Michael Willis v G&N Strang Holdings Pty Ltd T/A Queensland National Hotel

[2018] FWC 4320

[2018] FWC 4320

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Michael Willis
v
G&N Strang Holdings Pty Ltd T/A Queensland National Hotel
(U2018/2758)

COMMISSIONER BISSETT MELBOURNE, 23 JULY 2018

Application for costs.

[1] On 16 March 2018, Mr Michael Willis made an application to the Fair Work Commission (the Commission) for an unfair dismissal remedy pursuant to s.394 of the Fair Work Act 2009 (the Act) in relation to the termination of his employment by G&N Strang Holdings Pty Ltd T/A Queensland National Hotel (QNH).

[2] On 1 May 2018, a decision 1 and order2 were issued by Deputy President Clancy, dismissing Mr Willis’ application under s.399A of the Act for reason of his failure to comply with directions and his non-attendance at a hearing held by the Commission.

[3] On 15 May 2018, QNH filed an application for costs against Mr Willis. The costs application is made under s.400A of the Act. It is validly made, having been filed within 14 days after the decision and order of Deputy President Clancy. 3

Background

[4] At the time of filing his application for an unfair dismissal remedy, Mr Willis was represented by Mr Atul Dara of the Aboriginal and Torres Strait Islander Legal Service Qld Ltd. Mr Willis had been directed to file material in support of his application by no later than noon on 16 April 2018. As no material was received, contact was made with Mr Dara in the afternoon of 16 April 2018 and the Commission was advised the parties had reached an in-principle settlement agreement.

[5] On 17 April 2018, Mr Dara advised the Commission he had not received a response from QNH regarding the proposal to settle the matter. The Commission noted that it appeared no in-principle agreement had been reached and that the matter may be referred to a non-compliance hearing if no material was received.

[6] On 18 April 2018, the Commission received a Form F54 – Notice of Representative Ceasing to Act from Mr Dara.

[7] On 19 April 2018, the Commission telephoned QNH to advise the matter would be listed for a non-compliance hearing the following day, as Mr Willis had not filed his material. Mr Graham Strang of QNH advised he had a solicitor acting for the company. Shortly after the phone call with Mr Strang, Mr Paul Emmerson of Emmerson Legal telephoned the Commission and advised he had sent a notice of appearance via mail. Mr Emmerson was asked to email the Notice of Representative Commencing to Act so his firm may be added to the file. Mr Emmerson was then advised the matter would be listed for a non-compliance hearing the following day. The Notice of Representative Commencing to Act was received by the Commission by email at 11.30am on 19 April 2018. A few minutes later, a copy of the email was forwarded by the Commission to Mr Willis for his information.

[8] At the non-compliance hearing on 20 April 2018, Mr Strang and Mr Emmerson appeared. Mr Willis could not be contacted. Correspondence was then sent to Mr Willis, directing him to file submissions and other documentary material in respect of the s.399A application by no later than close of business on 27 April 2018. Mr Willis did not file any material and his unfair dismissal application was dismissed by Deputy President Clancy on 1 May 2018.

Costs application

[9] The Commission received the costs application on 15 May 2018. It was subsequently confirmed by Mr Emmerson that his firm had served a copy of the costs application on Mr Willis.

[10] On 28 May 2018, directions were issued to the parties for the filing of material. QNH was directed to file any submissions, witness statements or other material upon which it relied by 5.00pm on 8 June 2018. Mr Willis was directed to file his material in reply by 5.00pm on 22 June 2018.

[11] QNH filed its material in accordance with the directions.

[12] As no material was received from Mr Willis, an attempt to telephone him was made on 25 June 2018, however there was no answer and no opportunity to leave a voicemail message.

[13] On 26 June 2018, two further attempts to telephone Mr Willis were made which were also unsuccessful. An email was also sent to Mr Willis requesting he advise the status of his material. Mr Willis was advised if an extension to file was sought, he should outline his reasons and the timeframe required.

[14] On 27 June 2018, another attempt to telephone Mr Willis was made where there was no answer. Further email correspondence was then sent to him, which advised if the Commission did not receive material in response to the costs application made against him by 4.00pm on Thursday 28 June 2018, the matter would be determined on the basis of the material filed. Mr Willis did not respond to the Commission’s correspondence.

QNH’s submissions

[15] Emmerson Legal submitted the following:

•  Mr Willis “had no basis whatsoever for making his claim”.

•  QNH “accrued costs to obtain legal, prepare and file an expense to” (sic) Mr Willis’ application.

•  Mr Strang of QNH “spoke with the Registrar on a number of occasions to ensure that he was following due process, and in accordance with directions”.

•  Mr Strang of QNH “attempted to deal with the matter himself and realised he needed to engage professional advice”.

•  Mr Willis was initially represented.

•  Pursuant to the Notice of Listing issued on 28 March 2018, Mr Willis was directed to file and serve his material by 16 April 2018, which he failed to do. Mr Strang submitted his account of the events and obtained statements from his witnesses.

•  Mr Willis’ solicitor withdrew on 18 April 2018.

•  The Commission listed the matter for a non-compliance hearing by telephone on 20 April 2018. Mr Willis failed to appear and was given seven days to respond and provide reasons, failing which his application would be dismissed.

•  Mr Willis failed to respond or provide reasons as required and his application was dismissed.

•  QNH incurred legal costs (see below) to respond to Mr Willis’ application.

•  On 11 April 2018, QNH submitted a without prejudice offer of settlement to Mr Willis of three weeks’ pay, which Mr Willis failed to accept on the terms submitted.

•  Mr Willis’ “outcome was by then the offer made by” QNH to him.

•  QNH has incurred costs (see below) and further costs of $466.00 “to collect advice, file and respond to his application for costs and claims there from” (sic) Mr Willis.

[16] The Tax Invoice annexed to the submissions provided as follows:

Professional Fees

Date	Description	Amount	GST
11/4/2018	Attendance on Graham Strang	$360.00	$36.00
11/4/2018	Attending to opening file	$0.00	$0.00
11/4/2018	Attendance on Graham Strang	$396.00	$39.60
16/4/2018	Telephone to Graham	$72.00	$7.20
19/4/2018	Prepare and file notice of appearance	$108.00	$10.80
19/4/2018	Telephone to Fair Work Commission	$36.00	$3.60
20/4/2018	Attendance on Fair Work mention	$144.00	$14.40
20/4/2018	Perusing letter from FWC	$36.00	$3.60
30/4/2018	Review no further details from Applicant	$36.00	$3.60
30/4/2018	Telephone to Graham Strang	$36.00	$3.60
30/4/2018	Peruse final notices from FWC	$72.00	$7.20
$1,296.00	$129.60

Disbursements

Date	Description	Amount	GST
3/5/2018	Sundries: Postages, Photo copying and phone calls	$30.00	$3.00
$30.00	$3.00

Amount	GST	- Payments Received	= Balance Due
$1,326.00	$132.60	$0.00	$1,458.60

Consideration – s.400A

[17] Section 400A of the Act provides:

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.

[18] Section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Amendment Bill 2012 states:

Parts 3 and 4 of Schedule 6 to the Bill enhance the FWC’s ability to order costs against a party and/or their representative in unfair dismissal matters. The new ‘party costs’ provision applies where a party to an unfair dismissal matter (either an employee or employer) has caused the other party to incur costs by an unreasonable act or omission. Under section 401 of the FW Act, lawyers and paid agents may currently be exposed to costs orders if FWA has granted permission for a person to be represented in an unfair dismissal matter. The Bill will provide for the FWC to order costs against a lawyer or paid agent whether or not the FWC has given permission for a person to be represented.

The amendments strike a balance between the need to protect workers from unfair dismissal, and to provide a deterrent against unreasonable conduct during proceedings. The amendments will enable costs orders to be more easily made in the case of unreasonable conduct but will not prevent genuine claims from being pursued. They will discourage frivolous and speculative claims and assist in the efficient resolution of claims by encouraging all parties to approach proceedings in a reasonable manner. These measures are reasonable and proportionate to address the time and expense that an unreasonable conduct by a participant and/or their representative may cause another party to incur. 4

and

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.

[19] The Full Bench of the Commission said in Gugiatti v SolarisCare Foundation Ltd 5(Gugiatti), 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.”6

[20] The Full Bench also stated:

Section 400A(1) establishes two pre-conditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened. 7

[21] Section 400A of the Act provides that costs may be awarded to QNH if I am satisfied that the costs it claims were incurred as a result of an unreasonable act or omission of Mr Willis, in connection with the conduct or continuation of the unfair dismissal application. However, even if I am satisfied that the relevant circumstances exist, I am not obliged to order costs. It is a discretionary decision. The legislative intent behind s.400A was that the power to award costs is to be exercised only in clear cases of unreasonable conduct.

[22] I would observe that, prior to gaining legal representation, the conduct of Mr Strang and his communications with Commission staff was particularly unhelpful. He appeared to take it as an affront that Mr Willis should make an unfair dismissal application. He at no stage filed a Form F3 - Employer Response to Unfair Dismissal Application as requested by the Commission on 20 March 2018. Further, having gained legal representation, apparently on 11 April 2018, no advice of this was provided to the Commission or formally to Mr Willis or his representative until a week later on 19 April 2018.

[23] Up until at least the date he was required to file his material on 16 April 2018, it is difficult to understand what the unreasonable act or omission of Mr Willis might be such that an application for costs could be considered. By this stage, Mr Willis had made his application which, on its face, was not devoid of merit. A perusal of the Commission file suggests that the substantial number of other activities on the file up until the non-compliance hearing and following the receipt and administration associated with the application itself, involved correspondence from Mr Strang.

[24] On 18 April 2018, the Commission received notice that Mr Willis’ representative had ceased acting for him. Despite a conversation with Mr Willis’ representative just prior to receipt of this notice, Mr Willis did not seek an extension of time within which to file his submissions and evidence. At the non-compliance hearing Emmerson Legal made an application that the unfair dismissal application of Mr Willis be dismissed because he had failed to comply with directions of the Commission to file his submissions and evidence as required by 16 April 2018. Mr Willis failed to attend the non-compliance hearing.

[25] I am satisfied that in not filing his submissions and evidence by 16 April 2018, not attending the non-compliance hearing and not responding to the Commission’s correspondence with respect to the s.399A application of QNH, that these were unreasonable acts on the part of Mr Willis. He made an unfair dismissal application. He must have understood that in doing so, he would start a process in which he would need to be engaged. Had he wished to end that process, he could easily have done so by filing a Notice of Discontinuance with the Commission or sending an email to this effect. He did not do so. It was unreasonable of him not to have done so.

[26] Whether costs incurred by QNH after 16 April 2018 are attributable to these unreasonable acts of Mr Willis is, however, a separate question.

[27] Had Mr Willis filed his submissions and evidence as required by 16 April 2018 a non-compliance hearing would not have been required. It is therefore reasonable to attribute the cost of attendance at the non-compliance hearing ($144.00 + GST) to the unreasonable act of Mr Willis.

[28] Some of the costs sought by QNH appear to arise directly from the engagement of a lawyer. This occurred prior to the unreasonable acts of Mr Willis identified above. I do not consider any costs incurred prior to 19 April 2018 were costs incurred because of Mr Willis’ unreasonable acts. I also do not consider the filing of a “notice of appearance” as being caused by Mr Willis’ actions. I am however satisfied that the cost ($36.00 + GST) of the QNH legal representative telephoning the Commission on 19 April 2018 was caused by Mr Willis’ actions.

[29] Regardless of how a matter might conclude, short of a hearing and formal decision on a jurisdiction or merits basis and in circumstances where an applicant does not file a Notice of Discontinuance, there are steps the Commission must take in the interest of sound administration to bring a matter to closure. This is through either an application from a respondent under s.399A of the Act that the application be dismissed (as occurred in this case) or a consideration by the Commission of a dismissal of the application pursuant to s.587 of the Act on the grounds that the application has no reasonable prospect of success. In either case, procedural fairness can only be served by correspondence to the applicant and the respondent, giving each an opportunity to make whatever submissions are necessary so that these may be considered by the decision maker.

[30] Whilst I accept that there are costs for a respondent in such a process, QNH were advised at the non-compliance hearing that the Commission would write to Mr Willis and seek submissions from him and only if such submissions were received would QNH be asked to take any action. Without submissions from Mr Willis, in all likelihood his application would be dismissed. This is what occurred. No burden was put on QNH. The correspondence sent to it was what was advised would be sent. Eleven days later, it received the decision of the Commission dismissing the application. I do not consider that the unreasonable acts of Mr Willis caused costs to be incurred by QNH following the non-compliance hearing. There was nothing to be done. A straight forward decision of three pages was issued by the Commission. The second last sentence said that Mr Willis’ application was dismissed.

Conclusion

[31] Having found that an unreasonable act of Mr Willis did cause QNH to incur some costs, it is a matter of discretion as to whether I should award those costs. In this case, I have determined not to do so.

[32] I have taken into account that parties to matters before the Commission should generally meet their own costs and that the amount in dispute as set out above that I consider attributable to the actions of Mr Willis is relatively small ($180.00 + GST).

[33] In these circumstances, I do not consider that I should exercise my discretion and grant costs. The application of QNH is dismissed.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR609214>

 1   [2018] FWC 2425.

 2   PR606708.

 3   Fair Work Act 2009 (Cth), s 402.

 4   Explanatory Memorandum to the Fair Work Amendment Bill 2012, page 7.

 5   [2016] FWCFB 2478.

 6 Ibid at [61].

 7 Ibid at [43].