Liane Trainor v Wild West Pty Ltd

[2024] FWC 1050

[2024] FWC 1050

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 - Application for unfair dismissal remedy

Liane Trainor
v

Wild West Pty Ltd

(U2023/11194)

DEPUTY PRESIDENT O'KEEFFE PERTH, 22 APRIL 2024

Application for costs under s.401 – application dismissed

1. This decision concerns an application initially lodged on 19 March 2024 by Wild West Pty Ltd (the Costs Applicant) for costs orders against the representative of the Applicant in the substantive matter, being Petherick Cottrell Pty Ltd trading as Petherick Cottrell Lawyers (the Costs Respondent), pursuant to s 401 of the Fair Work Act (the Act). I note that the substantive matter was determined on 5 March 2024 and so the application was made within the fourteen day time limit imposed by the Act.

1. The substantive matter was an unfair dismissal application.  In the substantive decision, being [[2024] FWC 567], I found that the Fair Work Commission (FWC) did not have jurisdiction to determine the matter because the Applicant Ms Trainor had resigned her employment of her own accord.  The Costs Respondent had, on behalf of Ms Trainor, pursued an argument that certain comments made by one of the owners of the Costs Applicant amounted to the termination of Ms Trainor’s employment.  However, I found that on balance of probability that those comments did not terminate the Applicant’s employment and, even if they had, such termination was effectively retracted within five minutes.

1. In the application for costs, the Costs Applicant submitted that the Costs Respondent had encouraged its client to continue with the unfair dismissal application, when it should have been reasonably apparent that there was no reasonable prospect of establishing that the Applicant had been dismissed.  The Costs Applicant further submitted that there was a clear basis in the reasons for decision that it should have been apparent to the Applicant’s representative that the Applicant had no reasonable prospect of success in establishing that she has been dismissed.  Furthermore, the Costs Applicant submitted that it was clear from the evidence that the Applicant’s case had no merit but the Applicant’s representative continued with the application to the significant cost and detriment of the Costs Applicant. 

1. In further submissions, the Costs Applicant proposed that the evidence submitted in the matter clearly indicates that the Applicant did not accept the Cost Applicant’s offer to remain employed and chose to end her employment and was not dismissed. The Costs Applicant submitted that such evidence was of a kind that a legally qualified and experienced representative ought reasonably to have identified at the earliest time in accepting instructions and in analysing the circumstances, either as an obvious matter from the recording or from all the circumstances. As such, the Costs Respondent ought to have advised its client that it was at all times likely that her own decision to end her employment would be fatal to an unfair dismissal application.

1. The Costs Applicant also took issue with the conduct of negotiations by the Costs Respondent, and cited various items of correspondence between the parties, which were attached to the application, as evidence of this conduct.  The Costs Applicant also claimed, citing the delays in complying with directions which initially led me to dismiss the matter, that the Costs Respondent’s negligence in this regard had incurred additional costs for the Costs Applicant.

1. In response to the application, the Costs Respondent submitted that there was a clear conflict of evidence between the parties and cited several comments I had made in the substantive decision that were critical of some of the evidence given by the witnesses for the Costs Applicant.  The Costs Respondent also cited my finding that on balance of probability one of the Costs Applicant’s witnesses had, despite her denial, made the statement that was argued by the Costs Respondent to be a statement of termination. 

1. The Costs Respondent rebutted the submission that it had behaved inappropriately during negotiations and noted that its client had been prepared to accept an offer of settlement albeit that such offer had been rejected in the first instance and when the client agreed to accept it at a later time it had been withdrawn.  The Costs Respondent, in conclusion, submitted that the Costs Applicant had been the party who had been unreasonable in continuing the litigation and, given the credibility issues with its witnesses, should perhaps be the party subject to a costs order.

1. In its submissions in reply, the Costs Applicant essentially reiterated the point made in its application, but further noted that the Costs Respondent’s client was a casual employee whose employment could have been terminated without notice for refusing to follow a lawful instruction, being the instruction to remain at work on 27 October 2023, which was the day of her resignation.

Consideration

1. The Act provides, at s.401 in part, as follows:

401 Costs orders against lawyers and paid agents

(1)  [Application] This section applies if:

(a)an application for an unfair dismissal remedy has been made under section ; and

(b)a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c)under section , the person is required to seek the FWC's permission to be represented by the representative.

(1A)  [When FWC may make costs order] The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

1.the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

2.of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

1. In its application, the Costs Applicant contends that the Costs Respondent caused the Costs Applicant to incur further legal costs by:

i.Encouraging (its) client to continue with her application; and

ii.Failing to take steps to seek to assist (its) client to settle the matter on the clearly reasonable terms offered by the employer (the (Costs) Applicant); and

iii.Failing to advise the employee her application did not have a reasonable prospect of success.

1. In considering s.401 of the Act, the Full Bench in Sharkey v Life Without Barriers [2019] FWCFB 7644 was guided by the principles outlined in Barkhazen v Conair Australia Pty Ltd (No 2) [2018] FCA 992, in which Justice Bromwich found that the Federal Court’s power to make a costs order against a lawyer is well established and opined that it is a power that must be exercised with care and discretion and only in a clear case. His Honour went onto say:

“The relevant principles were helpfully summarised by Wigney J in Mitry Lawyers at [44] as follows:

1.Instituting or maintaining a proceeding on behalf of a client which has no, or substantially no, prospect of success will not, without more, invoke the jurisdiction to make a costs order against a lawyer.

2.Something which involves “unreasonable conduct” is required.

3.What constitutes unreasonable conduct will depend on the circumstances of the particular case.

4.     The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success.

5.     The circumstances must involve or result in a serious dereliction of duty owed to the court, or serious misconduct in promoting the course of, and the proper administration of, justice.

6.An ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless.

7.The reason that the mere pursuit of an unmeritorious case is not so sufficient to invoke the jurisdiction to make a costs order against a lawyer is that a party is entitled to have a practitioner act for him or her in an unmeritorious case. The court is concerned to avoid the risks of a practice developing whereby lawyers endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of personal costs orders being made against them.”

1. It is clear that the FWC must exercise great care in assessing costs applications and should only order costs in a clear case where a lawyer has engaged in unreasonable conduct.  In the substantive matter, I find that the Costs Respondent’s client was genuinely aggrieved by the ending of her employment and wanted to challenge her former employer.  There was clearly an issue in the employment relationship between the Cost Respondent’s client and the Cost Applicant’s client Ms West and, as I found in the decision, Ms West in all likelihood would have preferred the Cost Applicant’s client to cease her employment. I also find that the circumstances of the dismissal were somewhat unusual and perhaps difficult to categorise into any of the common scenarios that bring about the end of employment.  As such, I am not persuaded that the case run by the Costs Respondent could have been said, at the outset at least, to have no reasonable prospects of success. 

1. In such circumstances, I do not find that the Costs Respondent has engaged in unreasonable conduct by continuing with the matter.  Nor do I accept that the manner in which negotiations were conducted by the Costs Respondent were inappropriate.  It is to be expected that parties will be robust in the positions they take and not surprising that the final settlement offer from the Costs Applicant, which involved no payment but merely a statement or service, a separation certificate (which should have been issued in any case) and an undertaking not to pursue the Costs Applicant’s client for costs or damages in relation to what it described as a clear breach of the Surveillances Devices Act, was rejected. 

1. Finally, with respect to the delays caused by the dismissal of the original application and the revocation of that dismissal, I was persuaded at the time that as the non-receipt of submissions on the final due date was as a result of an internal IT issue at the FWC, it would have been unfair to the Costs Respondent’s client to deny her an opportunity have her case heard.  I am of the view that it would be unfair to now penalize the Costs Respondent for my decision to revoke the dismissal. 

1. In summary, I do not find any grounds to award costs against the Costs Respondent and as such, no order for costs will issue.

DEPUTY PRESIDENT

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