Melissa Crowe v Mg Medical Group Pty Ltd T/A Australian Eye Care
[2018] FWC 2439
•23 MAY 2018
| [2018] FWC 2439 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Melissa Crowe
v
MG Medical Group Pty Ltd T/A Australian Eye Care
(U2017/13190)
DEPUTY PRESIDENT DEAN | SYDNEY, 23 MAY 2018 |
Application for an unfair dismissal remedy – application for Costs
[1] On 23 February 2018, I issued a decision with respect to an application made by Ms Crowe for unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act). In that decision I was not satisfied that Ms Crowe had shown exceptional circumstances as to warrant my granting an exception to the statutory time limit for the lodgement of her unfair dismissal application. I dismissed her application. 1
[2] On 9 March 2018, MG Medical Group Pty Ltd T/A Australian Eye Care (MG) made an application pursuant to s.611 and s.400A of the Act for costs against Ms Crowe. On 14 March 2018 directions were issued for the parties to file written submissions and to advise their views on whether a hearing should be held or the costs application determined ‘on the papers’. MG submitted that the costs application should be determined ‘on the papers’, while Ms Crowe requested the matter be listed for hearing.
[3] The matter was listed for hearing by telephone on 4 May 2018. At the hearing Ms Crowe appeared on her own behalf. Permission was granted, pursuant to s.596 of the Act, to Ms H Carter, solicitor, to appear on behalf of MG.
[4] For the reasons set out below, I find that there is no clear evidence of conduct by Ms Crowe that in my view could reasonably be considered (a) an unreasonable act or omission of the type contemplated by s.400A of the Act, or (b) evidence of the conduct required by s.611 of the Act. Accordingly, MG’s application for costs is dismissed.
Relevant legislation
[5] MG’s application for costs is made under ss.400A and 611 of the Act.
[6] Section 400A of the Act provides as follows:
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.”
[7] The Explanatory Memorandum to the Fair Work Bill 2012 provides the following with respect to s.400A of the Act:
“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.
169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.
171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”
[8] Section 611 of the Act provides as follows:
“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.”
[9] In respect of s.611 of the Act, the Explanatory Memorandum to the Fair Work Bill 2008 states:
“2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.”
Background
[10] On 2 November 2017 Ms Crowe filed a general protections application pursuant to s.365 of the Act. That application was made within the required time frame.
[11] A conference was conducted by a Fair Work Commission Conciliator on 1 December 2017. No agreement was reached at the conference and Ms Crowe was given time to seek legal advice and investigate her options further.
[12] Having formed the view that her general protections application was not a suitable vehicle for her to pursue a dispute against the respondent, Ms Crowe withdrew the application on 12 December 2017. She then filed an unfair dismissal application against MG on the same day.
[13] The matter was listed for hearing on 16 February 2018 to determine whether Ms Crowe should be granted an extension of time pursuant to s.394(3) of the Act to make her application. The hearing took place by telephone.
[14] At the hearing on 16 February 2018, Ms Crowe relied on her lack of legal education and understanding in the area as a reason for the delay. She said that she had sought legal advice but was “somewhat overwhelmed and misinterpreted her rights and the actions she should take.” She further stated that she “could not afford a lawyer to represent her legal rights under General Protections”.
[15] MG submitted that the matters raised by Ms Crowe as the reasons for the delay were not ‘exceptional circumstances’. In particular:
a) ignorance of the law or legal rights is not an exceptional circumstance;
b) making a decision to file the wrong type of application is not an exceptional circumstance;
c) lack of funds to pay for legal advice has repeatedly been held not to be an exceptional circumstance.
[16] I found that Ms Crowe’s circumstances were not exceptional and dismissed the application.
Submissions
[17] MG submitted that the application was made vexatiously. It is further submitted that Ms Crowe had a personal vendetta against MG that had been evident from as early as October 2017 in the lead up to her termination. MG submitted that Ms Crowe at no point articulated the grounds she asserted her termination was harsh, unreasonable and unjust, and had instead provided copious amounts of inaccurate material about Dr Goodrich’s personal affairs and work practices to embarrass MG.
[18] MG further submitted that Ms Crowe caused cost to be incurred due to an unreasonable act or omission in connection with the conduct or continuation of the matter. It submitted that it ought to have been apparent to Ms Crowe that the application had no reasonable prospects of success in light of the outcome of the general protections application. Further, through the written response and the conciliation process for the general protections application, it should have been more than reasonably apparent that an unfair dismissal application would equally have no reasonable prospect of success.
[19] In reply, Ms Crowe submitted that during the general protections conciliation the Conciliator advised her to seek further legal advice regarding her general protections application, and that if she were to withdraw that application in order to lodge an application for unfair dismissal she should do so quickly, as time was an important factor.
[20] Ms Crowe denied that the application was vexatious. She asserted that she did not intend to harass, annoy or embarrass MG, she merely attached the information to her application that highlighted the merits for her extension of time application.
[21] Ms Crowe submitted that she had every reason to believe she would be successful in her application for an extension of time, but lacked the necessary legal knowledge to fully articulate the grounds necessary to convince the Commission. Ms Crowe claimed that she would be severely prejudiced by any costs order made against her.
Consideration
[22] Section 611(1) of the Act makes it clear that parties in proceedings before the Commission must bear their own costs. The Act provides exceptions where the Commission may order costs against a party if it is satisfied that circumstances specified in s.611(2) exist. Even if this section is enlivened, the Commission retains a discretion as to whether or not to award costs. The power to award costs should be exercised with caution and only in a clear case.2
Section 400A
[23] The power under s.400A to award costs can only be exercised if there is clear evidence that a party acted unreasonably in the conduct or continuation of a matter and is not intended to prevent a party from robustly pursuing or defending an unfair dismissal application. The Explanatory Memorandum supports this view.
[24] As the Full Bench said in Gugiatti v SolarisCare Foundation Ltd 3, s.400A “is concerned with unreasonable acts or omissions in connection with the ‘conduct or continuation’ of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.”4 It was further held by the Full Bench in in Hansen v Calvary Health Care Adelaide Ltd5that s.400A “is designed to provide the Commission with a discretionary power to award costs against a small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner.”
[25] Having considered the circumstances of this matter, I am unable to conclude that Ms Crowe acted unreasonably in the conduct or continuation of her application. Ms Crowe clearly held the view, rightly or wrongly, that she had reasonable grounds for her unfair dismissal claim and that she would be granted an extension of time for her late lodgment. I find that Ms Crowe did not pursue her claim in an unreasonable manner or engaged in any unreasonable act or omission.
Section 611
[26] In Keep v Performance Automobiles Pty Ltd 6 a Full Bench of the Commission considered the approach to be taken to an application for costs made pursuant to s.611 of the Act and held:
“[16] The FWC’s power to order that a person bear some or all of the costs of another person in relation to an application is only enlivened if the FWC is satisfied as to the matters set out in either s.611(2)(a) or s.611(2)(b).
[17] 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. 7
(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’.
[18] 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.
[19] 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.’” (citations omitted)
Vexatiously or without reasonable cause - s.611(2)(a)
[27] In Church 7the Full Bench considered the meaning of the expression ‘vexatiously or without reasonable cause” contemplated in s.611(2)(a) and said:
“[29] The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose .... is to harass or embarrass the other party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar observation in Hamilton v Oades in which they said:
‘The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment.’” (citations omitted)
[28] In the present case, I am not satisfied that Ms Crowe made her unfair dismissal application vexatiously or without reasonable cause. There is insufficient evidence that the predominant purpose of Ms Crowe commencing these proceedings was to harass or embarrass MG, or to gain a collateral advantage.
No reasonable prospect of success - s. 611(2)(b)
[29] As to the question of whether it should have been reasonably apparent that the application had no reasonable prospects of success, the Full Bench in Baker v Salva Resources Pty Ltd8 said:
‘[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:
“should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”9 (citations omitted)
[30] On the material before me, I am not persuaded that, when viewed objectively, Ms Crowe made her application in circumstances where it should have been reasonably apparent to her that the application had no reasonable prospect of success. Nor can I conclude that the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.
Conclusion
[31] In all of the circumstances, I find that this is not a case where I should exercise my discretion to award costs. Accordingly, MG’s application for costs is dismissed.
DEPUTY PRESIDENT
Appearances:
H Carter, solicitor for the costs applicant.
M Crowe on her own behalf.
Hearing details:
2018.
Sydney (By telephone):
May 4.
Printed by authority of the Commonwealth Government Printer
<PR606731>
1 [2018] FWC 1016
2 See [2014] FWCFB 810 at [27].
3 [2016] FWCFB 2478.
4 Ibid at [61].
5 [2016] FWCFB 8162.
6 [2015] FWCFB 1956
7 [2014] FWCFB 810.
8 [2011] FWAFB 4014.
9 Ibid at [10].
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