Lipa Pharmaceuticals Ltd v Mariam Jarouche
[2023] FWCFB 244
•11 DECEMBER 2023
| [2023] FWCFB 244 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Lipa Pharmaceuticals Ltd
v
Mariam Jarouche
(C2023/1492)
| JUSTICE HATCHER, PRESIDENT | SYDNEY, 11 DECEMBER 2023 |
Appeal against decision [2023] FWC 493 of Deputy President Anderson at Adelaide on 28 February 2023 in matter number C2022/7079 – permission to appeal refused – costs application by the respondent in the appeal.
Background
On 20 March 2023, Lipa Pharmaceuticals Ltd (Lipa) lodged an appeal against a decision made by Deputy President Anderson on 28 February 2023. The decision concerned a jurisdictional objection raised by Lipa in respect of an application made by Dr Mariam Jarouche pursuant to s 365 of the Fair Work Act 2009 (Cth) (FW Act).[1] Dr Jarouche alleged that she was dismissed from her employment with Lipa in contravention of ss 340, 351 and 352 of the FW Act. Lipa contended at first instance that Dr Jarouche’s application was not validly made because she had not been ‘dismissed’ within the meaning of s 386(1) but rather resigned from her employment. In his decision, the Deputy President rejected this contention and, in conjunction with his decision, made an order by which he determined to issue a certificate in accordance with s 368(3)(a) of the FW Act.
In Lipa’s notice of appeal, it contended in varying ways that the Deputy President erred in finding that Dr Jarouche was dismissed within the meaning of s 386(1)(b) of the FW Act. In a decision issued on 31 May 2023, we refused permission to appeal.[2] In our appeal decision, we considered that, on the premise that Dr Jarouche did resign on 5 October 2022, it was beyond doubt that the Dr Jarouche’s resignation was ‘forced’ within the meaning of s 386(1)(b) of the FW Act. We also considered that our only doubt was whether the better view was that Dr Jarouche was dismissed within the meaning of s 386(1)(a) of the FW Act, but conceded that this was not worth pursuing since, in any event, Dr Jarouche had been dismissed within the meaning of s 386(1) of the FW Act as a matter of jurisdictional fact. We subsequently concluded that Lipa’s grounds of appeal were not reasonably arguable.
Dr Jarouche was granted permission for legal representation in the appeal pursuant to s 596(2) of the FW Act.
Principles for costs applications
Dr Jarouche has now applied for her costs in respect of the appeal pursuant to both s 400A and s 611 of the FW Act. This decision is concerned with that application. Section 400A of the FW Act provides:
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 611 of the FW Act relevantly provides:
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. …
As stated, Dr Jarouche’s costs application is advanced under both s 611(2)(a) and s 611(2)(b). We note that even if either subsection is satisfied, the Commission is not obliged to order costs. Whether costs are to be awarded at all, and the amount of any costs that are awarded, involves the exercise of a discretion.
In Hansen v Calvary Health Care Adelaide Limited,[3] a Full Bench said in relation to s 611 generally:
[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).
[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. 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.
The relevant principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Healthand Wellbeing[4] and may be summarised 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, on the facts apparent to the applicant at the time the application was made, whether 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.
In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench
in Baker v Salva Resources Pty Ltd[5] as follows (footnotes omitted):
[10] The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ have been well traversed:
·‘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.
Submissions on costs
Dr Jarouche’s submissions in support of her costs application as they appear in her Form F6 are brief and mostly reiterate the wording of s 611(2):
1. The Employer acted unreasonably, vexatiously or without reasonable cause in bringing the appeal.
2. It should have been reasonably apparent to the Employer that its appeal had no reasonable prospects of success.
3. The Appeal Panel found at [22] in their judgment in Lipa Pharmaceuticals Ltd v Mariam Jarouche (C2023/1492) that ‘Lipa’s appeal is not reasonably arguable’.
Lipa submits that Dr Jarouche’s costs application should be dismissed because she has made ‘no submission… in support of the claim for costs or how it is said the requirements of which s 400A or s 611 has been satisfied’. Moreover, Lipa claims that Dr Jarouche submitted her application out of time as s 402 of the FW Act requires that an application under s 400A or s 611 be made within 14 days of the determination of the matter by the Commission. Finally, Lipa submits that Dr Jarouche’s costs could have been entirely avoided if she had responded to an offer made by Lipa’s representatives on 21 April 2023 that it would discontinue the appeal if Dr Jarouche gave an undertaking that she had not and would not file a general protections court application.
In reply, Dr Jarouche submits that she relies on the submissions set out at [10] above. In addition, she submits that her representative made a without-prejudice offer of compromise to Lipa in relation to the costs of the appeal on 19 July 2023 and foreshadowed that she intended to make a formal costs application. Finally, she submits that it was not unreasonable for her to reject the 21 April 2023 offer as the appeal only dealt with a jurisdictional objection, and so that she had the opportunity to consider her options, including whether she would make an application for extension of time to commence proceedings in a relevant court.
Consideration
We reject Lipa’s submission that the costs application, insofar as it was made under s 611, was filed out of time. Dr Jarouche is only seeking costs in relation to the appeal. There is no time limit provided in the FW Act for the making of a s 611 application in relation to an appeal. Section 402, upon which Lipa relies, establishes a 14-day time limit only in respect of costs applications made under s 400A (which is specifically concerned with costs in unfair dismissal applications) or made under s 611 in relation a matter arising under Part 3-2 (which concerns unfair dismissal applications). It thus cannot operate to bar Dr Jarouche’s costs application under s 611.
For completeness, although it was not relied upon by Lipa, we do not consider that the time limitation in s 377 is applicable. Section 377 provides:
377 Applications for costs orders
An application for an order for costs in relation to an application under section 365 or 372 must be made within 14 days after the FWC finishes dealing with the dispute.
Although, on one view, Lipa’s appeal may be said to relate to an application under s 365, the 14-day time limitation in s 377 is expressed as operating ‘after the FWC finishes dealing with the dispute’. This language may only be read as applicable to the functions of the Commission in respect of a s 365 application at first instance and is inapt to describe its functions in an appeal under s 604.
We are satisfied, for the purpose of s 611(2)(a) of the FW Act, that Lipa’s appeal in this matter was made without reasonable cause because the grounds of appeal and the grounds upon which permission to appeal was sought were untenable and in essence no more than a re-agitation of its position already considered and rejected at first instance: that Dr Jarouche was not dismissed within the meaning of s 386(1)(b) of the FW Act. We found at paragraph [18] of our appeal decision that, on the premise that Dr Jarouche did resign, which was not contested on appeal, it was beyond doubt that this resignation was ‘forced’ within the meaning of s 386(1)(b) of the FW Act. We therefore concluded, at paragraph [22] of the appeal decision, that Lipa’s appeal was not reasonably arguable. Because we have reached the requisite state of satisfaction in respect of s 611(2)(a), it is not necessary for us to consider whether s 611(2)(b) also applies.
We consider that we should exercise our discretion in making an award of costs in Dr Jarouche’s favour. Dr Jarouche was put to unnecessary expense in responding to the appeal, and we consider that it was reasonable having regard to the nature of the issues raised by the appeal that she obtain legal representation for the hearing of the appeal. In this respect, we take into account that Dr Jarouche sought permission for legal representation under s 596(2) of the FW Act prior to the hearing, that Lipa did not oppose this application, and that we accordingly granted permission. We accept Dr Jarouche’s submission that Lipa’s offer of settlement of 21 April 2023 was not reasonable since, if accepted, it would have deprived her of the benefit of the decision under appeal to issue a certificate s 368(3)(a) of the FW Act by permanently preventing her from initiating a general protections court application. Accordingly, we do not take this into account as a matter weighing against the exercise of the discretion in Dr Jarouche’s favour.
Turning to Dr Jarouche’s itemised list of costs, we note that her Form F6 has not contained any reference to the prescribed schedule of costs contained in Sch 3.1 of the Fair Work Regulations 2009 (Cth) (FW Regulations). If an item is specified in Sch 3.1, the Commission will not award an amount greater than the relevant sum specified in the schedule. We award costs at follows:
·Item 1 is a claim in the amount of $390.00 for ‘Review of Appeal and email to [Dr Jarouche]’. It is not further particularised. We consider that the former of these claims involved perusing the first-instance decision and notice of appeal. We award an amount of $200.00 at our discretion in accordance with item 601 of Sch 3.1 for perusal of documents over 30 folios in length.
·Items 2, 11 and 24 are claims in the amount of $65.00, $55.00 and $55.00 respectively for emails sent to counsel. They are not further particularised. Given the contents and length of the emails are unclear, we consider that these were all ‘short letters’ in accordance with item 801 of Sch 3.1. Accordingly, we award $12.00 each.
·Item 3 is a claim in the amount of $165.00 for ‘Preparation of brief to counsel; email to counsel sending brief’. It is not further particularised as to the length of the brief prepared. We therefore assume the brief was three folios long and award an amount of $80.00 in accordance with item 204 of Sch 3.1.
·Items 4, 13 and 25 are claims in the amount of $55.00 each for ‘Telephone call with counsel; email to counsel’. They are not further particularised as to what these calls or emails included. We therefore award an amount of $11.00 each for the telephone calls in accordance with item 1104 of Sch 3.1, and an amount of $12.00 each for the emails in accordance with item 801 of Sch 3.1.
·Item 5 is a claim in the amount of $110.00 for ‘Telephone call to clerk; email to clerk re brief’. It is not further particularised as to what the call or email involved. We therefore award an amount of $34.00 for the telephone call, in accordance with item 1101 of Sch 3.1, and an amount of $12.00 for the email, in accordance with item 801 of Sch 3.1.
·Items 6 is a claim in the amount of $55.00 for ‘Attendance to enquiries regarding availability for counsel for hearing’. We consider this an attendance that was capable of being made by a clerk and award an amount of $34.00 in accordance with item 1101 of Sch 3.1.
·Items 7 and 8 are claims in the amount of $55.00 and $275.00 respectively for telephone calls and emails in relation to counsel availability. They are not further particularised. We consider that making multiple calls and sending multiple emails in the same day to enquire as to the availability of counsel was unnecessary. We therefore only award $23.00, equivalent to one attendance by telephone in accordance with item 1107 of Sch 3.1 and one short letter in accordance with item 801 of Sch 3.1.
·Items 9, 14 and 20 are claims in the amount of $55.00 each for emails sent to the Commission. They are not further particularised. Having reviewed the dates on which these emails were sent and their contents, we consider that these are all ‘short letters’ in accordance with item 801 of Sch 3.1. Accordingly, we award $12.00 each.
·Item 10 is a claim in the amount of $55.00 for ‘Telephone call from OS’. It is not further particularised as to what the phone call was about. We therefore award $11.00 in accordance with item 1104 of Sch 3.1.
·Item 12 is a claim for ‘Draft submissions re leave to be legally represented’ in the amount of $110.00. As s 596 submissions were necessary in response to directions given by the Commission, we award an amount of $74.00 in accordance with item 203 of Sch 3.1.
·Item 15 is a claim for ‘Review email from Fair Work Commission’, dated 2 May 2023. The email from the Commission to the Respondent’s representative was a single folio long. We therefore award an amount of $16.00 in accordance with item 601 of Sch 3.1.
·Items 16, 18, 19 and 27 are claims for ‘Telephone call with counsel’ in the amounts of $55.00, $55.00, $55.00 and $220.00 respectively. They are not further particularised. We therefore award an amount of $11.00 each for the telephone calls, in accordance with item 1104 of Sch 3.1.
·Item 17 is a claim for ‘Review 2 x emails from counsel and draft submissions’ in the amount of $110.00. The emails are not particularised as to their length. We will assume that they were up to three folios long each, and therefore award $16.00 per email in accordance with item 601 of Sch 3.1. As for the drafting of submissions, we award $74.00 in accordance with item 203 of Sch 3.1.
·Item 21 is a claim in the amount of $165.00 for ‘Update brief; email to counsel’. It is not further particularised as to the length of the brief or what was updated. We therefore award an amount of $80.00 in accordance with item 204 of Sch 3.1, assuming the updated version was 3 folios long.
·Items 22 and 23 are claims in the amount of $75.00 and $125.00 respectively for ‘Brief Counsel’. They are not further particularised as to how long this briefing lasted, though we note both claims are dated 5 May 2023. We consider that an amount of $100.00 is appropriate and we award it in accordance with item 105 of Sch 3.1.
·Item 26 is a claim for ‘Review email from counsel; locate authorities referred to in submissions; prepare bundle of authorities’ in the amount of $330.00. We will assume the email was up to three folios long, and therefore award $16.00 in accordance with item 601 of Sch 3.1. As for the preparation of the bundle of authorities, we award an amount of $74.00 in accordance with item 203 of Sch 3.1.
·Item 28 is a claim for ‘Review email from counsel; update and finalise bundle of authorities; email to Fair Work Commission; email to counsel; further preparation for hearing including prepare hard copy bundle’ in the amount of $220.00. We will assume the email from counsel was up to three folios long, and therefore award $16.00 in accordance with item 601 of Sch 3.1. The email sent to the Commission only served to attach Dr Jarouche’s list of authorities, and the email sent to counsel is not further particularised as to its content or length, and we therefore award $12.00 for each of those in accordance with item 801 of Sch 3.1. As for the preparation of the hard copy bundle, the Respondent’s bundle of authorities was 37 pages long. In accordance with item 501 of Sch 3.1 of the FW Regulations, we award an amount of $74.00 at $2.00 per page.
·Item 29 is a claim for ‘Court Appearance at Fair Work Commission Appeal’ in the amount of $1,210.00. We note that the appeal hearing only went for approximately 60 minutes. We therefore only award an amount of $221.00 in accordance with item 1109(a) of Sch 3.1.
Item 1301 of Sch 3.1 to the FW Regulations treats counsel’s fees incurred by a solicitor as a disbursement which may be charged at ‘[a]n amount that the FWC considers to be fair and reasonable according to the circumstances of the case and the seniority of counsel.’ We are guided as to what is fair and reasonable by the Federal Court of Australia’s ‘National Guide to Counsel’s Fees’, which may be applied to the taxation of costs in the Court. This guide allows for an amount in the range $1,275.00 – $5,100.00 for junior counsel’s fee on brief, including preparation and appearance on the first day of a hearing. Taking into account that the matter was for permission to appeal and the merits of the appeal before a Full Bench, the Court’s guide has not been updated since 2013, and the fact the appeal hearing only ran for a very short period, we propose to award an amount of $1,500.00 for the services of Mr Britt of counsel.
As for the services provided by Mr Latham of counsel prior to the hearing, the Court’s guide allows for an amount in the range of $265.00 – $530.00 per hour for the preparation of written submissions by junior counsel. Considering that the questions of law considered in the appeal were not particularly complex, difficult or novel, and Dr Jarouche’s appeal submissions were only two pages long, we are not persuaded that these fees were reasonably incurred. We therefore decide to award an amount of $600.00, representing two hours’ preparation at $300.00 per hour.
Conclusion
Accordingly, we award costs in Dr Jarouche’s favour to the amount of $3,480.00 pursuant to s 611(2) of the FW Act. An order to give effect to this decision is published together with this decision.
PRESIDENT
[1] [2023] FWC 493.
[2] [2023] FWCFB 101.
[3] [2016] FWCFB 8162.
[4] [2014] FWCFB 810, 240 IR 377 at [23]–[33].
[5] [2011] FWAFB 4014, 211 IR 374.
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