Matthew Nunn v Southern Basketball Association Inc T/A Sabres Basketball

[2018] FWC 5524

[2018] FWC 5524

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.789FC - Application for an order to stop bullying

Matthew Nunn
v
Southern Basketball Association Inc T/A Sabres Basketball
(AB2018/128)

COMMISSIONER LEE MELBOURNE, 3 SEPTEMBER 2018

Application for an FWC order to stop bullying - application for costs - costs not ordered.

Introduction and Background

[1] Mr Matthew Nunn (the Applicant) made an application to the Fair Work Commission (the Commission) under s.789FC of the Fair Work Act 2009 (the Act) for an order to stop bullying on 8 March 2018. The Employer/Principal named in the application was Southern Basketball Association Inc T/A Sabres Basketball (SBA). Nine persons were named by the Applicant as having allegedly engaged in bullying behaviour. The Applicant is a Volunteer Basketball Coach at SBA and the persons named are Members of the SBA Board and the SBA Grievance Officer.

[2] SBA filed a Form F73 – Employer/Principal Response with the Commission on 20 March 2018. In the response the SBA indicated, among other things, that it “does not admit to any wrongdoing or accept any liability for bullying” and did not accept that the Commission “has jurisdiction in this case, but is prepared to explore a conciliatory resolution in the best and most expedient interests of the Association and its members”. 1

[3] The application was allocated to my chambers on 21 March 2018 and the matter was listed for Preliminary Conference before me on 27 March 2018. On 22 March 2018 Mr Peter Ryan, SBA President wrote to my chambers advising that he was giving advance notice that he will be seeking permission that SBA Board Members be excused from attending the Preliminary Conference for various reasons which would be set out in a letter which would refer to the legal challenges SBA has made to the application and paid work commitments of the SBA Board Members. On 23 March 2018 the Applicant’s representative advised my chambers that the Applicant would be on an international business trip departing 27 March 2018 and returning on 15 April 2018 and requested an adjournment of the Preliminary Conference to a date no earlier than 17 April 2018.

[4] On 23 March 2018 my chambers advised the parties that the earliest the matter could be listed before me after 17 April 2018 was 8 May 2018. If an earlier listing was required parties were asked to advise my chambers as soon as possible and the matter would be brought to the attention of the Panel Head. A notice of listing for a Preliminary Conference on 8 May 2018 was sent to parties on 26 March 2018.

[5] On 4 May 2018 Mr Craig Weir, Interim CEO of SBA wrote to my chambers seeking to raise issue a number of issues in relation to the application. The correspondence made reference to, among other things, Victorian Supreme Court defamation proceedings and its jurisdictional objections to this application.

[6] On 7 May 2018 SBA sent a further letter to my chambers from Mr Peter Ryan, President of SBA which stated, among other things, that in its F73 Employer Response they had made jurisdictional objections to the application primarily on the basis of first, SBA not being a constitutionally-covered business, and secondly, that the Applicant is not a worker for the purposes of a stop bullying claim. The correspondence stated “I am wondering whether these matters will be dealt with before the matter moves to any sort of mediation or discussion of the matter” and requested that 7 persons named be excused from attending the conference and that he and Mr Craig Weir be allowed to represent the persons named at the Preliminary Conference.

[7] My chambers responded to the SBA that day advising that I did not require the attendance of the 7 persons named and it was expected that Mr Craig Weir and Mr Peter Ryan would attend the conference. Further, that all matters would be discussed at the conference, including jurisdictional objections and what further programming, if any, would be required.

[8] Later that same day the Applicant’s representative sent urgent correspondence to my chambers requesting an adjournment of the Preliminary Conference. The correspondence stated that the Applicant had been called away on an urgent business trip to Adelaide on 8 and 9 May 2018 and will therefore be unable to attend the conference. A copy of the Applicant’s flight itinerary was also provided. SBA objected to an adjournment. I reluctantly determined to adjourn the Preliminary Conference. My chambers advised that I noted that the Applicant had booked the flights sometime earlier (on 30 April 2018) but chose to advise of his unavailability the day before the Preliminary Conference and this was the second adjournment request made by the Applicant to accommodate his business schedule. The correspondence noted that my chambers would advise as soon as possible when the matter would be re-listed and I advised no further adjournment requests would be granted.

[9] On 8 May 2018, SBA sent an email to my chambers expressing disappointment with the decision to adjourn the matter and made a further request for the jurisdictional matters to be dealt with prior to the rescheduled hearing date.

[10] On 11 May 2018, the matter was listed for Mention Hearing/Conference before me on 17 May 2018. Further correspondence was received from SBA on 15 May 2018 in relation to persons attending the Commission from SBA and whether jurisdictional matters will be dealt with at this hearing, if not before. My chambers advised on 16 May 2018 that all matters will be discussed at the Mention including the Applicant’s late advice of his unavailability to attend the previous conference, jurisdictional objections and what further programming, if any, will be required.

[11] On 16 May 2018 at 5:43pm the Applicant’s representative lodged a Form F50 – Notice of Discontinuance (Form F50) which indicated that the Applicant wholly discontinued this matter. My chambers wrote to parties at 5:49pm that same day confirming receipt of the Form F50 advising that as the application was withdrawn the Mention Hearing/Conference would be vacated and the Commission would close its file.

[12] SBA lodged a Form F6 – Application for costs on 29 May 2018. I issued Directions for the filing of materials in relation to the application for costs. On 13 June 2018 SBA advised my chambers that it had nothing further to add in relation to their application. The Applicant filed written submissions on 27 June 2018. It was agreed that the application would be determined on the papers without the need for a hearing.

Summary of the allegations and responses (including jurisdictional objections)

[13] The bullying allegations concerned the actions of the SBA Board in handling a complaint of inappropriate behaviour made by a player in an Under-18’s Men’s Basketball team against the Applicant, who coaches that team. In summary, the Applicant alleged that the SBA Board:

•  Failed to provide him with a copy of the allegations so that he may respond to them;

•  Refused to contact him when he made follow up requests for a copy of the allegations;

•  Did not provide him with terms of reference for the proposed investigations into the allegations; and

•  Failed to handle the complaint in a discreet and confidential manner, with the SBA Grievance Officer emailing all the parents of players in the Under-18’s Men’s Basketball team requesting any details of the Applicant’s conduct they deemed inappropriate, even that which was not specifically related to the complaint received.

[14] The Applicant contended that this process constituted unreasonable management action and has resulted in damage to his reputation within SBA.

[15] In response, SBA claimed that they were not aware the Applicant perceived he had experienced bullying prior to lodging the application with the Commission. The Applicant did lodge a complaint regarding SBA’s handling of its investigation into the complaint, though this was not specifically characterised as ‘bullying’. SBA considered its actions to be in accordance with Basketball Victoria’s Member Protection Policy in ensuring it maintains a duty of care to all players, particularly as the complaint was made by a minor. The investigation into the Applicant’s alleged misconduct returned inconclusive findings, and SBA stated that the player did not wish to pursue the matter further.

[16] SBA raised jurisdictional objections to the application. Firstly, SBA did not believe that the behaviour alleged by the Applicant was repeated, as it related to a single incident. SBA also contended that its response to the complaint was reasonable management action, conducted in a reasonable manner. SBA advised that it is an Incorporated Association, which operates as a ‘not for profit’ community-based Basketball Association, and is therefore not a constitutionally-covered business by virtue of not being a trading or financial corporation. Whilst SBA did not accept that the Commission had jurisdiction in this matter based upon the aforementioned objections, it advised it was prepared to explore a conciliatory resolution in the best in interests of SBA and its members.

The costs application

[17] SBA’s costs application is made under s.611 of the Act, which 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.

(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)”

[18] The starting point is that each party bears its own costs in proceedings before the Commission. Section 611 of the Act then goes on to provide that the Commission may order exceptions to that general rule if either s.611(2)(a) or (b) is satisfied. However, even if one of those subsections is satisfied, the Commission is not obliged to order costs. It is a discretionary decision. The power to award costs pursuant to s.611(2) is to be exercised with caution and only in a clear case. 2 

[19] The SBA made written submissions in support of their application which can be summarised as follows:

•  That the application meets both grounds under s.611(2) of the Act.

•  Because of the litigious nature of the Applicant and threatening correspondence in this and other matters, the SBA Board felt it necessary and prudent to seek legal advice.

•  Legal costs of $7,392 have been incurred as a cost of advice, specifically in relation to the application.

•  The SBA Board feels it is obliged to seek costs on behalf of its members.

•  SBA board members are volunteers who have lost significant time from work and potential earnings, though they understand if these costs cannot be considered.

•  The Applicant sought an adjournment of two conferences listed in the Commission and did so at late notice and it can be assumed that the Applicant attached no urgency to his application.

•  That the claims of the Applicant are not clearly articulated and do not amount to bullying in any event as defined under the Act, relevant evidence including medical evidence was not provided. In any event, the claims of bullying made against the SBA Board are denied.

•  No SBA Board Member has had any direct contact with the Applicant since he left the Board in November 2017, although SBA also submits that Board members are often in “close proximity” to the Applicant at the basketball stadium without issue.

•  SBA considers that in naming all SBA Board Members in the application the Applicant was simply seeking to harass, annoy and embarrass the Board Members.

•  It is clear from a meeting between the Applicant and the CEO where the Applicant referred to commencing legal proceedings and the 5 March 2018 letter where the Applicant referred to taking out an injunction that the Applicant had a predetermined position to take legal action against SBA and slow down or prevent ‘internal processes’. In this context the bullying application was used for an alternate purpose.

•  There were alternate avenues (internal resolution procedures) for the Applicant to deal with the matter which he chose not to pursue. These avenues would not have incurred legal costs.

•  The Applicant should have known, with the benefit of legal advice, that the application had no reasonable prospects of success.

•  The Applicant should have known that the SBA is not a constitutional corporation.

•  The lodging of the application was designed by the Applicant to achieve another purpose for the action, other than the settlement of the matters in the bullying application, that is, to prevent SBA taking any further action under its rules and policies.

•  The Applicant’s solicitor urged SBA to seek legal advice when the application was lodged with Commission. Legal advice was sought by SBA and legal costs were incurred in that preparation and only in that preparation.

•  SBA also refers to the concerns expressed by the Commission as to the lateness of the request for adjournment from the Applicant for the second conference and suggest that the delays were of a tactical nature

•  That the SBA has at all times acted appropriately and in good faith. 3

[20] The Respondent submits that the costs power under section 611 is not enlivened. In particular it is submitted that:

•  Much of the costs application fails to attract the operation of the Act.

•  As there have been no proceedings, there is insufficient material before the Commission to allow a determination that the proceeding was brought without reasonable cause.

•  Whether the Respondent is a constitutional corporation or not is an arguable point and the answer to the question involves some complexity.

•  That the Applicant provided detailed explanation of the behaviour that he claimed constituted bullying behaviour and had reasonable cause to bring the application.

•  There is no evidence that the Applicant brought the claim, as asserted by SBA for an alternate (presumably ulterior) purpose.

•  The suggestion that the Applicant brought the application with no intention of pursuing it is strenuously resisted.

•  The Applicant was unaware of a letter sent by the SBA on 20 March 2018 in which the Respondent advised it did not intend to take the alleged complaint further when he made the application on 8 March 2018. Further that while this is conceded to be a significant development, it did not fully address the Applicant’s concerns.

•  That on no view could it be said that the Applicant should have known that his application had no reasonable prospects of success.

•  That it is not clear who is seeking costs, the costs sought are manifestly excessive and the costs claim includes many items that are not properly recoverable. 4

Was the application made vexatiously? (s.611(2)(a))

[21] In Qantas Airways Limited v Carter, 5a Full Bench of the Commission endorsed the observations of North J in Nilsen v Loyal Orange Trust6 on when an application is made vexatiously. His Honour stated:

“[The question of whether the proceeding was instituted vexatiously]... looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.”

[22] The SBA’s submissions assert that there was an alternate purpose to the Applicant lodging the application for an order to stop bullying. That the purpose of the application was to harass, annoy and embarrass the SBA Board, that it was brought as high level strategic approach and was brought to prevent SBA from taking any further action under its rules and policies. There is no evidence to support this submission. The Applicant sought two adjournments and then subsequently discontinued his application. The reason for the first adjournment was that the Applicant was on a pre-arranged trip overseas. This is a reasonable basis to seek an adjournment. The second adjournment request was far less reasonable. The lateness of the request for adjournment on 7 May 2018, the day before the Preliminary Conference and the fact that the Applicant had booked the trip sometime before despite being aware of the conflicting dates made the conduct of the Applicant in this regard unreasonable. While I found the conduct of the Applicant in this regard to be unreasonable, this does not provide a basis for a finding that the Applicant brought the application vexatiously. If the consideration of this involved a question of whether the Applicant was engaged in “an unreasonable act or omission” I might have a different view. However, that is not the consideration here. The fact that the Applicant provided notice of his unavailability for the second listing at an unreasonably late time does not provide a basis for finding that the proceeding was instituted vexatiously.

[23] As to the SBA’s submission that the application was designed to prevent SBA from taking further actions against the Applicant, I agree that was what the application was intended to do to the extent that the actions taken thus far were said to constitute bullying actions. However, I agree with the thrust of the Applicant’s submissions on this point. Stopping (alleged) bullying is not an ulterior purpose, but is exactly what the legislation is intended to do. 7

[24] Having regard to all of the circumstances, I am not satisfied the application was made vexatiously.

Was the application made without reasonable cause? (s.611(2)(a))

[25] In the decision in Keep v Performance Automobiles Pty Ltd (Keep), 8 a Full Bench of the Commission summarised the principles relevant to when an application is made without reasonable cause:

“The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing (Church). Church is authority for the following propositions:

(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.

(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.

(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.

(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed.” 9 [Endnotes omitted]

[26] It is important to bear in mind that, for the reasons set out earlier, this matter was ultimately not the subject of any proceedings before me whatsoever, not even a private conference. In considering the application I have only the materials on the Commissions file with which to base the consideration. In the circumstances, there is simply an insufficient basis to determine if the application was brought without reasonable cause.

[27] SBA raised a jurisdictional objection to the application being made, being that SBA are not a constitutional corporation and are thereby excluded from the operation of the anti-bullying jurisdiction. Ultimately, again for the reasons set out above there was no testing of that proposition as there were no proceedings. The Applicant’s submissions refer to what it claims are activities of the SBA which would suggest that it is a trading corporation. The SBA maintains that there was no jurisdiction. It is apparent that the question of whether SBA is or is not a constitutional corporation is certainly arguable. It cannot be said in the circumstances that the fact of the jurisdictional objection should lead to a finding that the application was brought without reasonable cause.

[28] As to the merits, the same issue arises that there has been no opportunity to test the merits of the case, not even in a conference. I have only the materials on the Commissions file with which to base the consideration. In this matter, the key issue was the action taken by SBA in investigating allegations of inappropriate behaviour levelled at the Applicant, in his capacity as a volunteer basketball coach, by a player. Essentially, it is the way in which SBA conducted the investigation that was the basis of the bullying application from the Applicant. In particular, the claim that SBA did not appraise the Applicant of the process of undertaking the investigation and that the email sent by the SBA Grievance Officer on 2 March 2018 to parents of all of the players in relation to a “serious written complaint” included the following:

“…the complaint alleges inappropriate and intimidating behaviour by the Coach towards an 18.1’s player. If true and/or substantiated the behaviour would amount to breaches of the Basketball Victoria Code of Conduct and possible [sic] the Basketball Australia Member Protection Policy.

I write to you given your recent or current involvement in this team. Are you or your player aware of any such behaviour occurring within the team by the coach towards any player? Are you or your player aware of any other issues or have any other comments in regard to the coach and this team?...” 10

[29] The complaint of the Applicant was that the email lent itself to a wide interpretation of the possible alleged conduct by the Applicant and comprised a “fishing expedition” about any sort of behaviour of the Applicant rather than focussing on the subject of the complaint.

[30] Once again, there has been no testing of the evidence in any proceeding. However, it is most certainly arguable that the sending of this email to all parents of team members was unreasonable behaviour. It was not directed at the complaint made but cast a wide net looking for reports of any behaviour that might, in the opinion of parents, be said to breach the Code. The email also seeks unspecified information about issues and comments in relation to the Applicant. The best that can be said about this email is that it was ill advised. It is certainly arguable that it was unreasonable behaviour for the SBA Board to send the email (or have it sent on its behalf by the Grievance Officer). However, workplace bullying occurs when an individual or a group of individuals repeatedly behaves unreasonably towards a worker, at work, and that behaviour creates a risk to health and safety. The sending of one email does not constitute repeated behaviour. The Applicant’s submissions do not squarely address this issue though do refer to the failure of the SBA Board to provide a copy of the complaint, failure of the investigator to contact the Applicant and the general reference to the fishing expedition as enabling an understanding as to why the Applicant considered there to be repeated unreasonable behaviour towards him, constituting a risk to health and safety. 11 In his application the Applicant stated that the behaviour was causing the Applicant significant stress and anxiety which created a risk to health and safety.

[31] Based on the limited material before me, it is arguable that the alleged unreasonable behaviour could be considered to be repeated when this broader context is considered. Most certainly there is an insufficient basis to make a finding that the application was brought without reasonable cause for the reason that the behaviour was not repeated.

Should it have been reasonably apparent to the Applicant that the application had no reasonable prospect of success? (s.611(2)(b))

[32] In Keep, the Full Bench also summarised the principles relevant to the second limb of s.611(2) of the Act:

“As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.

There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;

“unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available”.” 12 [Endnotes omitted]

[33] Similarly, the Full Bench in Baker v Salva Resources Pty Ltd 13 stated:

“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 to be not reasonably arguable.”  14 [Endnotes omitted]

[34] This consideration overlaps to some extent with the considerations above. That is to say, the same considerations as to whether the claim was brought without reasonable cause can form part of the consideration as to whether the application had no reasonable prospects of success. For the reasons set out above, I am not satisfied that the application had no reasonable prospects of success.

[35] SBA points out that an additional consideration on this point is the fact that SBA advised the Applicant that the outcome of the preliminary investigation was inconclusive. This is clearly a material change that would have some impact as to whether any orders could be made. However, it is apparent that the Applicant was unaware of this fact until 20 March 2018. The application was lodged with the Commission on 8 March 2018. Therefore, it is not relevant to a consideration of whether it should have been reasonably apparent to the Applicant that the application had no reasonable prospect of success. At the time the application was made, the Applicant did not know of this fact.

[36] Having considered all of the circumstances, I am not satisfied that it should have been reasonably apparent to the Applicant that the application had no reasonable prospects of success.

Conclusion

[37] I am not satisfied that the application was made vexatiously or without reasonable cause. Nor am I satisfied that it should have been reasonably apparent to the Applicant that the application had no reasonable prospect of success. Accordingly, I have no jurisdiction to order costs and the application for costs is dismissed. 

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR700028>

 1   Form F73 – Response from an employer/principal to an application for an order to stop bullying, Attachment at [77] and [79]

 2   Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[2014] FWCFB 810 at [26] – [27]

 3   Form F6 – Application for costs, Attachment at [1] – [64]

 4   Applicant’s Submissions on Respondent’s Application for Costs at [7] – [36]

 5   Qantas Airways Limited v Carter [2013] FWCFB 1811 at [17]

 6   Nilsen v Loyal Orange Trust (1997) 76 IR 180, 181

 7   Applicant’s Submissions on Respondent’s Application for Costs at [25]

 8   Keep v Performance Automobiles Pty Ltd[2015] FWCFB 1956

 9   [2015] FWCFB 1956 at [17]

 10   Form F72 – Application for an order to stop bullying, Attachment - email dated 2 March 2018 from Mr Ian Fullagar

 11   Applicant’s Submissions on Respondent’s Application for Costs at [20]

 12   [2015] FWCFB 1956 at [18] – [19]

 13   Baker v Salva Resources Pty Ltd[2011] FWAFB 4014

 14   [2011] FWAFB 4014 at [10]