Mercato Enterprises Pty Ltd T/A Mercato e Cucina v Ms Te Hiumamaeroa (TJ) Joseph
[2016] FWCFB 8112
•18 NOVEMBER 2016
| [2016] FWCFB 8112 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Ms Te Hiumamaeroa (TJ) Joseph
(C2016/4874)
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 18 NOVEMBER 2016 |
Application for costs of appeal – application dismissed.
[1] Ms Joseph made an unfair dismissal application against her former employer, Mercato Enterprises Pty Ltd T/A Mercato e Cucina (Mercato). On 25 July 2016, Commissioner Cambridge found that Ms Joseph’s dismissal was unfair and awarded her compensation in lieu of reinstatement. 1 On 12 August 2016, Mercato filed a Notice of Appeal against Commissioner Cambridge’s decision.
[2] At the hearing of Mercato’s permission to appeal application on 6 September 2016, we refused permission to appeal and made orders on the same day. 2 We published our reasons for refusing permission to appeal in our decision dated 8 November 2016 (Appeal Decision3).
[3] On 13 September 2016, Ms Joseph made an application against Mercato for a costs order in relation to the appeal proceedings. The costs application is made pursuant to ss.400A and 611(2) of the Fair Work Act 2009 (Cth) (the Act).
[4] Ms Joseph’s costs application has been made within the 14 day period prescribed by s.402 of the Act.
Principles applicable to application for costs
[5] Section 611(1) of the Act establishes a general rule that parties in proceedings before the Fair Work Commission (the Commission) must bear their own costs. There are a number of provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Sections 611(2) and 400A of the Act are two such exceptions.
[6] Section 400A of the Act provides as follows:
“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] Section 400A of the Act applies to an appeal against a decision in relation to an unfair dismissal application. 4
[8] Section 400A(1) of the Act establishes two preconditions for the making of an order for costs:
(a) First, the Commission must be satisfied that the party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and
(b) Secondly, such act or omission caused the other party to the matter to incur costs.
[9] If these two preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.
[10] Section 611(2) of the Act provides as follows:
“(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.”
[11] The relevant principles concerning the interpretation and application of s.611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 5and may be summarised as follows:
- An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
- An application is not made without reasonable cause simply because the application did not succeed.
- Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether 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 characterise the application as having been made without reasonable cause.
- In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there was not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.
- An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, or manifestly groundless, or discloses a case where the tribunal is satisfied cannot succeed.
[12] In relation to s.611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 6as follows (footnotes omitted):
- ‘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.”
“[10] The concepts within s.611(2)(b) ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ have been well traversed:
Submissions
[13] Ms Joseph is seeking a costs order in the sum of $4,259.09 for “the Respondent to bear all of the costs of the Applicant in relation to the Respondent’s Stay of Application, and Appeal on the decision and Order of Commissioner Cambridge made on 25 July 2016”. 7
[14] Ms Nasser of Rochforts Workplace Solutions filed, on behalf of Ms Joseph, written submissions dated 20 October 2016 in support of her application for costs. The submissions filed on behalf of Ms Joseph may be summarised as follows:
(a) the costs order sought by Ms Joseph is to compensate her for costs unnecessarily incurred to obtain justice, because of the unreasonable actions of Mercato in connection with Mercato’s conduct and continuation of the matter (s.400A of the Act);
(b) the actions of Mercato to pursue this matter have been frivolous, vexatious and without reasonable cause (s.611(2)(a) of the Act);
(c) it should have been reasonably apparent to Mercato, particularly as Mr Marando has legal qualifications, that the application for a stay of Commissioner Cambridge’s decision and order had no reasonable prospects of success (s.611(2)(b) of the Act);
(d) Mr Marando has failed to properly participate in proceedings;
(e) Mr Marando has, “from the time of conciliation to the current day, built on his continuous disregard of the processes which govern our legal system”;
(f) Mr Marando has inconvenienced Ms Joseph and caused her to waste time and incur costs by:
(i) submitting an “incomplete and unsigned Notice of Appeal dated 12 August 2016 with errors”;
(ii) breaching the undertaking given to Senior Deputy President Drake at the hearing of the application for a stay on 19 August 2016;
(iii) submitting an out of time and incomplete Appeal Book dated 19 August 2016, without requesting an extension of time;
(iv) submitting an incomplete and unsigned “Notice of Representative Commencing to Act dated 1 September 2016 with errors”; and
(v) submitting an incomplete and unsigned “Amended Notice to Appeal dated 1 September 2016 with errors”.
[15] Mercato has not filed any submissions in relation to Ms Joseph’s application for costs.
Determination of costs application pursuant to s.611(2)
[16] There is no basis for us to find that Mercato’s predominant motive or purpose in making and pursuing its appeal against Ms Joseph was to harass or embarrass Ms Joseph or to gain a collateral advantage. Based on the submissions made by counsel for Mercato during the appeal proceedings, we are satisfied that Mercato was genuinely aggrieved by the finding that it was Ms Joseph’s employer and the decision to award Ms Joseph compensation. In our view, Mercato has made and pursued its appeal in a genuine attempt to overturn the decision at first instance. Accordingly, we reject the contention under s.611(2)(a) of the Act that the appeal proceeding was instituted by Mercato vexatiously.
[17] Ms Joseph contends that she is entitled to costs under s.611(2)(a) of the Act because, amongst other reasons, Mercato’s actions in pursuing “this matter have been frivolous”. However, frivolous conduct is not a ground for a costs order under s.611(2)(a) of the Act. That section confers on the Commission a discretion to award costs if an application is made, or a person responds to an application, vexatiously or without reasonable cause. In any event, we have not identified any frivolous conduct on Mercato’s part in connection with the appeal. Accordingly, we reject Ms Joseph’s application for costs insofar as it relies on alleged frivolous conduct.
[18] As to Ms Joseph’s contention that Mercato’s action in pursuing this matter was without reasonable cause, no basis has been provided for that contention. In addition, although we concluded that there was not an arguable case of error in relation to the decision at first instance 8, we are not satisfied that the appeal was so obviously untenable that it could not possibly succeed, nor was it manifestly groundless.
[19] We reject Ms Joseph’s contention that it should have been reasonably apparent to Mercato that its application for a stay had no reasonable prospects of success. Senior Deputy President Drake made the stay order on the basis of an agreement reached between the parties at the hearing of the stay application. 9 If Mercato’s application for a stay had no reasonable prospects of success, no stay order would have been made and Ms Joseph would not have entered into an agreement with Mercato as the basis for the stay order.
Determination of costs application pursuant to s.400A(1)
[20] To the extent that Ms Joseph’s application for costs under s.400A(1) relies on the merits, or lack thereof, in grounds of appeal advanced by Mercato, we reject those arguments. Section 400A of the Act 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. 10
[21] We reject Ms Joseph’s contention that costs in connection with the appeal should be ordered on the basis that Mercato (or Mr Marando) failed to properly participate in the proceedings or “disregard[ed] the processes which govern our legal system”. Mercato (and Mr Marando) did properly participate in the application for a stay and the appeal against Commissioner Cambridge’s decision. The failure to properly participate in proceedings related to the conduct of Mercato and Mr Marando in connection with the matter at first instance. Any such failure cannot provide a proper foundation for an order for costs in connection with the appeal proceedings.
[22] As to the alleged acts and omissions set out in paragraph [14(f)] above, we are not satisfied that any of them were unreasonable acts or omissions that caused Ms Joseph to incur costs. For example, the fact that during the appeal proceedings Mercato initially filed a number of unsigned documents which were, in part, incomplete and contained some errors were not unreasonable acts or omissions within the meaning of s.400A(1) of the Act. Further, Ms Joseph contends that Mercato breached the undertaking it gave to Senior Deputy President Drake on 19 August 2016, but no evidence has been adduced in relation to that matter. All we have is a submission made on behalf of Ms Joseph in which it is contended that Mercato “breached this undertaking, which was later fulfilled on 1 September 2016”. 11 The undertaking given to Senior Deputy President Drake on 19 August 2016 required money to be paid into an account in the name of Rochfort Associates Pty Ltd “within seven working days”, which was 30 August 2016. On the basis of Ms Joseph’s submissions, the payment was made on 1 September 2016, two days late. Ms Joseph accepts that those monies were paid to her on 12 September 201612, six days after we dismissed the application for permission to appeal. In circumstances where no evidence has been adduced in relation to this issue and we do not know why the payment may have been two days late, we are not satisfied that there was any unreasonable act or omission on Mercato’s part in connection with this issue that caused Ms Joseph to incur costs.
Conclusion
[23] We are not satisfied under s.611(2)(a) of the Act that Mercato made its appeal vexatiously or without reasonable cause, nor are we satisfied under s.611(2)(b) that it should have been reasonably apparent to Mercato that its application for a stay or its appeal had no reasonable prospect of success. Further, we are not satisfied that Mercato caused Ms Joseph to incur any costs because of any unreasonable acts or omissions in connection with the conduct or continuation of the appeal (s.400A of the Act). Accordingly, we dismiss Ms Joseph’s application for costs in connection with the appeal.
SENIOR DEPUTY PRESIDENT
1 [2016] FWC 5004
2 PR585071
3 [2016] FWCFB 5094
4 Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 at [32]-[41]
5 [2014] FWCFB 810 at [23]-[33]
6 [2011] FWAFB 4014; (2011) IR 174
7 Ms Joseph’s Application for Costs at [2.2(2)]
8 Appeal Decision at [13]
9 PR584460, PR585071, and PN 57 – PN 72 of the transcript from the hearing of the stay application on 19 August 2016.
10 Gugiatti v SolarisCare Foundation Ltd[2016] FWCFB 2478 at [61(1)]
11 Ms Joseph’s written submissions at [12]
12 Ms Joseph’s written submissions at [13]
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