Meaka Pty Ltd T/A Drapac Services Trust v Ms Melanie Rivers
[2012] FWA 3127
•11 APRIL 2012
[2012] FWA 3127 |
|
DECISION |
Fair Work Act 2009
s.611 - Application for an order for costs
Meaka Pty Ltd T/A Drapac Services Trust
V
Ms Melanie Rivers
(C2011/4295)
COMMISSIONER LEWIN | MELBOURNE, 11 APRIL 2012 |
Application for costs - s.773 proceeding - s.611 jurisdiction - power - discretion - meaning of vexatious - without reasonable cause - no prospect of success
Introduction
[1] On 9 May 2011 Ms Melanie Rivers made an application to Fair Work Australia pursuant to s.773 of the Fair Work Act 2009 (the Act). Section 773 is set out below:
“773 Application for FWA to deal with a dispute
If:
(a) an employer has terminated an employee’s employment; and
(b) the employee, or an industrial association that is entitled to represent the industrial interests of the employee, alleges that the employee’s employment was terminated in contravention of subsection 772(1);
the employee, or the industrial association, may apply to FWA for FWA to deal with the dispute.”
[2] In that application Ms Rivers asserted that her employment with, Meaka Pty Ltd, trading as Drapac Services Trust (“Drapac”), had been terminated at the initiative of the employer because of her temporary absence through illness from the workplace. It is prohibited by the Act for an employer to terminate an employee’s employment if a temporary absence through illness or injury, within the meaning of the Act, forms any part of the employer’s reason or reasons for the termination.
[3] Section 772(1)(a) of the Act and Regulation 6.04 of the Fair Work Regulations 2009 (the Regulations), respectively, prescribe the relevant prohibition and the statutory meaning of an illness or injury for reason of which an employer must not terminate the employment of an employee. Those provisions are set out below:
“772 Employment not to be terminated on certain grounds
(1) An employer must not terminate an employee’s employment for one or more of the following reasons, or for reasons including one or more of the following reasons:
(a) temporary absence from work because of illness or injury of a kind prescribed by the regulations;”
“6.04 Temporary absence — illness or injury
(1) For paragraph 772 (1) (a) of the Act, this regulation prescribes kinds of illness or injury.
Note Under section 772 of the Act, an employer must not terminate an employee’s employment because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
(2) A prescribed kind of illness or injury exists if the employee provides a medical certificate for the illness or injury, or a statutory declaration about the illness or injury, within:
(a) 24 hours after the commencement of the absence; or
(b) such longer period as is reasonable in the circumstances.
Note The Act defines medical certificate in section 12.
(3) A prescribed kind of illness or injury exists if the employee:
(a) is required by the terms of a workplace instrument:
(i) to notify the employer of an absence from work; and
(ii) to substantiate the reason for the absence; and
(b) complies with those terms.
(4) An illness or injury is not a prescribed kind of illness or injury if:
(a) either:
(i) the employee’s absence extends for more than 3 months; or
(ii) the total absences of the employee, within a 12 month period, have been more than 3 months (whether based on a single illness or injury or separate illnesses or injuries); and
(b) the employee is not on paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97 (a) of the Act for the duration of the absence.
(5) In this regulation, a period of paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97 (a) of the Act does not include a period when the employee is absent from work while receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation.”
[4] The grounds upon which the application was made cited two medical certificates provided to Ms Rivers in relation to an absence through illness from her employer. Ms Rivers’ employment was terminated during the period of absence covered by the medical certificates which had been provided to her employer in circumstances which satisfy the requirements of Regulation 6.04(2). In the grounds stated in the application Ms Rivers also alleged that, in the letter of termination of employment, her employer had described the illness in respect of which she was absent as “an invention.”
[5] Further, the grounds upon which the application was made stated that the employer had given other reasons for the termination of her employment which were factually unjustified. Those reasons include, conducting a private business during her working hours, undertaking university studies during her working hours and excessive use of Drapac’s IT system to pursue her personal interests.
[6] That application was the subject of conferences conducted on 9 June 2011 and 17 August 2011. The conferences were conducted in accordance with s.776. Subsequent to those conferences, FWA issued a certificate under s.777 and Statement of Advice pursuant to s.778, stating that that an unlawful termination court application in relation to the dispute would not have a reasonable prospect of success.
[7] No unlawful termination court application has been made by Ms Rivers.
Costs, jurisdiction and power
[8] On 30 August 2011 Drapac, the applicant in this matter, made an application for an order against Ms Rivers for costs. It is that application which is the subject of this decision. Due to Ms Rivers’ pregnancy and giving birth, the hearing of the application was delayed. The application was heard on 20 March 2012 in Melbourne.
[9] The application cites s.611 as the basis for the jurisdiction and power to make the order sought. Section 611 is set out below:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 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).”
[10] Section 611 is a conditional grant of power to the Tribunal to exercise a discretion to make an order for costs against a person in a matter before Fair Work Australia. The Tribunal must be satisfied that Ms Rivers made the application in one or more of the various circumstances described in subsection (2) subparagraphs a) and b) before the power to make a costs order arises. If the Tribunal is satisfied that any of those conditions precedent exist it may then consider whether or not to exercise a discretion to make an order and if it determines to do so what the appropriate terms of the order should be.
The s.394 application
[11] It is necessary to explain some of the history of the employment of Ms Rivers, the circumstances of the termination of the employment and the subsequent dispute between Ms Rivers and Drapac in relation to the termination of the employment.
[12] Ms Rivers was employed by the Drapac between 12 August 2008 and 22 March 2011 as an office manager.
[13] On 22 March 2011 Ms Rivers’ employment was terminated by letter dated 17 March 2011.
[14] The letter cited the following reasons for the termination of the employment:
● Invention of sick and stress leave
● Running her own business from Drapac premises during work time
● Attending to university study during work time
[15] Ms Rivers disputed the validity of the reasons for the termination and on 28 March 2011 filed an application with the Tribunal under s.394 of the Act, alleging that the termination of her employment was harsh, unjust and unreasonable.
[16] That application was subsequently discontinued on 13 April 2011. No application for costs was made by Drapac in relation to that application.
[17] At this point, it is appropriate, for reasons which will become clearer below, to digress in order to note that an application for costs in relation to an application made under s.394 is conditioned by the provisions of ss. 401 and 402 of the Act. Those sections are set out below.
“401 Costs orders against lawyers and paid agents
(1) If FWA has granted permission in accordance with section 596 for a person to be represented by a lawyer or paid agent in a matter arising under this Part before FWA, FWA may make an order for costs against the lawyer or paid agent if FWA is satisfied:
(a) that:
(i) the lawyer or paid agent caused costs to be incurred by the other party to the matter because the lawyer or paid agent encouraged the person to start or continue the matter; and
(ii) it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or
(b) that the lawyer or paid agent caused costs to be incurred by the other party to the matter because of an unreasonable act or omission of the lawyer or paid agent in connection with the conduct or continuation of the matter.
(2) FWA may make an order under this section only if the other party to the matter has applied for it in accordance with section 402.
(3) This section does not limit FWA’s power to order costs under section 611.
402 Applications for costs orders
An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 401, must be made within 14 days after:
(a) FWA determines the matter; or
(b) the matter is discontinued.”
[18] It will be observed that, by operation of s.401(3) and s.402, should Drapac have intended to make an application for costs against Ms Rivers in relation to the application made under s.394 such an application was required to be made within 14 days after the discontinuance of that application by Ms Rivers. No such application was made by Drapac. The consequence is that the application before me must be considered wholly in relation to the application made by Ms Rivers under s.773. I observe in passing that, during the hearing of the extant application, Mr Drapac, who appeared for Drapac, conceded that a significant amount of the costs in respect of which the application is made, including legal costs, were incurred in preparation for the hearing of the s.394 application discontinued by Ms Rivers.
Statutory Terms
[19] I now turn to consider whether or not I can be satisfied that Ms Rivers made the application under s.773, vexatiously or without reasonable cause or whether it should have been reasonably apparent to Ms Rivers that the application had no reasonable prospect of success.
[20] In Hamilton James and Bruce Pty Ltd v Michelle Gray 1 the Full Bench of Fair Work Australia considered an application for an order under s.611 of the Act. In that decision the Full Bench referred to consideration of the meaning of the words “without reasonable cause” and “no reasonable prospect of success” where they appeared in the Industrial Relations Act 1998 (Cth) and the Workplace Relations Act 1996 (Cth) and cited the cases of Kanan v Australian Postal and Telecommunications Union,2 Deane v Paper Australia Pty Ltd 3 and Smith v Barwon Region Water Authority.4
[21] The words “without reasonable cause” appeared in s.347(1) of the Industrial Relations Act 1998 in terms which bear acute similarities to those of s.611(1) and 2(a) of the Act. The Full Bench referred to the following extract from the judgement of Wilcox J:
“A proceeding is not to be classed as being launched ‘without reasonable cause’ simply because it fails. As Gibbs J said in R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473, speaking of the Conciliation and Arbitration Act equivalent of s 357 (s 197A):
‘... a party cannot be said to have commenced a proceeding “without reasonable cause”, within the meaning of that section, simply because his argument proves unsuccessful. In the present case the argument presented on behalf of the prosecutor was not unworthy of consideration and it found some support in the two decisions of this court to which I have referred. The fact that those decisions have been distinguished, and that the argument has failed, is no justification for ordering costs in the face of the prohibition contained in s.197A.’
In Standish v University of Tasmania (1989) 28 IR 129 at 139 Lockhart J applied the qualification in ordering costs against an applicant whose case he thought ‘misconceived’, rather than simply unsuccessful. But, as the Full Court pointed out in Thompson v Hodder(1989) 29 IR 339 at 342, ‘there may be cases which could not be described properly as “misconceived” but which would nevertheless be held to have been instituted without reasonable cause’. 5
It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, 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 stigmatise the proceeding as being ‘without reasonable cause’. But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
[22] In respect of the words “no reasonable prospect of success” as they appeared in various parts of the Workplace Relations Act 1996, including s170CJ(1) of that Act, the Full Bench of Fair Work Australia in Hamilton James and Bruce Pty Limited v Michelle Gray referred to the following extract from the decision of the Full Bench of the Australian Industrial Relations Commission in Deane v Paper Australia Pty Ltd:
“[6] We were taken to a number of authorities which were said to bear upon the construction of s.170CJ. None of those authorities deals with the operative expression which now appears in s.170CJ(1)(b), namely: ‘no reasonable prospect of success’.
[7] The expression ‘no reasonable prospect of success' also appears in ss.170CF(2)(d), 170CF(3)(b) and 170CF(4). Section 170CF(4) provides for the summary dismissal of an application for relief pursuant to s.170CE, by the issue of an appropriate certificate, if the Commission concludes that the application has no reasonable prospect of success. The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service. In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that a conclusion that an application had no reasonable prospect of success should only be reached with extreme caution and where the application is manifestly untenable or groundless.
[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, 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.” (Endnote omitted)” 6
[23] Having regard to the above, with due consideration of the differing statutory contexts, it is appropriate to consider each of the conditions precedent to the power to make an order for costs discretely and I will do so in the order in which they occur in s.611.
“Vexatious” - motive - “utterly hopeless”?
[24] For me to be satisfied that the s.773 application was made by Ms Rivers vexatiously I should be satisfied that Ms Rivers was motivated by a desire or intention to harass, annoy or embarrass Drapac or gain some collateral advantage 7 or that the application was so obviously “untenable” or “manifestly groundless” as to be “utterly hopeless”.8
[25] On what is before me, I am unable to be satisfied that Ms Rivers’ motive when making the application under s.773 was anything other than to achieve redress or relief in relation to the termination of her employment, on the ground that Drapac terminated the employment unlawfully, because of Ms Rivers temporary absence from work because of illness, contrary to the provisions of s.772(1)(a). For the Tribunal to arrive at a conclusion that Ms Rivers made the application for other mischievous, malevolent or inappropriate reasons there would need to be demonstrated some relevant facts of motivation or intention, sufficient to allow an inference that Ms Rivers acted in a manner that could be described as vexatious. There is no such evidence.
[26] Moreover, I cannot be satisfied that the application was so “obviously untenable” or “manifestly groundless” as to be “utterly hopeless” at the time it was made. In this respect the factual circumstances surrounding the termination of Ms Rivers' employment are relevant. Additionally, the procedural nature of the application and the relevant statutory context in which the application was made should be considered.
[27] Ms Rivers' employment was terminated during a period of temporary absence from work through illness. Medical certificates proving the illness had been provided to the Drapac in accordance with the prescription and requirements of Regulation 6.04. At the time of the termination of Ms Rivers’ employment the employer made statements in the letter of termination which expressed disbelief in the truth of the illness and the legitimacy of any entitlement to be absent from work. Given these facts and having regard to the presumptive provisions of s.783(1), which form a part of the statutory context in respect of which an application under s.773 is made, it cannot, in my view, be said that the application was manifestly groundless when it was filed.
[28] The provisions of s.783(1) are set out below:
“783 Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of subsection 772(1), it is alleged that a person took, or is taking, action for a particular reason; and
(b) taking that action for that reason would constitute a contravention of subsection 772(1);
it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.”
[29] The facts and circumstances evidenced by the letter of termination referred to immediately above once proved, (and they have not been disputed before me) would discharge the prima facie onus upon Ms Rivers if the application under s.773 had been followed by an unlawful termination court application. Proof of the fact of the termination of the employment and the fact that there was a temporary absence from work through illness within the meaning of the Act and the Regulation, once accepted by a relevant court, would have caused the effect of s.738(1) to be that the Drapac would need to satisfy the court that the temporary absence of Ms Rivers from work through illness formed no part of the reason for termination of Ms Rivers’ employment. Given that these prima facie facts are not disputed, and on what is before me are indisputable, they formed a reasonable ground upon which to make the application at the time it was filed.
[30] Therefore, at the time that the s.773 application was made Ms Rivers’ version of the relevant facts was simple and is set out above. The application was of a narrow compass. The application alleged that in the factual circumstances the Drapac had breached s.772(1)(a). Ms Rivers’ version of the relevant facts constitute at least a prima facie breach of s.772(1)(a) in light of the presumptive provisions of s.783(1) and in these circumstances the application could not be characterised as “utterly hopeless” so as to have been made vexatiously.
“Without reasonable cause”?
[31] For the same reason that I cannot be satisfied that the application was “utterly hopeless” so as to be characterised as vexatious. I cannot be satisfied Ms Rivers version of the facts at the time the s.773 application was filed meant that the application was made “without reasonable cause”. On the contrary, on the facts apparent to Ms Rivers when the s.773 application was made it would have been a matter for Drapac to obtain a finding from a court, that, notwithstanding those facts, the termination of Ms Rivers’ employment was not unlawful. In these circumstances, judged objectively, there was a reasonable cause for making the application.
“No reasonable prospect of success”?
[32] Finally, I must consider whether at the time the s.773 application was made it should have been reasonably apparent to Ms Rivers that the application had no reasonable prospect of success. Given the different textual formulations of “without reasonable cause” and “no reasonable prospect of success” as between subparagraphs (a) and (b) of s.611(2) it must be assumed that there is a distinction between an application which is untenable or groundless when it is made, and one that may have no reasonable prospect of success. Although the concepts seem to merge or at least overlap.
[33] The nature of an application under s.773 of the Act is a relevant consideration. Such an application is a prerequisite to the making of an unlawful termination court application. 9 It will not always follow that a person making an application under s.773 will make an unlawful termination court application. The nature of the application made under s.773 is for the Tribunal to deal with the dispute by way of a conference.10 The Tribunal cannot determine the dispute so as to prevent an unlawful termination court application, determine a remedy in respect of the dispute over the alleged unlawful termination of employment or impose any legal right duty or obligation upon either of the parties to the dispute.
[34] It will have been previously observed that subsequent to the conduct of the conferences conducted by the Tribunal pursuant to s.776 a Statement of Advice was issued pursuant to s.778 of the Act. The Statement of Advice was as follows:
“An application pursuant to s.773 of the Fair Work Act 2009 (the Act) was made by Mr Melanie Rivers alleging she was dismissed by Meaka Pty Ltd T/A Drapac Services Trust in contravention of s.772(1) of the Act.
Fair Work Australia conducted a conference to deal with the dispute on 17 August 2011.
Pursuant to s.778 of the Act, Fair Work Australia advises that an unlawful termination court application in relation to the dispute would not have a reasonable prospect of success.”
[35] Relevantly, that advice arose after Ms Rivers made her application and was issued for particular reasons arising from the facts traversed at the conferences conducted pursuant to s.776 and in light of what Ms Rivers was seeking to resolve the dispute with which the Tribunal was dealing. Ms Rivers was seeking financial compensation. The success of an application before a court of competent jurisdiction which would give rise to an order of financial compensation was addressed in the particular context of the proceedings by that advice.
[36] The facts and consideration of the Tribunal, upon which the advice was based, concerned matters which the Tribunal judged would affect the likelihood of a remedy of the kind sought by Ms Rivers at the conference being awarded by a Court of competent jurisdiction, rather than the likelihood of a finding being made by the Court that a breach of s.772 (1) (a) had occurred. In my judgement, when Ms Rivers made her application under s.773 it would not have been reasonably apparent that the Tribunal would issue such advice for reasons which follow.
[37] The facts and considerations upon which the advice was based concerned certain actions of Ms Rivers during her employment and the likely effect upon the discretion of the Court to award a remedy to Ms Rivers of the kind which she sought, namely financial compensation, in the event that the Drapac was unable to satisfy the Court that the reason for the termination of Ms River’s employment was not in any way comprised of Ms River’s temporary absence from work through illness.
[38] At the time the advice was issued, and similarly after hearing all of the evidence submitted on the hearing of the costs application, I am satisfied that Ms Rivers’ breached the duty of fidelity which is implied in any contract of employment, by utilising the employer’s time and IT system, for purposes unrelated to the employer’s business, the purpose of her employment or the work for which she was engaged to perform and did so for her personal advantage. I am satisfied that Ms Rivers was actively and systematically preparing and developing her personal capacity and competence as a nutritionist during her working time, was using the employer’s IT system for this purpose, was conducting personal development activities in relation to a business she was conducting on weekends to which these activities were directly relevant and useful. Her activities in this respect had nothing to do with the business of Drapac or her employment by Drapac.
[39] In the Tribunal’s view, in light of the material and computer records exhibited, these facts would have been accepted on the civil standard of proof to the satisfaction of a court as one of the reasons for the termination of the employment of Ms Rivers. In the judgment of the Tribunal, if a Court had found that the reasons for the termination of Ms Rivers’ employment was a reason prohibited by s.772(1)(a) it, nevertheless, would not have awarded a pecuniary remedy to Ms Rivers in circumstances where the common law obligation of fidelity in the employment relationship had been breached accordingly. Even if the court had imposed a monetary penalty for a breach of s.772(1)(a), as a deterrent, in the Tribunal’s judgement, in such circumstances the payment of the penalty would most likely have been directed to the public revenue rather than Ms Rivers.
[40] In light of the above, in order to determine whether or not at the time Ms Rivers made the s.773 application it should have been reasonably apparent to Ms Rivers that the application had no reasonable prospect of success it would seem therefore necessary to give consideration to the following:
● The nature of the application
● What would constitute a successful application of the relevant kind
● What would constitute no reasonable prospect of success of such an application
● What should have been reasonably apparent to Ms Rivers at the time the application was made
● The Statement of Advice issued on 17 August 2011 pursuant to s.778 of the Act.
[41] As has already been observed, the nature of an application under s.773 is limited. It is no more than an application for the Tribunal to deal with a dispute over an alleged unlawful termination by holding a conference, making a recommendation or expressing an opinion. These means fall well short of a legally effective determination of the dispute. The application is a mandatory condition for a person contemplating making an unlawful termination court application. It might be said that, at one level, the applicant succeeds by establishing the right to make the unlawful termination court application simply by filing the application and participating in the conference prescribed by s.776.
[42] Ms Rivers cannot be assumed to have apprehended that her dispute would be determined and a remedy awarded as a result of the making of the application under s.773. Conversely, it could not have been reasonably apparent when the application was made that the Tribunal might determine to reject her application or dismiss it. The exercise of such powers could not have been reasonably apprehended as they are non-existent in relation to an application under s.773. Nor is an apprehension by Ms Rivers, when the application was made, that the Drapac would agree to pay her compensation a relevant “prospect of success”.
[43] A reasonable prospect of success in such limited circumstances might be regarded as an agreed settlement or a favourable recommendation by the Tribunal or a favourable opinion about the prospect of success should the Tribunal express either. However, I find consideration of such matters as things which might be reasonably apparent to an applicant under s.773 for the purposes of s.611(2)(b) highly problematic in the relevant statutory context.
[44] The scheme of the General Protections provisions of the Act and the intention of the legislature in providing for the application to the Tribunal and a mandatory conference, as a precursor to an unlawful termination court application, does not require agreed settlement of the dispute, a recommendation or the expression of an opinion by the Tribunal. In the scheme of the Act such outcomes are not prescribed requirements. The purpose of the relevant statutory provisions is to ensure the parties to the dispute participate in a dispute resolution process alternative to litigation in a court of competent jurisdiction before an application to a court may be made. The concept of reasonable prospect of success in an alternative dispute resolution process, in my view, is distinct from what will characterise a reasonable prospect of successful litigation in a court under the relevant provisions of the Act. In my view, when applying s.611(2)(b) the latter is the appropriate meaning to be attributed to the words “no reasonable prospect of success”.
[45] How “no reasonable prospect of success” might be readily apparent when a person who makes an application under s.773, I think, would depend upon the fundamental and elementary nature of the factual matrix upon which such an application is made. If the employee has resigned the employment, for example, such an application would have no reasonable prospect of success. Termination by the employer is a condition precedent to a valid application being made under s.773, by operation of s.773(a). If the employee had genuinely resigned the employment there could be no valid application, no conference and thus no certificate as prescribed by s.777, and therefore no unlawful termination court application as provided by s.779(1) and thus no prospect of success in the relevant sense. In these circumstances, such things could be said to be reasonably apprehensible on the applicant’s own version of the facts at the time when the application is made. Alternatively, if an employee alleging unlawful termination by reasons of temporary absence from work due to illness within the meaning of the Act knows, at the time of making an application under s.773, they are unable to prove the fact of the illness, and/ or that the relevant circumstances were within the meaning of the Fair Work Regulations (the Regulations), 11 that may mean that it might have been reasonably apparent to such a person that nothing might come of a conference conducted pursuant to s.776 and that there would be no reasonable prospect of success of an unlawful termination court application.
[46] The expression “no reasonable prospect of success” is deployed in various costs provisions of the Act. In my view, the relevant prospect of success is a prospect of a favourably adjudicated determination of a matter before Fair Work Australia or, relevantly, for the purposes of s.778, the Federal Magistrates Court or the Federal Court of Australia.
[47] Therefore, at the time the application was made by Ms Rivers, speculation on her part about what the employer might agree to at a conference or what the Tribunal might say or do within the context of its limited facilitative powers to aid the resolution of the dispute does not readily fall for consideration within the meaning of the statutory concept of a reasonably apparent lack of any prospect of success of an unlawful termination court application
[48] Even if I am wrong in this there is another consideration relevant to what might have been reasonably apparent to Ms Rivers at the time the s.773 application was filed. This concerns the issuance of the Statement of Advice of 17 August 2011. The statement of advice was the exercise of a statutory function by the Tribunal, which had not occurred at the time when the application was made. The advice was based upon the Tribunal’s expertise and understanding of the nature of the relevant statutory provisions, the common law of employment, the legal principles relevant to the determination of an unlawful termination court application, the principles which guide the courts in the exercise of a discretion to award a pecuniary remedy to an employee whose employment has been unlawfully terminated and the practice and procedure of the courts in employment matters. It was advice about the prospect of Ms Rivers successfully achieving an order for financial compensation.
[49] The advice does not purport to be infallible nor more importantly did it prevent Ms Rivers from making an unlawful termination court application. Consequently, it is not advice that the application could not be made. The statement is non-determinative, as the relevant statutory language reveals, it is merely advisory. In these circumstances, I am unable to conclude that the issuance of the Statement of Advice, after the time at which the application was filed and after the conferences conducted pursuant to s.766, based upon the exercise of analysis and judgement of a complex matrix of factual and legal considerations going to the likely exercise of a court’s discretion to award a remedy could have been reasonably apparent to Ms Rivers at the time the s.773 application was made.
Discretion
[50] Even if the conclusions I have reached, which are to the effect that the power to make an order for costs does not arise is wrong I would not exercise the discretion to make an order for costs in the particular circumstances of the case for the following reasons.
[51] First, the provisions of s.611(1) establish a general principle that a person must bear their own costs in relation to a matter before the Tribunal. The scheme of the provisions of s.611 then prescribes limited and exceptional circumstances in which the Tribunal is provided with a discretion to make an order for costs. It is highly pertinent to note that the exercise of that discretion is not directed by any statutory provision as to how, when and in what circumstances an order for costs should be made. It follows that there is no presumption within the statutory scheme that costs will be ordered if the discretionary power to do so arises. Consequently, the discretion is at large.
[52] Second, I find it difficult, in light of the statutory predicate that a party is to bear their own costs, to see a good reason to exercise a discretion to award costs in this matter. In this matter much of if not almost all of the costs sought fall into categories which cause me to consider that they should not be ordered. Two categories are legal and other costs in preparation for the discontinued s.394 application and costs said to be associated with the s.773 application. In my view, if costs in relation to the s.394 application were to be ordered such an order would effectively conflict with the requirements of s.402 that an application for costs under s.611, in relation to an application under s.394 must be made within 14 days of a matter being determined or discontinued. Moreover, as already noted, Drapac was not legally or otherwise professionally represented at the conferences conducted in relation to the s.773 application
[53] Third, various costs sought by the application are of a nature which I consider should not be awarded. Those costs are not in the nature of payment for legal advice, preparation for the proceedings and/ or professional representation in relation to the s.773 application and the conferences conducted under s.776. The relevant costs I refer to in this respect are calculations of the economic value of the time devoted largely but not entirely, it would seem, to the s.394 application by Drapac, and another person employed by Mr Drapac investigating various aspects of the employment history of Ms Rivers.
[54] Moreover, it seems to me that the among the costs sought which are not of a legal professional nature are claims for costs in relation to work by Drapac personnel or an external IT service provider incurred prior to the termination of Ms River’s employment and were more probably than not substantially incurred as part of an investigation which lead to the termination of that employment. Such costs, in my view, cannot be characterised as costs incurred as a consequence of the s.773 application.
[55] Fourth, I consider the nature of the s.773 application is a relevant consideration. In my view, given the procedural nature of a conference to be conducted pursuant to s. 776 and the fact that the application does not commence a legal proceeding which could give rise to a determination of rights, duties and obligations there would seem to me to be a serious question of what circumstances would justify a costs order in relation to the filing such an application. Particularly where a party applying for costs has not been legally or otherwise professionally represented in the proceedings. It could be that an application made vexatiously or one which could be deemed manifestly groundless, on an applicant’s own version of the facts might be persuasive of the exercise of the discretion. However, where the prospect of an application made under s.772 is at least arguable I am not convinced that an order to award costs is an appropriate exercise of the discretion in such circumstances. Particularly, having regard to my view of the intention of the legislature in relation to such applications, the non-determinative and procedural nature of the application as a mandatory alternative dispute resolution process to an unlawful termination court application.
Decision
[56] For all of the above reasons and those which follow I determine that I cannot nor would not exercise the discretion to make an order for costs in this matter in relation to the application made under s.773.
[57] My conclusions in respect of whether or not the power to make an order of costs against Ms Rivers arises in relation to the s.773 application are: the application was not made vexatiously; the application was based on an arguable prima facie basis that Ms Rivers’ employment was terminated by Drapac because of a reason or reasons comprised of her temporary absence from work through illness, within the meaning of s.772(1)(a) and Regulation 6.04; at the time the application was made it would not have been reasonably apparent to Ms Rivers that the application for a conference before the Tribunal would have no reasonable prospect of success. At the time the application was made it would not have been reasonably apprehended by Ms Rivers that an unlawful termination court application would have no reasonable prospect of success. It was not until the issuance of the Statement of Advice on 17 August 2011could it have been reasonably apparent to Ms Rivers that she might not be successful in achieving the relief she sought in the event of her filing an unlawful termination court application. Subsequently, Ms Rivers decided not to make an unlawful termination court application.
[58] For the reasons set out immediately above I am not satisfied that the power to make the order sought arises under the provisions of s.611(a) or (b). The application for costs must be dismissed. An order will issue accordingly.
COMMISSIONER
Appearances:
M Drapac appearing for Meaka Pty Ltd T/A Drapac Services Trust
M Rivers appearing for herself
Hearing details:
2012.
Melbourne:
March 20.
1 [2011] FWAFB 9235.
2 [1992] 43 IR 257.
3 PR932454.
4 [2009] AIRCFB 769.
5 [1992] 43 IR 264.
6 2011 [FWAFB] 9235 at PN[20].
7 Nilsen v Loyal Orange Trust IRCA Decision No: 267/97, cited in Harris v Home Theatre Group Pty Ltd T/A Home Theatre Group[2011] FWA 2910 at PN [20].
8 Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491, cited in Harris v Home Theatre Group Pty Ltd T/A Home Theatre Group[2011] FWA 2910 at PN [20].
9 s.779
10 s.776
11 Regulation 6.04.
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