jurisdictional error in his consideration of whether there was a valid reason for the dismissal, by failing to consider all the elements (which Mr Bracken referred to as “preconditions”) necessary to establish serious misconduct in accordance with the definition contained in reg 1.07 of the Fair Work Regulations 2009, with the result that his summary dismissal was harsh.
Ground 6 of his second appeal – that the Commissioner “erroneously failed to reconsider the multitude of other matters given that the seriousness of the valid reason was reduced, by way of Example 6 struck out” – has the “possibility (albeit small) of a decision in [his] favour” and it cannot be said that the appeal had no reasonable prospects of success.
The second appeal was not commenced vexatiously as it was not brought to harass or annoy OFX but was made in good faith with the expectation of a possibility that the appeal would be upheld.
Mr Bracken’s actions and decisions were driven by a genuine belief in the merit of his case and the pursuit of justice.
During the proceedings, Mr Bracken actively engaged in the conciliation process, and it was legitimate for him to seek reinstatement. The subsequent negotiation for compensation and rejection of offers were based on a genuine desire to find a fair resolution to the dispute, and the rejection of an initial settlement offer does not inherently constitute an unreasonable act.
Section 611(2)(a) of the Act requires that an application must be “vexatious or without
reasonable cause” for costs to be awarded. In this regard, he genuinely believed he was treated unfairly, and his legal actions were rooted in this belief. Mr Bracken said his actions were, at least subjectively, based on reasonable cause and individuals should be allowed to pursue legal actions based on their sincerely held beliefs.
With respect to s. 611(2)(b), Mr Bracken said that he continued with his appeals based on his understanding of the facts and belief in the merits of his case. Further, the bar for “no reasonable prospects” is lower, especially for self-represented litigants.[28]
As a self-represented litigant, Mr Bracken may not possess the same legal expertise as trained lawyers and a more lenient approach should be taken regarding his awareness of lack of prospects for the second appeal.

Consideration

Costs under s. 400A

As we have stated, OFX did not seek costs in relation to the first appeal, and later confirmed that it did not press the application for costs in relation to the first instance proceedings. Accordingly, we deal only with the application for costs in relation to the second appeal. It is convenient to first consider OFX’s application for costs of the second appeal under s. 400A of the FW Act. The first three unreasonable acts relied on by OFX relate to Mr Bracken rejecting offers of settlement on 21 July, 23 July and 31 August 2021. We do not accept that any of these acts were unreasonable acts or omissions in connection with the conduct or continuation of the second appeal. The three offers were made prior to the first hearing before the Commissioner and cannot be treated as unreasonable acts in connection with the second appeal.

In relation to the fourth ground advanced by OFX in support of its costs application, we do not accept that Mr Bracken engaged in an unreasonable act at the conclusion of the second hearing on 28 October 2022, by indicating to the Commissioner that he was prepared to negotiate a settlement and then refusing to do so. The Commission’s files indicate that Commissioner P Ryan ordered a transcript for the hearing on 28 October 2022 but did not provide a copy to the parties. Accordingly, we accept that Mr Berry did not have access to a transcript of the hearing on 28 October 2022 when he made his statement in support of the costs application. We note however that the statement is incorrect and that Mr Berry could have requested a copy of the audio recording of the hearing on 28 October 2022 before making that statement, and did not do so. The transcript includes an exchange at the conclusion of that hearing, between Mr Bracken, Mr Stewart (Counsel for OFX) and the Commissioner, in relation to the possibility of the parties holding discussions about resolving the matter.

A confidentiality order was issued by the Commissioner in relation to the proceedings on that date and it suffices to say that Mr Bracken was querying whether a proposal involving him withdrawing his application and the Respondent undertaking not to pursue costs, was a settlement offer at all, and that Counsel for OFX believed that it was too late for a settlement to be agreed in any event. This exchange cannot be characterised as Mr Bracken indicating a willingness in open court to resolve the matter and then rejecting a subsequent proposal from OFX. Nor does the exchange involve Mr Bracken making a false representation to the Commissioner about a willingness to settle the matter. The context in which this exchange occurred was that all parties to it, including the Commissioner, were aware that there had been an offer from Mr Bracken to settle his application for 20 weeks’ wages, a counteroffer of 14 weeks’ wages made by OFX and a suggestion made by the Commissioner of a compromise by both parties agreeing to settle the matter for 17 weeks’ wages. It is unsurprising that Mr Bracken subsequently refused an offer to settle on the basis that he would withdraw his application in return for an undertaking by OFX not to pursue its costs. For Mr Bracken to reject that offer was not an unreasonable act, given that at the relevant time, Mr Bracken had succeeded with the first appeal and the Commissioner had reserved his decision in relation to the matters remitted by the Full Bench.

Neither can it be said that lodging the second appeal was an unreasonable act. As we have outlined in our decision in the second appeal, the Full Bench in the first appeal concluded, based on a concession by Counsel for OFX – that one of the policy breaches found by the Commissioner to have occurred (Example 6) was not in fact a policy breach and that absent the erroneous finding by the Commissioner in this regard, he might not have found that there was a valid reason for Mr Bracken’s dismissal. This error was found by the first Full Bench to be significant. The basis on which the matter was remitted to the Commissioner required that he reconsider whether the other findings constituted a valid conduct-related reason for Mr Bracken’s dismissal, in the absence of the erroneous finding. Mr Bracken lodging a second appeal, and seeking to argue that the Commissioner erred by concluding in his second decision that the other breaches of policy and procedure identified in the first decision constituted a valid reason for dismissal, was not unreasonable.

That Mr Bracken sought to conduct the second appeal by addressing the other findings made by the Commissioner in his first decision is also not unreasonable. The first Full Bench identified that the Commissioner had placed significant weight on the erroneous finding and noted his view that the erroneous finding alone was sufficient to constitute a valid reason for dismissal, and that the other findings considered cumulatively with the erroneous finding, also constituted a valid reason for dismissal. It was therefore open for Mr Bracken to contend in the second appeal that absent the finding in relation to Example 6, the other matters established on the evidence did not, on balance, constitute a valid reason for dismissal. While we accept that Mr Bracken sought to relitigate the other findings in the second appeal, we also note that he was unrepresented, and the approach he took in arguing his case in the second appeal can be attributed to the nature of the error identified by the first Full Bench more so than unreasonableness on the part of Mr Bracken.

For Mr Bracken to reject or ignore correspondence from the legal representative for OFX setting out issues with his appeal and offering to resolve the matter on the basis that there be no order as to costs and the proceedings be discontinued, was not an unreasonable act, in the context and circumstances of this case, considered on an objective basis. Mr Bracken had succeeded with the first appeal and the second appeal was at least arguable. The fact that Mr Bracken did not advance his appeal on this arguable ground of the cumulative effect of Example 6, with the degree of specificity that might have been expected if he was legally represented, is not a basis to award costs against him. Finally, the length of time over which the matter has been on foot, cannot solely be attributed to Mr Bracken given that Mr Bracken’s first appeal succeeded, and he was entitled to a rehearing, and that lodging a second appeal was not an unreasonable act.

Costs under s. 611

We do not accept that, for the purposes of s. 611(2)(a) of the FW Act, the second appeal was lodged vexatiously. There is no evidence to suggest that Mr Bracken lodged the appeal for an ulterior purpose to harass or embarrass OFX or to gain a collateral advantage. Mr Bracken genuinely believed that he had been unfairly dismissed and pursued a remedy. Nor do we accept that the appeal was advanced without reasonable cause. The assertion by OFX that Mr Bracken almost entirely failed in the first appeal is not correct. While the first Full Bench upheld the appeal on only one ground, it found a significant error in the Commissioner’s first decision with respect to a finding of fact. That error was of such significance that the Full Bench was satisfied that it had the potential to change the outcome of the matter. While the Full Bench did not disturb the other findings of fact made by the Commissioner, the effect of the remittal of the matter to be redetermined, was to require the Commissioner to weigh the other factual findings and to decide whether those facts, individually or collectively, constituted a valid conduct-related reason for Mr Bracken’s dismissal.

It cannot be said that the second appeal was lodged without reasonable cause. For reasons set out above, it was at least arguable that absent the erroneous finding and considering the weight that had been placed on that finding by the Commissioner, his conclusion that the other examples of conduct constituted a valid reason for dismissal, was erroneous. It is true that the decision as to the weight to be given to the other examples of conduct is discretionary and that Mr Bracken would have been required to establish an error on the part of the Commissioner of the kind described in House v The King[29] to mount a successful appeal. While this would undoubtedly have been a difficult task for Mr Bracken, it cannot be said that on the facts apparent to him at the time he lodged the appeal, there was no substantial prospect of success. Notwithstanding the difficulties with the pleadings set out in the appeal, the exercise of redetermining Mr Bracken’s application did require that the Commissioner revisit the findings he had made in relation to Mr Bracken’s conduct, not for the purpose of deciding whether they were correct, but for the purpose of weighing those findings, without the cumulative effect of Example 6.

As the Commissioner observed in his second decision, Mr Bracken’s further submissions as to how the matter should be redetermined were intertwined with submissions seeking to challenge or explain away the Commissioner’s findings in the first decision which had not been disturbed by the Full Bench in the first appeal. The Commissioner also observed that Mr Bracken submitted that “the punishment did not fit the crime” and that misconduct justifying summary dismissal must involve more than mere negligence, error of judgment or simple mistake. It was open for Mr Bracken to argue that absent the finding in relation to Example 6, other conduct did not establish a valid reason for dismissal. These were arguments that were open to Mr Bracken in the redetermination of his application and in the second appeal. While these arguments were difficult to establish, there was a not insubstantial prospect of the appeal achieving some success. Nor do we accept that the case advanced by Mr Bracken in the second appeal was so obviously untenable that it could not possibly succeed or was manifestly groundless.

It follows that we reject the contention that Mr Bracken was aware from 14 April 2023 that the second appeal had no reasonable prospects of success. The significance of that date is that correspondence was sent to Mr Bracken outlining the views of lawyers for OFX about the prospects for his second appeal and reiterating the offer that the appeal be withdrawn and that there would be no order for costs. Mr Bracken had an arguable case in the second appeal and his failure to accept the views of the Respondent about the weakness of his case is not a sufficient basis for a conclusion that it should have been reasonably apparent to Mr Bracken that the second appeal had no reasonable prospect of success.

The reference made by the second Full Bench in its decision to the earlier decision of a Full Bench in Grabovsky v United Protestant Association NSW Ltd[30] does not support an inference that Mr Bracken’s second appeal was without reasonable cause or had no reasonable prospects of success. The reference to that case was in the context of this Full Bench explaining the basis for its refusal to consider arguments advanced by Mr Bracken which sought to reagitate matters that had been determined by the first Full Bench, rather than to indicate that the second appeal fell within the scope of s. 587(c). In contrast to the circumstances in Grabovsky, the present case involved a matter that was not determined by the Full Bench in the first appeal and was instead remitted to the Commissioner, and then came to this Full Bench in the second appeal. The second Full Bench went on to acknowledge that Mr Bracken was unrepresented and stated that it would consider the matters raised in the decision of the first Full Bench only insofar as they directly impinged on the matters subject of the second appeal. As we have noted, it was not unreasonable for Mr Bracken to refer to the findings of the Commissioner that were not disturbed by the first Full Bench, and to contend that those findings, considered without the effect of the erroneous finding, did not constitute a valid reason for his dismissal based on weight or proportionality.

In relation to other issues raised by OFX in its costs application, we do not consider that Mr Bracken’s claim that he would have accepted 17 weeks’ pay to settle the application is nonsensical. Mr Bracken’s uncontested evidence in the costs application is that the Commissioner conducted a conciliation conference in which Mr Bracken indicated that he would settle for an amount of 20 weeks’ wages, OFX offered 14 weeks’ wages and the Commissioner suggested a compromise of 17 weeks’ wages. Mr Bracken cannot be criticised for maintaining his position in relation to settlement when the Commissioner suggested an amount which was rejected by both parties. Finally, we note the criticism made by OFX’s legal representative about the reference in Mr Bracken’s material to regulation 1.07 in relation to serious misconduct. We agree with the submission advanced by OFX that regulation 1.07 is irrelevant in the context of establishing a valid reason for dismissal for the purposes of s. 387(a). However, we also note that the source of the reference to regulation 1.07 appears to be correspondence under the signature of Mr Berry, the legal representative for OFX, sent to Mr Bracken, on 23 July 2021, which contains the following statement at paragraph 3.7:

“…there is no dispute that your conduct amounts to serious misconduct sufficient to justify dismissal (see regulation 1.07 of the Fair Work Regulations 2009)…”

Mr Bracken did not have legal representation in the proceedings, and it is not unreasonable for Mr Bracken to repeat in his submissions, a reference to regulation 1.07, which was initially raised by OFX’s legal representative.

Conclusion

We are not satisfied that Mr Bracken’s conduct in connection with the second appeal is such that any of the matters in s. 400A or s. 611(2) apply to trigger the discretion of the Commission to award costs to OFX under either of those provisions. We have decided to dismiss the application for costs in C2023/1801 and an Order to that effect will issue with this Decision.

VICE PRESIDENT

Final written submissions:

OFX, 19 October 2023.
J. Bracken, 18 October 2023.

[1] [2022] FWC 879.

[2] [2023] FWC 590.

[3] Bracken v OFX (OzForex Limited)[2023] FWCFB 174.

[4] Form F6 Application – Grounds for application for costs; OFX outline of submissions dated 9 October 2023 at [18].

[5] Cremona v Lane (2011) 213 IR 151; Toma Workforce Recruitment and Labour Services Pty Ltd T/A Workforce International Group [2023] FWCFB 63; Elite Essential Trades Pty Ltd T/A E-LITE LED SOLUTIONS v Gauntlett-Gilbert[2018] FWCFB 6035

[6] Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 at [21].

[7] [2016] FWCFB 8162.

[8] Ibid.

[9] [2014] FWCFB 810.

[10] [2016] FWCFB 2478.

[11] Ibid at [22].

[12] [2011] FWAFB 4014.

[13] Op. cit. at [43].

[14] [2016] FWCFB 2478 at [32]-[33].

[15] See Baxter Healthcare Pty Ltd v Portelli [2017] FWCFB 3891; Gugiatti v SolarisCare Foundation Ltd [2016] FWCFB 2478; Hansen v Calvary Health Care Adelaide Ltd [2016] FWCFB 8162; Roy Morgan Research v Baker[2014] FWCFB 1175.

[16] Brazilian Butterfly Pty Ltd v Charalambous PR9868915 [2006] AIRC 521 (25 August 2006); Stagno v Frews Wholesale Meats (1998) 84 IR 270.

[17] Goffet v Recruitment National Pty Ltd [2009] AIRCFB 626.

[18] PR968915 (25 August 2006).

[19] Witness Statement of Simon Berry at SB1 at p.2.

[20] Ibid at p.12.

[21] Ibid at p.15.

[22] [2023] FWCFB 174 at [61].

[23] Oz v Amity College Australia Limited[2021] FWC 5041.

[24] [2019] FWCFB 1964.

[25] At [26] cited in the second appeal at [31].

[26] Transcript of Hearing on 28 October 2023 at PN365.

[27] Roche v Trustees of the Roman Catholic Church for the Diocese of Wagga Wagga[2020] FWC 326.

[28] Oz v Amity College Australia Limited [2021] FWC 5041.

[29] [1936] 55 CLR 499.

[30] [2019] FWCFB 1964.

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Citations

John Patrick Bracken v OzForex Limited T/A OFX [2024] FWCFB 356

Cases Citing This Decision

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Cases Cited

13

Statutory Material Cited

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John Patrick Bracken v OFX (OzForex Limited) [2023] FWCFB 174

Loi Toma v Workforce Recruitment and Labour Services Pty Ltd T/A Workforce International Group [2023] FWCFB 63

Elite Essential Trades Pty Ltd T/A E-LITE Led SOLUTIONS v Alan Gauntlett-Gilbert [2018] FWCFB 6035