Matthew Brian Holmes v Rig 4 Pty Ltd T/A Safetek

[2021] FWC 113

[2021] FWC 113

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Matthew Brian Holmes
v
Rig 4 Pty Ltd T/A Safetek
(U2020/9252)

COMMISSIONER RIORDAN SYDNEY, 14 JANUARY 2021

Application for costs.

[1] On 7 July 2020, Mr Mathew Holmes (the Applicant) filed an application (the Unfair Dismissal Application) pursuant to s394 of the Fair Work Act 2009 (the Act) for a remedy for an alleged unfair dismissal.

[2] The Unfair Dismissal Application named Rig 4 Pty Ltd T/A Safetek (the Respondent) as the Applicant’s former employer.

[3] On 6 November 2020, the Applicant discontinued the Unfair Dismissal Application.

[4] On 10 November 2020, the Respondent filed an application (the Respondent’s Costs Application) with the Commission for the Applicant to pay the Respondent’s legal costs pursuant to section 400A and 611 of the Act.

[5] On 13 November 2020, my Chambers wrote to the parties asking them whether they would like to make submissions regarding the Respondent’s Costs Application. The Respondent elected not to file further material and submissions; the Applicant elected to respond to the Respondent’s Costs Application. The Respondent filed submissions in reply.

Procedural Background

[6] As outlined above, the Applicant filed the Unfair Dismissal Application on 7 July 2020.

[7] On 29 July 2020, the Respondent filed with the Commission a response to the Unfair Dismissal Application. The Respondent’s response was prepared by their representative Mr Richard Smallwood (the Respondent’s Representative).

[8] On 30 July 2020, the Respondent and the Applicant attended a conciliation with a staff conciliator. The Unfair Dismissal Application was not resolved during the staff conciliation.

[9] The Unfair Dismissal Application was allocated to Deputy President Boyce.

[10] On 3 August 2020, Deputy President Boyce ordered the parties to file evidence and submissions in preparation for a Jurisdictional Hearing on 18 September 2020.

[11] On 6 August 2020, the Respondent filed a Form F53 notifying the Commission of their intention to seek permission to be represented.

[12] On 17 August 2020, the Respondent failed to comply with the Deputy President’s order to file evidence and submissions in preparation for the Jurisdictional Hearing.

[13] On 24 August 2020, Deputy President Boyce’s Chambers wrote to the parties informing them that the matter would be listed for Mention/Directions on 26 August to address the Respondent’s failure to comply with the 3 August 2020 order and to address the Respondent’s application to be represented.

[14] On 26 August 2020, the Mention/Directions conference took place as scheduled. During the proceeding, the Deputy President granted the Respondent permission to be represented and amended his directions allowing the Respondent a further period to file their submissions and evidence. Further, the hearing date was delayed by two weeks.

[15] On 4 September 2020, the Respondent filed their material in accordance with the Deputy President’s amended directions.

[16] The file was allocated to my Chambers on 25 September 2020. It was originally intended that I would conduct a Member Assisted Conciliation. If unsuccessful, the matter would be allocated back to Deputy President Boyce for determination. However, due to the Deputy President having a scheduling conflict, following an unsuccessful conciliation, the matter was allocated to me for determination.

[17] On 30 September 2020, I convened a Conference. During the Conference it became apparent that it would assist the Commission if the Applicant was to obtain legal advice. The matter was relisted for Jurisdiction Conference/Hearing on 29 October 2020.

[18] On 22 October 2020, the Applicant wrote to my Chambers seeking further time to access legal advice. I granted the adjournment, rescheduling the Jurisdiction Conference/Hearing for 12 November 2020.

[19] On 6 November 2020, the Applicant withdrew the Unfair Dismissal Application.

Legislation

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.

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 ofthe 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.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).

596 Representation by lawyers and paid agents

(1) Except as provided by subsection (3) or the procedural rules, a person may be represented in a matter before the FWC (including by making an application or submission to the FWC on behalf of the person) by a lawyer or paid agent only with the permission of the FWC.

(2) The FWC may grant permission for a person to be represented by a lawyer or paid agent in a matter before the FWC only if:

(a) it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter; or

(b) it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively; or

(c) it would be unfair not to allow the person to be represented taking into account fairness between the person and other persons in the same matter.

Note: Circumstances in which the FWC might grant permission for a person to be represented by a lawyer or paid agent include the following:

(a) where a person is from a non-English speaking background or has difficulty reading or writing;

(b) where a small business is a party to a matter and has no specialist human resources staff while the other party is represented by an officer or employee of an industrial association or another person with experience in workplace relations advocacy.

(3) The FWC’s permission is not required for a person to be represented by a lawyer or paid agent in making a written submission under Part 2-3 or 2-6 (which deal with modern awards and minimum wages).

(4) For the purposes of this section, a person is taken not to be represented by a lawyer or paid agent if the lawyer or paid agent:

(a) is an employee or officer of the person; or

(b) is an employee or officer of:

(i) an organisation; or

(ii) an association of employersthat is not registered under the Registered Organisations Act; or

(iii) a peak council; or

(iv) a bargaining representative; that is representing the person; or

(c) is a bargaining representative.

A Brief Summary of the Respondent’s Submissions

[20] The Respondent’s submissions primarily laid out a procedural history of the Unfair Dismissal Application which largely reflects the outline produced above.

[21] The Respondent’s submissions concluded with the following four paragraphs:

“16. The Respondent’s case was fully prepared in anticipation of the hearing listed for 12 November 2020, including preparation for cross-examination of the Applicant.

17. In the above circumstances, it is only fair and just that the Commission make an order in favour of the Respondent that the Applicant pays the Respondent’s costs of legal representation pursuant to either or both Section 611 and 400A of the Fair Work Act

18. The Respondent incurred significant legal costs in preparing and filing its submissions and evidence in addition to reviewing substantial submissions and statements from the Applicant as well as attending a conference before the Commission.

19. The Respondent has incurred costs and fees totalling $18,000 as a consequence of having to collate evidence to meet the Applicant’s claim and the Applicant’s evidence, much of which was irrelevant to support a claim for unfair dismissal but also in support of a claim for repayment of loan funds which the Commission had no jurisdiction to hear.” 1

A Brief Summary of the Applicant’s Submissions

[22] With respect to section 400A the Applicant submitted upon receiving legal advice they discontinued his application in a timely manner. Further, the Applicant submitted that they adduced evidence of ownership of the Respondent by way of context for his unfair dismissal application.

[23] With respect to section 611(2)(a) the Applicant submitted that they genuinely believed that at the time they made his application that it was his only practical recourse to the alleged dismissal.

[24] With respect to section 611(2)(b) the Applicant submitted that his relationship with the Respondent could potentially be characterised as an employment relationship.

A Brief Summary of the Respondent’s Submissions in Reply

[25] The Respondent submitted that in the context where the Applicant informed the Commission that they had instructed lawyers as of 21 October 2020, the Applicant should have withdrawn the Unfair Dismissal Application at an earlier date than 6 November 2020.

[26] Further, the Respondent highlighted their submission that the Applicant raised issues that the Commission had no jurisdiction to determine.

Consideration

[27] Parties are generally liable for their own legal costs that have been incurred as a result of a matter before the Commission.

[28] For the Commission to make an order for one party to pay another party’s costs either section 400A or 611 of the Act must be satisfied.

[29] Section 400A of the Act, empowers the Commission to order costs against a party (the first party) if the Commission 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.

[30] During the Conference on 30 September 2020, it became clear that the Commission would be assisted by the Applicant obtaining legal advice. To allow the Applicant to avail themselves of legal advice, I determined to adjourn the matter.

[31] It cannot be said that an Applicant is liable to pay the costs of a Respondent merely because he withdrew his application after a conciliation but before an arbitration. Such an occurrence is quiet common before the Commission.

[32] The Respondent asserted that the Applicant’s conduct in failing to seek legal advice and failing to discontinue the Unfair Dismissal Application at an earlier time resulted in them incurring legal costs. The Respondent further submitted that the Applicant advanced a number of issues which the Commission had no jurisdiction to determine and that they accumulated costs as a result. Whist this submission may contain some veracity, in the context of an unfair dismissal application where an applicant with no legal training or experience is representing themselves, neither of the above actions/omissions should be deemed unreasonable.

[33] I find that the Applicant did not cause the Respondent’s costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter.

[34] Section 611 of the Act, empowers the Commission to order costs against a party 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.”

[35] The Industrial Relations Court of Australia, has held that an application is vexatious if the main purpose of the application is to harass, annoy or embarrass the opposing party or there is another purpose for the action other than the settlement of the issues arising in the application. 2

[36] The above precedent was applied in the context of section 611 of the Act by Commissioner Asbury, as she then was, at [12] in Ross-Davis v JD Pty Ltd T/A Daniel Lightfoot Studios (Ross-Davis) [2011] FWA 3767.

“[12] Consideration of whether an application was made vexatiously requires an examination of the motive of the applicant. An application is made vexatiously when:

The predominant purpose is to harass or embarrass the other party; 

It is brought for a collateral purpose and not for the purpose of having the court adjudicate on the issues to which the application gives rise; 

Irrespective of the motive of the applicant is so obviously untenable or manifestly groundless as to be utterly hopeless; or

There is disregard of the Court’s processes or an attempt to circumvent its decisions or other abuse of process.” 3

[37] It was the unchallenged submission of the Applicant that at the time of lodging the Unfair Dismissal Application, the Applicant believed that the Unfair Dismissal Application was his only practical recourse to resolve the issue of his termination.

[38] I find that Unfair Dismissal Application was not made vexatiously.

[39] In Walker v Walker v Mittagong Sands Pty Limited T/A Cowra Quartz (Walker) [2011] FWA 2225 Commissioner Thatcher stated that the test to be applied to establish whether an application has been filed without reasonable cause reflects the test applied by a court when determining whether to summarily strike out proceedings. In Walker, Commissioner Thatcher defined the test by extracting the following paragraphs from a judgement of Barwick CJ of the High Court of Australia in General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125:

“8. The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. ... It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; ‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; ‘discloses a case which the Court is satisfied cannot succeed’; ‘under no possibility can there be a good cause of action’; ‘be manifest that to allow them’ (the pleadings) ‘to stand would involve useless expense’.

9. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or ‘so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument’; ‘so to speak apparent at a glance’.

10. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 VOL CXII-9 where he says (1949) 78 CLR, at p 91; ‘A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.’ ...” 4

(My emphasis)

[40] It is not in dispute that the Respondent advised the Applicant that he was terminated. As a result, the Applicant had every right to believe that he was an employee and therefore had recourse to the unfair dismissal provisions of the Act.

[41] With reference to the above test and section 611(2)(a) of the Act, I find that the Unfair Dismissal Application was not made without reasonable cause.

[42] In Ross-Davis, Asbury C outlined the principles relevant when considering section 611(2)(b) of the Act.

“[15] With respect to the third limb in s.611(2)(b), the terms “reasonably apparent” and “no reasonable prospects of success” have appeared in earlier versions of the legislation, and I can see no basis for departing from the principles established in cases dealing with those earlier versions. The question of whether something is reasonably apparent must be objectively determined, rather than determined on the basis of what the person making the application or responding to it believed. The test is that FWA be satisfied that it should have been reasonably apparent that an application or a response had no reasonable prospects of success. The conclusion that an application had no real prospects of success: “should only be reached with extreme caution and where the application is manifestly untenable or groundless”. Further, as Whelan C observed in Darcy v Megan Fitzgerald & Associates Pty Ltd:

“We are dealing in this case with new legislation, the parameters of which have not been tested by the Courts. ... In my view, great care should be exercised in coming to a conclusion that a party either instituted proceedings ‘without reasonable cause’ or in circumstances where it should have been reasonably apparent that the application had ‘no reasonable prospects of success’ where the facts and the law have not been tested in a hearing.”” 5

[43] With respect to the matter at hand it cannot be said that the Unfair Dismissal Application was objectively untenable or groundless. It is apparent that the factual context from which the Unfair Dismissal Application arose was complex and disputed. As such, I am not satisfied that it should have been reasonably apparent to the Applicant that the Unfair Dismissal Application had no reasonable prospect of success.

Conclusion

[44] The decision of a party before the Commission to seek legal representation is a decision of that party. When making that decision the party should be cognisant of section 611(1) of the Act. That is, unlike some other jurisdictions, ‘a person must bear the person’s own costs in relation to a matter before the FWC’.

[45] I find that the Respondent has not satisfied the requirements of either section 400A or 611 of the Act. As a result, the Respondent’s Costs Application is dismissed.

[46] I so Order.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

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 1   The Respondent’s Outline of Submissions filed 10 November 2020, [16]-[19]

 2   Nilsen v Loyal Orange Trust (1997) 76 IR 180, 181; citing Attorney-General v Wentworth (1988) 14 NSWLR 481, 491; cited in Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16 [7]

 3   [2011] FWA 3767, [12].

 4    General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125, 129; cited in Walker v Walker v Mittagong Sands Pty Limited T/A Cowra Quartz[2011] FWA 2225 (Thatcher C, 14 April 2011) at para.17, [(2011) 210 IR 370].

 5   Ross-Davis v JD Pty Ltd T/A Daniel Lightfoot Studios[2011] FWA 3767, [15].