Liang Chen v Right2Drive Pty Ltd - [2023] FWC 627

[2023] FWC 627

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.400A—Costs against parties in unfair dismissal matters

Liang Chen
v

Right2Drive Pty Ltd

(U2022/9330)

COMMISSIONER BISSETT

MELBOURNE, 30 MARCH 2023

Application for an order for costs

On 3 February 2023 Right2Drive Pty Ltd made an application to the Fair Work Commission (Commission) for an order for costs under s.400A of the Fair Work Act 2009 (FW Act) against Mr Liang Chen.

Right2Drive says it incurred legal fees in applying to dismiss the application for a remedy for unfair dismissal made by Mr Chen pursuant to s.399A of the FW Act (s.399A application) and seeks an order for costs in the sum of 75% of its legal fees (and further costs in respect of costs associated with the making of the application for a costs order). Accounting for those further costs ($2,363.00, provided in its submissions on 17 February 2023) it says it has spent $10,299.00 and seeks an order for costs of 75% of this figure ($7,724.25).

Right2Drive was represented by lawyers and Mr Chen by counsel at the hearing of this application, permission having been previously granted.

BACKGROUND

On 17 September 2022 Mr Chen made an application for an unfair dismissal remedy under s.394 of the FW Act. Mr Chen alleged he was unfairly dismissed by Right2Drive Pty Ltd on 16 September 2022.

The application was listed for hearing in February 2023 but was adjourned to 27, 28 and 29 March 2023.

On 21 December 2022 Right2Drive made a s.399A application that the unfair dismissal application made by Mr Chen be dismissed on the basis that a settlement agreement had been concluded but Mr Chen had failed to discontinue the matter. The application also sought an order for costs incurred since 14 December 2022, in the event that Mr Chen did not discontinue his application for an unfair dismissal remedy prior to the hearing of the s.399A application.

The s.399A application detailed that on 30 November 2022 Mr Chen made a without prejudice offer to resolve the unfair dismissal proceedings and that the offer was accepted by Right2Drive without equivocation on 14 December 2022. In accepting the offer Right2Drive confirmed it would execute settlement on receipt of a Form F50 Notice of discontinuance from Mr Chen, seeking it no later than close of business on 16 December 2022.

In response to the s.399A application Mr Chen suggested that I could not hear the application as it related to without prejudice discussions between the parties.

On 23 December 2022, following consultation with the parties, I issued directions listing the s.399A application for hearing on 1 February 2023. Previous directions concerning the filing of materials and evidence in the substantive s.394 application were vacated as well as the substantive hearing listed for March 2023. The directions were in the following terms:

1. The Directions previously issued by the Commission are set aside in full and the hearing listed for 27 to 29 March 2023 is vacated.
2. Mr Chen…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FWC 627
Decision Date: 30 MARCH 2023

CaseChat Overview and Summary

This case involves an application by Right2Drive Pty Ltd for an order for costs under s.400A of the Fair Work Act 2009 against Mr Liang Chen. The application arose from a settlement offer made by Mr Chen that was accepted by Right2Drive. Despite the acceptance, Mr Chen did not discontinue his application for an unfair dismissal remedy, leading Right2Drive to incur legal costs in making a s.399A application to dismiss the unfair dismissal application. The Commission was required to determine whether Mr Chen's failure to discontinue his application following the settlement constituted an unreasonable act or omission under s.400A of the Act. The Commission also had to consider whether, if Mr Chen's conduct was found unreasonable, costs should be awarded and, if so, in what amount.

The Commission found that Mr Chen's failure to discontinue his application for unfair dismissal immediately upon acceptance of his settlement offer by Right2Drive was an unreasonable act. Despite Mr Chen's assertions of doubt about the terms of the settlement, the Commission concluded that such doubts did not justify his failure to act. The Commission determined that Mr Chen's conduct caused Right2Drive to incur costs unnecessarily and that it was appropriate to exercise its discretion to award costs. The Commission ordered Mr Chen to pay Right2Drive $5,123.25, representing 75% of the costs incurred from 23 December 2022 to 18 January 2023. The Commission did not award costs for the making of the costs application itself, finding that the costs application would not have been necessary had Mr Chen discontinued his application promptly.

Orders