Lonie v VGW Holdings Limited

[2022] FedCFamC2G 923

Federal Circuit and Family Court of Australia

(DIVISION 2)

Lonie v VGW Holdings Limited [2022] FedCFamC2G 923

File number(s):	PEG 68 of 2021
Judgment of:	JUDGE VASTA
Date of judgment:	31 October 2022
Catchwords:	INDUSTRIAL LAW – costs application – indemnity costs sought – unreasonable act or omission – applicant pay third respondents costs – costs fixed
Legislation:	Fair Work Act 2009 (Cth): s 340,s 341, s 342, s 361, s 550, s 570
Division:	Division 2 General Federal Law
Number of paragraphs:	38
Date of last submission/s:	31 October 2022
Date of hearing:	31 October 2022
Place:	Brisbane
Counsel for the Applicant:	Mr Sippe
Solicitor for the Applicant:	Kennedy Vinciullo
Counsel for the Third Respondent:	Mr Avallone
Solicitor for the Third Respondent:	Piper Alderman

ORDERS

PEG 68 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

PHILIPPA LOUISE LONIE
Applicant

AND:

VGW HOLDINGS LIMITED ACN 147 193 511
First Respondent

LAURENCE EMMANUEL ESCALANTE
Second Respondent

CHRISTOPHER KOCH (and another named in the Schedule)
Third Respondent

order made by:	JUDGE VASTA
DATE OF ORDER:	31 OCTOBER 2022

THE COURT ORDERS THAT:

1.The Applicant pay the Third Respondent’s costs of and incidental to the application fixed in the sum of $30,000.

THE COURT NOTES THAT:

A.The Court will not provide a written version of the reasons for judgment delivered today, unless an appeal has been lodged or the Court has received a request in writing from either party seeking that written reasons be produced.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT
(Ex tempore)

JUDGE VASTA

1. On 16 April 2021, the Applicant Philippa Lonie filed an originating application in this Court.  She also filed a Form 4.  As best as I can understand the points of claim that were filed, the Applicant had alleged that the employer, the First Respondent, VGW Holdings Limited, had committed adverse action against her. 

2. The adverse action, that was alleged, seems to be that, pursuant to s 342 of the Fair Work Act 2009 (Cth) (“the FW Act”), the employer had altered the position of the employee to the employee’s detriment. Again, the points of claim are really vague about this aspect. In effect, the allegation was that there had been an undermining of the position of the Applicant so as to destroy the confidence her superiors might have in her.

3. The Applicant did not have a demotion or different duties given to her.  She was not dismissed at all.  In fact, she was doing exactly the same work and receiving exactly the same pay.

4. There is an allegation, in the points of claim, that she had been told that there would be the creation of another position which would have the title either of “Head of” whatever operations aspect or “Vice President”.  The company went about and did create the position but called it “Manager”.  This was the position given to the Applicant. 

5. The Applicant claims that by having the title of “Manager” and not having a title of “Vice President” or “Head of” was an alteration of her position.  In fact, she had not had the position of “Head of” or “Vice President”.  She was in fact given this position of “Manager”.  There does not seem to be any evidence that the position of “Vice President” or “Head of” was actually ever created.

6. What the Applicant complained of was what she would call “undermining” or “backstabbing” as well as malicious complaints about her competency.  This caused her great anguish, and this caused deterioration of her mental health.  I have no doubt that, if these things happened, there would have been a deterioration of the mental health of the Applicant, and those things just simply should not have happened. 

7. The question is whether the general protections legislation, especially s 340,s 341 and s 342 of the FW Act, are the appropriate vehicle by which there should have been redress sought. As has been pointed out during the course of today’s hearing, the Applicant also sought redress in the form of worker’s compensation for the anguish and had commenced a worker’s compensation action as a form of redress at the same time.

8. The Applicant, having filed and served these points of claim on 16 April 2021, came before the Court before His Honour Judge Kendall on 10 May 2021.  Soon after that, the First Respondent together with the Second Respondent, Laurence Emmanuel Escalante, and the Fourth Respondent, Michael Phillip Anthony Thunder, served their defence on 16 July 2021. 

9. The Third Respondent, Christopher Koch, served his defence separately around the same time.  The matter came before His Honour again on 16 August 2021.  After that, on 9 September 2021, the Applicant filed a reply. 

10. On 20 September 2021, the Applicant discontinued the matter.  I do note, though it is not particularly relevant for these purposes but for completeness, that the worker’s compensation action had been settled on a confidential basis.  This settlement occurred just before the Notice of Discontinuance was filed.

11. On 15 October 2021, the Third Respondent made an application for his costs in the matter. 

12. On 2 December 2021, Judge Lucev made orders for the timetabling of this matter and had set the matter down for hearing before himself. For other reasons, I have taken the matter into my docket and have heard the matter today from Brisbane. 

13. The Third Respondent relied on s 570 of the FW Act, which, for all intents and purposes, decreed that this jurisdiction is a no cost jurisdiction, however, has said that:

    (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… 

14. The Third Respondent said that the Applicant instituted these proceedings vexatiously or without reasonable cause. It is trite to say that the word “vexatiously” has been interpreted to mean that there is some forethought of a malicious nature in bringing the proceedings; that is, that the proceedings are scandalous or they disclose no reasonable cause of action or they are oppressive or they are embarrassing or they are an abuse of the process of the Court, and particularly, they are there really to annoy the particular Respondent. 

15. Having regard to all the evidence that I have seen, especially the evidence of the Applicant herself, I find it difficult to conclude that the Applicant was anything other than a bona fide litigant. 

16. She may have been somewhat foolish, but that did not mean that what she did in instituting the proceedings was vexatious.  Even if the proceedings were doomed to fail, that does not mean that there was a vexatiousness in the instituting of the proceedings.  It seems to me that there was always a genuine intent to bring before the Court the actions of the four Respondents and to lay it bare and for her to prove that the Applicants had done what she had said that they had done. 

17. For that reason, I am not of the view that the Third Respondent has shown me that s 570(2)(a) is applicable.

18. I turn to s 570(2)(b), which is, in those simple terms, as to whether the Court is satisfied that, in this case, the Applicant’s unreasonable act or omission caused the Third Respondent to incur costs.

19. It seems to me that when one puts matters before this Court and is asking Respondents to respond to the allegations and expend money in answering them, that the Applicant must have filed pleadings such that it is easy to discern the cause of action. 

20. I have already spoken of the vagueness of the points of claim that were filed on 16 April 2021.  The term “altering the position of an employee to the employee’s prejudice” is necessarily wide, but it does bespeak of there being some concrete aspect to the alteration that is easily discernible.  As I have said during the course of the hearing, the Applicant’s claim is extremely inchoate. 

21. There has not been given any concrete example of how this undermining of her position has in any way affected her.  The only concrete example alleged is this claim that the Applicant’s job title was changed from “Vice-President” or “Head of” to simply “Manager”.  The title may have changed, but the position and the remuneration was going to be the same at all times.  It would be extremely difficult to show that this was an alteration of the Applicant’s position to the Applicant’s prejudice.  Objectively speaking, it was more likely to be a benefit to the Applicant.

22. It is also instructive to note that the Third Respondent is not a decision-maker.  The adverse action must be taken by the employer.  The employer is the First Respondent.  It is difficult on the points of claim to ascertain what truly altered the position of the Applicant to her prejudice. 

23. The Third Respondent was the Chief Financial Officer. It has been claimed, in the number of allegations made about the conduct of the Third Respondent, that he provided misinformation to the Second Respondent, who informed the decision of the First Respondent. It is alleged that the Third Respondent, therefore, is a person involved in that contravention by virtue of s 550. But before one gets to s 550 of the FW Act, one has to determine that there has been a contravention. As I have said, there does not seem to be any concrete pleading of what the prejudice to the position was.

24. It is clear that there may have been all sorts of nasty, terrible and, it may be, untrue things said by the Third Respondent and the Fourth Respondent to the Second Respondent, but that is not sufficient to show that there had been a prejudice to her position, unless it is that it could be shown, or even pleaded, that the confidence that the First Respondent had in the ability of the Applicant was diminished solely because of the actions of the Third Respondent; that is, that the First Respondent unquestioningly accepted whatever the Third Respondent said about the Applicant. 

25. It seems to me that, unless that is clearly articulated in the pleading, it is an unreasonable act to bring someone to Court without there being a proper delineation of what it is that is said to constitute a contravention of the general protections sections of the FW Act.

26. The Applicant was given an offer to resolve the matter.  That first offer was made in July 2021.  The offer was simply to discontinue the proceeding and each party pay their own costs.  The Applicant did not accept this offer. 

27. The offer was given again, this time in August 2021, and, according to the Third Respondent, they simply did not hear any reply, though it seems that the Applicant concedes that it was also rejected. 

28. The Third Respondent submits that this rejection of those two offers, in all the circumstances, were unreasonable acts on the part of the Applicant, and that this caused the Third Respondent to incur costs.

29. The Applicant says that the decision to reject the offers was done, not through any belligerence or stubbornness, but because there was a genuine complaint that needed to be put before the Court, and she was genuinely of the belief that she had a good claim.  The Applicant points out that, as I have said, this is a no costs jurisdiction, and a “walk away” offer, as it might be known in the vernacular, did not involve any offer of compromise, and in doing so, the rejection of such an offer could not be seen as unreasonable or imprudent. 

30. However, given the problems inherent in the Applicant establishing that there had been adverse action taken against her, and then even if there had been adverse action taken against her, how that could be sheeted home to the Third Respondent, the unreasonable, or imprudent nature of the act of rejecting the offers is really self-evident.

31. This is because, even if the Applicant could establish adverse action, how it was that the Third Respondent would become liable for that adverse action, notwithstanding the provisions of s 550 of the FW Act. There needed to be something that showed that it was the Third Respondent’s actions that were the deciding, or only, factor in the decision made by the First Respondent. That aspect was something that needed to be proved by the Applicant, rather than it being a “reverse onus” aspect, because s 361 only requires the First Respondent to prove that the First Respondent had not conducted itself in that way such as to contravene the section. Satisfying the Court that s 550 brought the Third Respondent into the matter was still a matter for the Applicant to prove.

32. For those reasons, I am of the view that rejecting the offers was also an unreasonable act.

33. Having come to those conclusions, it means that, pursuant to s 570 of the FW Act, the Court can make an order for costs if it so chooses, because the prerequisites for the Court exercising a discretion, in relation to costs, have been established.

34. The Third Respondent has asked for the Court to make an order for indemnity costs.  It seems to me that there needs to be something special, or exceptional, for the Court to consider making an order for indemnity costs.  In this case, what makes the actions of the Applicant “unreasonable” are submitted to be the same factors which would constitute special or exceptional circumstances such that the Applicant should be facing an order for indemnity costs. 

35. I am not of the view that the “unreasonableness” of the conduct of the Applicant rises to a level that would justify a making of an order for indemnity costs.

36. I am of the view that it is better for the Court, having regard to all of the behaviour of the Applicant, to look at what would be a costs order that would be appropriate and to simply make that fixed costs order.  That would obviate the need for taxation. 

37. It must be remembered that, in the action proper, the only material filed by the Third Respondent was a notice of address for service and a Response which adopted much of the Response of the other three Respondents.

38. In all of the circumstances, I am of the view that the Applicant should pay the costs of the Third Respondent, fixed in the sum of $30,000.

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta.

Associate:

Dated:       9 November 2022

SCHEDULE OF PARTIES

PEG 68 of 2021
Respondents
Fourth Respondent:	MICHAEL PHILLIP ANTHONY THUNDER