Kavassilas v Migration Training Australia Pty Ltd (No.2)
[2012] FMCA 208
•7 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KAVASSILAS v MIGRATION TRAINING AUSTRALIA PTY LTD (No.2) | [2012] FMCA 208 |
| INDUSTRIAL LAW – Unlawful termination – dismissal because of temporary absence for illness – penalty of $20,000 imposed – baseless grounds of termination maintained and then abandoned in course of hearing – partial costs award against respondent employer. |
| Fair Work Act 2009 (Cth), ss.352, 361, 545(2)(b), 546(1), 546(3), 547, 570, 570(2), 570(2)(b), 570(2)(c) Federal Magistrates Court Rules 2001 (Cth), r. 21.02(2)(c), Sch.1 |
| Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560, [2008] FCAFC 8 Kavassilas v Migration Training Australia Pty Ltd [2012] FMCA 22 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357, [2008] FCAFC 170 Woodside Burrup Pty Ltd v Construction, Forestry, Mining & Energy Union [2011] FCA 949 |
| Applicant: | DAPHNE KAVASSILAS |
| Respondent: | MIGRATION TRAINING AUSTRALIA PTY LTD ACN 093 932 337 |
| File Number: | SYG 2419 of 2010 |
| Judgment of: | Smith FM |
| Hearing and Orders date: | 7 March 2012 |
| Delivered at: | Sydney |
| Reasons published on: | 29 March 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr T Saunders |
| Solicitors for the Applicant: | Eakin McCaffery Cox |
| Counsel for the Respondent: | Mr A Britt |
| Solicitors for the Respondent: | Christopher Levingston & Associates |
ORDERS
A penalty of $20,000 is imposed on the respondent, Migration Training Australia Pty Ltd under s.546(1) of the Fair Work Act 2009 (Cth) (‘the Act’), for its contravention of s.352 of the Act by dismissing the applicant on 11 August 2010 because she was temporarily absent from work because of illness of a kind prescribed by the regulations.
Pursuant to s.546(3) of the Act, the penalty must be paid to the applicant.
The respondent must pay to the applicant compensation awarded under s.545(2)(b) of the Act in the amount of $33,706.21, plus interest under s.547 on that award in the amount of $4,605.74.
Pursuant to s.570(2)(b) of the Act, the respondent must pay one half of the costs of the applicant in the proceedings, as agreed or taxed by a Registrar under the Federal Court Rules.
Execution under orders 2 and 3 of these orders is stayed until 28 March 2012.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2419 of 2010
| DAPHNE KAVASSILAS |
Applicant
And
| MIGRATION TRAINING AUSTRALIA PTY LTD ACN 093 932 337 |
Respondent
REASONS FOR JUDGMENT
On 27 January 2012 I delivered my reasons for finding that Migration Training Australia Pty Ltd (‘MTA’) contravened s.352 of the Fair Work Act 2009 (Cth) (‘the Act’) by dismissing Ms Kavassilas from her employment as Group General Manager of that company and two other related companies on 11 August 2010 (see Kavassilas v Migration Training Australia Pty Ltd [2012] FMCA 22). I arrived at that conclusion because the evidence did not satisfy me that the termination of her employment did not occur because she was temporarily absent from work for an illness for which she was claiming sick leave and which was of a kind prescribed by the regulations.
Under s.361 of the Act, once objective circumstances satisfying s.352 were established, as I found they were, an evidentiary onus was placed on MTA to prove that its reasons for dismissing Ms Kavassilas did not include the unlawful reason proscribed by s.352. As I explained, I was not so satisfied on the evidence presented by MTA. Indeed, I made findings suggesting that her absence on sick leave did provide a reason for taking that action at that time, although I was unable to arrive at confident findings as to the other significant operative reasons of MTA’s two directors, Mr Levingston and Mrs Ross.
I introduced my findings as to these circumstances at [6] and explained them at [46]‑[50] and [82]‑[84], as follows:
6.I have concluded that the objectively determined circumstances of Ms Kavassilas’ absence are sufficient to raise a presumption of a reason made unlawful by s.352. Endeavouring to find the true reasons for the termination of her employment on 11 August 2010, I have found most of the two directors’ evidence to be unsatisfactory and unpersuasive. I find that at relevant times they were aware that Ms Kavassilas had taken reasonable steps to inform the directors of MTA of her absence on sick leave. I am unable to arrive at a confident conclusion on the balance of probabilities that Ms Kavassilas’ absence because of illness provided a true reason for her dismissal, although it is clear to me that, at least, it influenced the timing and manner of the directors’ decision to terminate her employment. A finding of MTA’s liability for contravention of s.352 is therefore to be established by application of the presumption raised by s.361. It is agreed that, having made that finding, I should appoint a further hearing in relation to quantum of penalty and costs issues.
…
46.I have above noted my concern about the general reliability of Mr Levingston’s evidence. Considering the evidence of both of these witnesses given on 15 November 2011, I am left with an impression that both witnesses were tailoring their evidence to present an untrue rationalisation of Ms Kavassilas’ dismissal, which attempted to avoid the, by then apparent, lack of substance in the previously presented justifications.
47.Mrs Ross’ evidence not only suffered from inconsistency with Mr Levingston’s evidence presented at the first hearing, but also generally was given in a manner and content which left me with a firm impression of embellishment and tailoring, in an effort to exclude the fact of Ms Kavassilas’ absence as a reason for her dismissal on 11 August 2010, and to accommodate the evidence which emerged at the first hearing showing that both directors were aware that Ms Kavassilas had explained her absence to them. The central premise of Mrs Ross’ oral evidence as to the timing of the directors’ decision is unsupported and appears inconsistent with contemporaneous documentation. Mrs Ross’ affidavit showed generally a highly partisan response to Ms Kavassilas’ case, and in at least one respect was shown in cross‑examination to have been sworn without careful attention to the truth of allegations it made against Ms Kavassilas. Assessing her evidence generally, I consider that she was an unreliable witness in relation to all matters which are otherwise unverifiable or uncertain.
48.On my above findings, there is no reliable and clear evidence as to the discussions and considerations which motivated the two directors of MTA to execute and deliver the letter which summarily terminated Ms Kavassilas’ employment on 11 August 2010. In view of the lack of substance in all of the expressed reasons, I have concluded that the directors have been concerned only to give a veneer of rational justification to their decision. The termination letter was a cloak for unexpressed true reasons which have never been adequately articulated by them. Their evidence to the court presented a succession of reasons which appeared increasingly threadbare when exposed to cross‑examination.
49.In this situation, and considering all the evidence in the broad context of Ms Kavassilas’ employment, I am inclined to conclude that the true reasons for deciding to terminate her employment were impulsive and irrational, and that the decision itself was prompted by her absence. The most likely hypothesis in my mind, is that both directors had doubts whether they wanted to continue to engage her services and whether Ms Kavassilas herself wished to continue in their employment. They were then swayed by irrational and unsubstantiated concerns, triggered by her absence from work, that she might resign and make claims on MTA for breach of contract, and by an impulsive and ill‑considered desire to pre‑empt her resignation by summarily dismissing her without any delay. It is possible, but highly speculative, that the fact that she had foreshadowed, but not yet produced, a medical certificate, may have played a conscious or unconscious role in prompting the decision, including an incorrect view of the Fair Work Act (as explained below) that Ms Kavassilas could lawfully be terminated while absent on sick leave at any time until a medical certificate was actually submitted. For whatever reason, her absence appears likely to have contributed to the perceived urgency with which they formed and gave effect to their desire to terminate her services.
50.Clearly, their decision was poorly thought through, and the procedures which were followed were devoid of objective reasonableness and fairness to Ms Kavassilas. The purported justifications for summary dismissal presented to Ms Kavassilas in the termination letter, and pleaded in defence in the present proceedings, were always without proper substance. Exactly what caused Mrs Ross and Mr Levingston separately and in discussion to agree that they would dispense with Ms Kavassilas’ services immediately, remains obscure to me. However, the above elements in the circumstances of the termination suggest that the fact of Ms Kavassilas’ temporary absence from the office was itself the sole immediate reason for the decision which was taken, even where there were other operative reasons for dismissing her. I am therefore inclined to accept Mr Levingston’s initial evidence that the absence itself was an ‘important consideration’ in the minds and discussions of both directors, which explains the adverse action taken by MTA on 11 August 2010. I am certainly not persuaded, on the balance of probabilities, that it was not.
…
82.Guided by these principles, and applying my factual findings explained above, I am not satisfied that MTA has overcome, on the balance of probabilities, the presumption raised by s.361 that Ms Kavassilas’ dismissal was taken, inter alia, by reason of her temporary absence. The evidence presented on its behalf failed to satisfy me that the directors of MTA had no knowledge of her absence and of its reasons when they took this action, nor that her temporary absence did not ‘actuate’ nor was ‘disassociated’ from their decision to summarily dismiss her while she was absent from work on 11 August 2010 (c.f. Jessup J in Sperandio v Lynch (2006) 160 IR 360 at [91]).
83.Indeed, on my above findings, the directors were at all relevant times aware of her temporary absence, and that it was explained by the taking of sick leave, and that Ms Kavassilas would present a relevant medical certificate if it lasted beyond two days. The letter of termination itself suggests that her absence provided a reason for the termination – albeit that the letter also falsely suggested that the directors had not been informed of its justification. The evidence of one of the directors expressly supported the inference that her absence itself provided one of the important reasons for the action being taken. That this may have been the case tends to be supported, rather than otherwise, by the surrounding circumstances of unfairness and unsubstantiated explanations for the summary dismissal. As I have explained, I do not accept the contention, first raised in the evidence of the directors at the end of the trial, that they had already made a decision to dismiss Ms Kavassilas before the period of her absence had commenced.
84.Taking into account the above matters, and my lack of satisfaction as to the truth and substance of all the grounds for the dismissal which were propounded in the letter of termination, in the respondent’s pleading in this court, and in its directors’ evidence to the court, I am satisfied that MTA should be found liable for contravention of s.352 of the Fair Work Act.
Following the delivery of my judgment, the matter was relisted on 7 March 2012 to receive submissions in relation to the form of my orders, the quantum of compensation and interest to be awarded to Ms Kavassilas, and any applications for costs. Counsel filed written submissions, and made helpful submissions, which enabled me at the conclusion of the hearing to make the orders which are set out above. I sketched my reasons for making the orders orally, and indicated that I would later provide my reasons in writing.
Counsel for the parties agreed as to the amount of an award of compensation and interest which would give effect to my published reasons. I am grateful for their assistance, and accepted their calculations. As agreed, I ordered MTA to pay compensation under s.545(2)(b) of the Act in the amount of $33,706.21, plus interest under s.547 on that award in the amount of $4,605.74.
Penalty
Counsel provided helpful written submissions as to the principles upon which my discretion to assess an appropriate penalty should be exercised, and how they should be applied to the present circumstances. I did not discern any disagreement as to the principles, and it is sufficient if I summarise the effect of the authorities they cited.
The maximum penalty able to be imposed on a corporate employer for contravention of s.352 is $33,000. Since I am addressing no other contraventions by MTA, no issues arise under sentencing principles concerning multiple penalties for the same course of conduct, nor under the ‘totality’ principle requiring consideration of the cumulative level of multiple penalties.
When assessing the appropriate penalty within the range from nil to the maximum, I must arrive at an amount which is proportionate to the gravity of the unlawful conduct, and also takes into account other sentencing considerations including deterrence (cf. Graham J in Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560, [2008] FCAFC 8 at [54]). The matters which become determinative in each case differ with the particular circumstances, and recent judgments of the Full Court have emphasised the discretionary nature of the power to impose civil penalties for breach of industrial legislation, and have supported a mental process of ‘instinctive synthesis’ (cf. Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (supra) at [27]).
Both counsel submitted, however, that it is appropriate to consider a non‑exhaustive list of considerations suggested in recent authorities, being:
·The nature and extent of the conduct which led to the breaches.
·The circumstances in which that relevant conduct took place.
·The nature and extent of any loss or damage sustained as a result of the breaches.
·Whether there had been similar previous conduct by the respondent.
·Whether or not the breaches were deliberate.
·Whether the respondent had exhibited contrition.
·Whether the respondent had taken corrective action.
·Whether the respondent had co‑operated with the enforcement authority.
I have considered all of these matters, and can explain my conclusions broadly.
My previous judgment, particularly in the findings I have quoted above, indicates the circumstances of the contravention. The submissions of counsel as to the culpability of MTA focused upon the mental state of the two directors when deciding to terminate Ms Kavassilas’ employment while she was absent on sick leave on 11 August 2010. As my judgment indicated, I could not arrive at clear findings as to their true motivations, although I made positive findings that they saw a perceived benefit and urgency in making the decision as a result of her absence on sick leave.
I accepted submissions by counsel for MTA, that I did not find that there was conscious disregard of a known statutory prohibition on dismissal because of temporary absence on sick leave, and that the circumstances cannot therefore be regarded as coming within the most serious contraventions of s.352.
However, other elements in the circumstances still point to a serious degree of culpability. There was, at least, carelessness in the thinking of the two directors as to their legal position in relation to the lawfulness of their action under the Fair Work Act, which amounted to reckless disregard of their legal obligation. This was aggravated by the fact that one of the directors was a legal practitioner who should have better appreciated MTA’s legal position and advised his co‑director. There was also an inexcusable adoption of baseless grounds for termination being presented to Ms Kavassilas in the termination letter, with an intention, it appears to me, to obscure the real motives of the directors and to give a veneer of justification for their unfair and summary proceedings.
Moreover, all the baseless grounds for summary dismissal were maintained throughout the present proceedings, until abandoned in stages throughout the trial when they became manifestly indefensible. There is nothing in the evidence or submissions to me on the part of MTA suggesting any element of ‘contrition’ or ‘corrective action’ or ‘co‑operation with the prosecutor’ in recognising the appropriate penal and compensatory consequences of the contravention.
I am satisfied that Ms Kavassilas suffered substantial financial loss and mental stress as a result of the contravention. As I shall explain, I am not confident that my awards of compensation, penalties, and costs will completely answer all her hardships, including by being required to pursue MTA in the present litigation.
All these elements in the directors’ conduct confirm in my mind the need for a penalty to carry a significant element of deterrence in relation to their conduct of employment matters in the future, as well as general deterrence of directors of small businesses in a similar situation. The fact that the victim was a senior manager, does not alter the seriousness of a failure to ensure that the dismissal did not contravene an important statutory protection for all employees while they are absent on sick leave.
I accept that there is no evidence of any other contraventions of industrial legislation on the part of MTA or its directors, nor evidence of similar conduct in relation to its employees or those of the related companies.
No other substantial mitigating factors emerge, and there is no suggestion in evidence or submissions that an otherwise appropriate level of penalty could have ‘crushing’ or extraordinary punitive consequences for MTA or its directors.
Taking into consideration all the relevant considerations which were more fully explored in the submissions of the parties, I concluded that a penalty of $20,000 would be most appropriately imposed on the employer.
It is common ground that the Court has power under s.546(3) of the Act to order that the penalty must be paid to the applicant, and that such an order would be usual in the circumstances of the present matter (see, recently, discussion of authorities in Woodside Burrup Pty Ltd v Construction, Forestry, Mining & Energy Union [2011] FCA 949).
Counsel for the respondent did, however, note suggestions in some Federal Court judgments that this course should not be followed if this would result in a ‘windfall’ for Ms Kavassilas disproportionate to her losses and expenses, including legal expenses (citing Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357, [2008] FCAFC 170 at [69]). Counsel therefore suggested that I should take into account the monetary amounts which would otherwise be recoverable by Ms Kavassilas under my awards of compensation and costs (if any).
I note that the opinions of the justices of the Federal Court are not unanimous that considerations of ‘windfall’, recompense, or compensation for a prosecutor are relevant to the discretion under s.546(3) or its predecessors. However, I do not consider that I need to explore the somewhat diverse judicial statements on this topic.
It is enough for me to conclude that, in my opinion, the monetary outcome of the present case would not result in anything which could be characterised as a ‘windfall’ to Ms Kavassilas if she is the recipient of the penalty I imposed on MTA, particularly taking into account the evidence of her solicitor that the total amount of her legal costs and disbursements in the present proceedings is $114,703.92. Indeed, this evidence suggests that in financial terms she may have obtained only a pyrrhic victory as a result of pursuing her former employer in the present proceedings.
In this respect, I note that Ms Kavassilas has not claimed any additional compensation for considerable levels of emotional stress caused by her employer’s unfair, peremptory, and (as I have found) unlawful conduct when dismissing her. Her stress must have been continued and exacerbated by the manner in which MTA has defended these proceedings. I do not accept that, as was submitted for MTA, this suffering is to be minimised by the consideration that Ms Kavassilas prior to her dismissal had been suffering symptoms of stress as a result of other aspects of her employment, nor by the consideration that her employment was likely to have come to an end before November 2010 even if she had not been unlawfully dismissed in August.
Costs
Ms Kavassilas seeks a costs order against MTA covering all her costs in the proceedings, on an assessment either under the party/party costs scales and taxation procedures under the Federal Court Rules, or under this Court’s ‘events based’ schedule of costs under Sch.1 to the Federal Magistrates Court Rules 2001 (Cth). The former is a course authorised by r.21.02(2)(c).
It is common ground between counsel that the present matter is subject to the provisions of s.570(2) of the Fair Work Act, which usually preclude any award of costs, including to the successful party at the conclusion of contested litigation. It provides:
570 Costs only if proceedings instituted vexatiously etc.
…
(2)The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following:
(i)the party unreasonably refused to participate in a matter before FWA;
(ii)the matter arose from the same facts as the proceedings.
The applicant’s written submission identified the following grounds for a special costs order:
43The Applicant contends that the Respondent engaged in the following unreasonable acts or omissions:
(a)not accepting the settlement offers referred to in the affidavit of Stephen Boatswain sworn February 2012;
(b)discontinuing its Cross Claim on the morning of the first day of the trial in circumstances where the Respondent had given no prior indication of its intention to do so. As a result, the Applicant was required to incur costs in preparing her Defence to the Cross Claim and affidavits to support her Defence to the Cross Claim. Such costs have been thrown away by reason of the very late and unexplained decision by the Respondent to discontinue its Cross Claim on the first morning of the trial;
(c)conceding during the course of the hearing that the Respondent had no proper basis to summarily dismiss the Applicant, with the result that she is entitled to damages equivalent to one month’s notice. Such a concession was properly made because the summary dismissal was always without “proper substance” (paragraph [50] of the judgment). However, the concession should have been made in the Respondent’s Defence, rather than part way through the hearing. The Respondent’s very late concession resulted in the Applicant incurring wasted costs in preparing affidavits and submissions in relation to the question of whether the Respondent breached the Applicant’s employment contract by summarily dismissing her in the circumstances in which it did so;
(d)the overall manner in which the Respondent defended the Applicant’s claim, including “poorly particularised pleadings and affidavits” (paragraph [30] of the judgment), last minute decisions not to call key witnesses (thereby causing the Applicant to waste costs in preparing to cross examine those witnesses), a last minute decision to discontinue the Cross Claim and a last minute decision to concede the summary dismissal point constituted “unreasonable acts and/or omissions” on the part of the Respondent; and
(e)the Respondent’s making and continuation of its denial of the alleged breach of s.352 of the FW Act was unreasonable in circumstances where its purported reasons for termination were “always without proper substance” (paragraph [50] of the judgment), the directors of the Respondent were aware that the Applicant was absent due to illness at the time she was dismissed, the Applicant’s absence from work was an “important consideration” in the minds of both decision makers, and the directors of the Respondent proceeded to give evidence which was unreliable and unpersuasive (see, for example, paragraph [24] of the judgment).
44In addition, it is apparent from the evidence in paragraphs 2 to 4 of the affidavit of Mr Boatswain, solicitor for the Applicant, that the Respondent unreasonably refused to participate in the matter before Fair Work Australia and that matter arose from the same facts as the proceedings subsequently brought in this Court (s.570(2)(c) of the FW Act).
Counsel for the respondent submitted that none of these matters was shown in the evidence, or would be sufficient to justify an exceptional award of any amount in costs against his client.
I have considered the evidence of exchanges between the parties before and after the commencement of the proceedings in this Court. This included evidence of exchanges in the course of conciliation proceedings in Fair Work Australia and a mediation in this Court, to which no objection was taken as to its admissibility. The significance of this evidence is difficult to assess, since the parties appear to have gone further in their oral exchanges, than they were prepared to go in correspondence marked ‘without prejudice, save as to costs’. In the correspondence, Ms Kavassilas’ last offer shortly before the commencement of the trial was to accept $34,000 on conditions, including acceptance within 7 days.
The parties may be open to some criticism, perhaps on both sides, for not having arrived at a pre‑trial compromise and settlement, but I am strongly of the view that the power to award costs under s.570 should not be applied with a fine balance in relation to settlement negotiations, particularly where some or all of the negotiations were probably covered by statutory confidentiality, even though it has not been relied upon in today’s hearing.
In all the circumstances, and noting that my judgment did not accept the entirety of Ms Kavassilas’ claim for compensation, I am not satisfied that the evidence of the parties’ negotiations establishes an unreasonable act or omission on the part of MTA which caused Ms Kavassilas to incur costs in the proceedings and which she should be awarded under s.570(2)(b).
Nor am I satisfied that the evidence of exchanges occurring in Fair Work Australia amounted to a ‘refusal to participate in a matter before Fair Work Australia’ within s.570(2)(c), notwithstanding a degree of unreasonable recalcitrance on the part of MTA.
I am, however, satisfied that MTA’s conduct of its defence in the proceedings commenced in this Court contained unreasonable assertions of factual defences and cross‑claims which it should have been aware were without any proper foundation, and which very substantially increased the legal costs incurred by Ms Kavassilas. This occurred in a situation where at all times MTA was represented by a legal practice conducted by its director, Mr Levingston, and for that reason might be assumed to be less constrained by costs concerns in relation to its own case than would be a usual litigant.
A very large proportion of the evidence presented by Ms Kavassilas was required to address baseless assertions of serious misconduct, upon which MTA purported to justify her summary dismissal in its letter of termination, and which it then repeated in its pleadings by way of defence and cross‑claim. My principal judgment explains how these assertions were either withdrawn during the trial, or were found by me to be contradicted by MTA’s own email records and the oral evidence of its directors or were otherwise lacking in any substance. The assertion that the directors were unaware that Ms Kavassilas was absent on claimed sick leave, maintained in the affidavits of the directors, was only withdrawn after it was contradicted by them under cross‑examination in the face of their own emails. The significant, and never adequately particularised, assertions that Ms Kavassilas harassed and bullied employees, and ‘consistently failed to carry out her duties’ in a satisfactory manner, and caused financial loss to MTA, were maintained up to and throughout the first part of the trial on 1 and 2 June 2011 (see transcript p.45‑48). The later abandonment of some of them was left until the start of the resumed hearing on 15 November 2011, when MTA’s reliance on the affidavits of the relevant employees was withdrawn (see transcript p.3). It was then, for the first time, also conceded that MTA had no right to summarily terminate Ms Kavassilas’ employment. This still left considerable residual uncertainty as to how the directors would justify their actions. Moreover, as my judgment explains, they were never able to clarify their motives fully to my satisfaction.
In my opinion, the lack of evidentiary foundation for most of MTA’s assertions should have been known to the two directors before they gave the instructions which resulted in these issues being litigated. The weakness of its case in relation to these issues was then recognised at unreasonably late stages in the course of the trial; and by saying that I am not critical of counsel, who, it appears to me, probably only obtained instructions to make concessions once they had become patently necessary in the light of his client’s evidence as it emerged from the witness box.
In my opinion, the assertion and maintaining of most of these false issues until the end of the trial constituted unreasonable actions in the defence of proceedings in this Court on the part of MTA. It is also clear to me that it must have resulted in Ms Kavassilas incurring substantial additional legal costs. This is, in my opinion, manifest from a superficial consideration of the Court’s file and the transcript of the hearing. She was, in my opinion, reasonably led to perceive that the whole conduct of her duties throughout her employment, in particular, in relation to staff management, was in issue. It was, in my opinion, reasonable for her to meet MTA’s allegations with bulky affidavit and documentary evidence. It was reasonable for her legal representatives to prepare for a trial covering all of these issues, including the need to prepare thorough cross‑examination of the witnesses whose affidavits on these matters were filed by MTA.
I do not accept that only a detailed examination of Ms Kavassilas’ solicitor’s itemised bill of costs and disbursement could establish that her total bill was probably very substantially augmented by the expense of meeting these allegations.
Moreover, in my opinion, taking into account the objectives of this Court and of its costs powers, it is appropriate for me to adopt a global approach to quantifying this component of Ms Kavassilas’ legal costs, and not to put the parties to further significant expense by requiring a detailed taxation approach to identifying them.
I am therefore satisfied that the precondition to the exercise of a costs discretion is satisfied in terms of s.570(2)(b), and that it is appropriate to exercise the costs discretion in favour of Ms Kavassilas.
I also consider that it is appropriate to exercise my discretions concerning the manner by which a costs award should be quantified, by avoiding the necessity for a detailed inquiry into precisely the extent to which particular items in a detailed bill of costs and disbursement should be found attributable to the unreasonable actions and omission by MTA when presenting and maintaining false issues of factual controversy in the proceedings.
In my opinion, this Court’s cost powers encompass a power to specify a proportion of Ms Kavassilas’ party/party costs which could fairly and reasonably be regarded as attributable to the conduct coming within s.570(2)(b), although I accept that this should be approached cautiously so as not to allow an over‑assessment of that component. In my opinion, on a defence reasonably presented by MTA, the amount of written evidence required to be filed and answered by Ms Kavassilas would clearly have been at least one half of what was reasonably prepared and presented by her, and the preparation time of her counsel and his solicitor for a protracted trial on that evidence would plainly have been less than half of that to which they have been put. The trial itself would have been easily manageable within the two days initially set aside.
I therefore consider that it would be fair and reasonable to adopt a global approach to the award of costs, by ordering that MTA pay one half of the applicant’s costs as agreed or taxed on a party/party basis under the Federal Court Rules. I do not accept that a taxation using Schedule 1 to the Federal Magistrates Court Rules would provide a suitable scale, since it was not intended to encompass matters requiring the extent of preparation as was reasonably required in this matter.
For all the above reasons, I made the orders set out at the start of this judgment.
I certify that the preceding forty‑three (43) paragraphs are a true copy of the reasons for judgment of Smith FM
Date: 29 March 2012
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