Miller v Executive Edge Travel and Events Pty Ltd (No.2)
[2014] FCCA 2271
•8 October 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MILLER v EXECUTIVE EDGE TRAVEL & EVENTS PTY LTD (No.2) | [2014] FCCA 2271 |
| Catchwords: INDUSTRIAL LAW – Application for costs by respondent following dismissal of adverse action application – whether unreasonable act or omission by applicant. |
| Legislation: Fair Work Act 2009 (Cth), ss.570, 570(2)(b) |
| Cases Cited: Miller v Executive Edge Travel & Events Pty Ltd [2014] FCCA 1895 Khiani v Bureau of Statistics [2011] FCAFC 109 Rentuza v Westside Auto Wholesale [2009] FMCA 1022 Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574 Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879 Cugura v Frankston City Council [2012] FCA 1299 |
| Applicant: | SNEZANA MILLER |
| Respondent: | EXECUTIVE EDGE TRAVEL & EVENTS PTY LTD |
| File Number: | MLG 1868 of 2013 |
| Judgment of: | Judge O’Sullivan |
| Hearing date: | On the papers |
| Date of Last Submission: | 25 September 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 8 October 2014 |
REPRESENTATION
| The Applicant: | In person |
| Counsel for the Respondent: | Mr Champion |
| Solicitor for the Respondent: | Holding Redlich |
ORDERS
There be no order for costs.
The proceedings be removed from the Pending Cases List.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1868 of 2013
| SNEZANA MILLER |
Applicant
And
| EXECUTIVE EDGE TRAVEL & EVENTS PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
On 8 September 2014 the Court made orders for the reasons set out in Miller v Executive Edge Travel & Events Pty Ltd [2014] FCCA 1895 (“the substantive judgment”) dismissing an application filed by Snezana Miller (“the applicant”) on 4 November 2013.
The background to the proceedings is set out in the substantive judgment and for the purposes of these reasons it is unnecessary to repeat it. For the reasons set out in the substantive judgment the following orders were made:
“THE COURT ORDERS THAT:
1.The application filed on 4 November 2013 be dismissed.
2.The respondent file and serve any application for costs, affidavits and written submissions within 14 days.
3.The applicant may file and serve any response, affidavits and written submissions in rely 14 days thereafter.
AND THE COURT NOTES:
A.Any application for costs will be determined on the papers unless otherwise requested in submissions.”
Following the orders made for the reasons set out in the substantive judgment, Executive Edge Travel & Events Pty Ltd (“the respondent”) has now sought an order for costs. This decision concerns whether the applicant should pay the respondent’s costs.
The respondent’s application for costs falls to be determined by reference to the provisions of s.570 of the Fair Work Act 2009 (Cth) (“the FW Act”) which provides:
“(1)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) exercising jurisdiction under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
(2)The party may be ordered to pay the costs only if:
(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
…”
The effect of s.570 is to limit the Court’s power in relation to any order for costs in respect of proceedings relating to matters arising under the FW Act. As a result the Court may only order a party to such proceedings to pay the costs of another party only if the Court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or that the party’s unreasonable act or omission caused the other party to incur costs.
Submissions
On 15 September 2014 the respondent filed submissions and an affidavit of its solicitor Mr McIver sworn on 8 September 2014.
The respondent relied upon this material in support of its application for costs. In Mr McIver’s affidavit he deposed:
“4.On about 17 October 2013, I was informed by Ms Starkey that the respondent made a without prejudice offer to solicitors who previously represented the applicant prior to a general protections conference held in October 2013. Now produced and shown to me and marked “Annexure A” is a true copy of the respondent’s without prejudice letter to St Kilda Legal Service Co-op Limited dated 10 October 2013.
5.On 8 May 2014, Holding Redlich wrote to the applicant and made, on behalf of the respondent, an offer of $5,500 to discontinue the proceeding. Now produced and shown to me and marked “Annexure B” is a true copy of Holding Redlich’s without prejudice letter dated 8 May 2014.
6.By email dated 9 May 2014, the applicant rejected the respondent’s offer. Now produced and shown to me and marked “Annexure C” is a true copy of the applicant’s email.
7.On 23 July 2014, Holding Redlich wrote to the applicant and made, on behalf of the respondent, an offer of $11,000 to discontinue the proceeding. Now produced and shown to me and marked “Annexure D” is a true copy of Holding Redlich’s without prejudice letter dated 23 July 2014. The applicant did not communicate her acceptance of the offer.”
In each of the annexures A-D to Mr McIver’s affidavit there was there exhibited time limited and conditional without prejudice offers that Mr McIver deposed had been made by the respondent to the applicant.
In its submissions the respondent’s position was:
“Application
1.The applicant’s application was dismissed on 8 September 2014. Pursuant to paragraph 2 of his Honour Judge O’Sullivan’s orders, the respondent makes an application for its costs. The respondent relies upon its submissions below and an affidavit of Michael Joseph McIver affirmed on 8 September 2014.
Respondent’s submissions on costs
2.Pursuant to section 570 of the FW Act costs are only to be awarded in prescribed circumstances. That is, prima facie section 570 imposes a costs embargo. Section 570(2) prescribes circumstances in which the Court may order costs. It is as follows:
“(2) The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or
(c) the court is satisfied of both of the following
(i)the party unreasonably refused to participate in a matter before the FWC;
(ii)the matter arose from the same facts as the proceedings.” (Emphasis added)
3.The Respondent relies upon section 570(2)(b).
The Respondent submits that it was caused to incur costs because, on 2 occasions (8 May 2014 and, alternatively,
23 July 2014) the Applicant did not accept reasonable settlement offers. The failure of the Applicant to accept such offers constituted an “unreasonable omission” within the meaning of section 570(2).
4.The Respondent asks the Court to “set the amount of the costs” [Rule 21.02(2)(a)] from 8 May 2014 in accordance with Schedule1
5.In McDonald v Parnell Laboratories (Aust) (No 2) [2007] FCA 2086; (2007) 164 FCR 591, a case that dealt with the payment of costs under s 824 of the former Workplace Relations Act 1996 (Cth) Buchanan J considered that costs could be awarded against a party for refusing a reasonable offer of settlement, on the basis it constituted “an unreasonable actor omission, [which] caused another party to the proceeding to incur costs in connection with the proceeding”. (at [31])
6.In this case, the failure to accept the settlement offers was unreasonable for the following reasons.
By 8 May 2014 (the date of the offer) there was very substantial material that Ms. Miller was dismissed for performance reasons
7.First, as at 8 May 2014, Ms. Verstandig, the decision maker, had filed and served an affidavit dated 28 March 2014 which detailed her serious concerns about the Applicant's performance: Ms. Verstandig, First Affidavit, 14(d) Previously, the letter of dismissal dated 22 August 2013 had referred to "unsatisfactory performance" as the reason for dismissal.
8.The affidavit set out in some detail the performance concerns which had been raised with Ms Miller just before her dismissal: Verstandig, First Affidavit, 18(a). Ms. Miller had been at these meetings. She therefore knew about the performance concerns. She knew these issues had been raised with her at or about the time of her dismissal.
9.Accordingly, a person in the position of Ms Miller, acting reasonably, ought to have known that she confronted serious obstacles if the Court were to accept that a substantial reason for her dismissal was a general protection reason, not the stated performance reasons. She ought to have known that the prospect of her succeeding in her claims were “relatively slim” (a phrase used by Buchanan J in McDonald at [25]).
10.Further, the centrality of performance issues was emphasised in the letter dated 8 May 2014. Ms Miller, acting reasonably, ought seriously and carefully have considered the observation made in the letter dated 8 May 2014 that: "the overwhelming evidence ... will be that you were dismissed because of your poor performance.” At trial, it is submitted that the Respondent lived up to the statement made in its solicitor’s
8 May 2014 letter: that is, at trial the overwhelming evidence was that the Applicant was dismissed because of poor performance and not in contravention of any general protection. The Court appears to have accepted the respondent’s submission (at [64] of the judgment) that the respondent’s evidence was “heaving with corroboration” – his Honour Judge O’Sullivan stated in his judgment that: “the Court accepts the evidence of the respondent that the one and the only reason for the termination of the applicant’s employment was her poor performance”.[1][1] Miller v Executive Edge Travel & Events Pty Ltd [2014] FCCA 1895 at [117]. See also the discussion at [110]–[112].
The offers were reasonable
11.Second, the quantum of the offers was reasonable. They were serious offers of substantial sums, rather than offers that Ms. Miller capitulate. The offer made on 8 May 2014 of $5,500.00 (5 weeks’ wages) was a reasonable one. The trial eve offer (23 July 2014) of $11,000.00 (10 weeks’ wages) was a more generous offer. The offers were reasonable in the context of a short period of employment and the fact that Ms Miller had limited prospects of success given the availability of strong evidence that the reason for the dismissal was performance-based.
The evidence is that the Applicant acted unreasonably as to the offers
12.Third, the offer made on 8 May 2014 was made in the context of a careful letter which set out the reasons for it and the obstacles to success Ms. Miller would confront at trial. The offer was left open for a reasonable time: that is, it was expressed to remain open for a week until 15 May 2004 so that Ms. Miller had time to consider it. Ms. Miller did not take that time. The Applicant peremptorily rejected the offer by a very short email within 24 hours.[2]
[2] Cf. Cugara v Frankston City Council [2012] FCA 1299.
13. There was no response to the offer made on 23 July 2014.
14.Accordingly, there is evidence (the peremptory rejection of the offer dated 8 May 2014) that the Applicant acted unreasonably. There is no evidence that the offers were reasonably assessed.
Conclusion
15.The Respondent seeks that the Court set the amount of the costs pursuant to Schedule 1 of the Rules (as calculated in Annexure A to these submissions).
Annexure A – Costs to be fixed
Item
Amount ($)
(7) Preparation for final hearing –2 day matter
8,998
(9) Final hearing costs for attendance of solicitor at hearing to take judgement and explain orders
542
(12) & (13) Daily hearing fee with 50% advocacy loading for 2 day hearing
5,982
Total
15,522
Orders were made on 8 September 2014 for the applicant to file submissions on the issue of costs. An affidavit was filed by the applicant on 25 September 2014 wherein she deposed:
“(1)Referring to the respondent’s paragraph [7] and [8],
I categorically disagree, as Ms Verstandig had never discussed any concerns about my performance during the course of my employment, nor were the contents of the letter of dismissal ever discussed with me at any time.
(2)Referring to paragraph [9], I have at all times believed the only reason for my dismissal was a general protections reason and not for a performance reason.
(3)Referring to paragraph [10], I do not agree that I did not act reasonably. I believe had this offer been made earlier,
I would have been better able to seriously consider it.
(4)Referring to paragraph [11], I do not agree that the offer made on 8 May 2014 was a reasonable one. Regarding the trial eve offer on 23 July 2014, I did not receive this offer as on that day I did not open any emails and only became aware that an offer was made at approximately 5pm on
24 July 2014, being end of the first day of trial, when Mr Champion approached me about it. I did subsequently open my email later that same night. However, the deadline date to respond had already passed. I believe had this offer been made earlier, I would have been better able to seriously consider it. The respective offers made on 8 May and
23 July 2014, were commensurate with conditions I found to be unacceptable.
(5)Referring to paragraph [12], as the offer made on 8 May 2014 was left open for one week until 15 May 2014,
I perceived it to be an offer made in lieu of attending mediation. This would have been unacceptable to me and is why I responded on 9 May 2014 with an email.
Now produced and shown to me and marked Annexure “A” is a true copy of the applicant’s email. I believe had this offer been made substantially prior to mediation, I would have had the opportunity to seek legal advice at Fitzroy Legal on a Monday evening only.
(6)Referring to paragraph [13], I agree that there was no response to the offer made on 23 July 2014 for the reason already stated that I did not receive the offer in good time.
(7)Referring to paragraph [14], I disagree that there is evidence that I acted unreasonably. There was insufficient time allowed for me to reasonably assess any offers.
(8)I correct Mr Michael McIver in his affidavit paragraph [4] where he suggests St Kilda Legal Service Co-op Limited were my solicitors. At no time did I retain, nor was I represented by this organisation. Notwithstanding seeking advice privately, I was self represented throughout this entire matter.
(9)CONCLUSION: Referring to paragraph [15], Should the Court set the amount of the costs, I would not be in a position to pay them due to the following:
(a)I have been and remain unemployed since 23 August 2013.
(b)I am homeless, staying temporarily with friends.
(c)I receive Newstart Allowance via Centrelink.
(e)I am receiving ongoing counselling and treatment for depression and anxiety as a result of the hardships during and subsequent to my employment at Executive Edge.
(f)I have been unable to afford legal representation nor pro-bono representation and believe I have acted to the best of my ability to have my case heard.”
Consideration
Neither party took issue with the Court determining the question of costs on the papers. The Court can order costs if it is satisfied that a party instituted these proceedings vexatiously or without reasonable cause. In Khiani v Bureau of Statistics [2011] FCAFC 109, the Full Court of the Federal Court dealt with an application for costs on the basis that the appeal which had been dismissed was instituted without reasonable cause. The Full Court said:
“51.The submission on behalf of the respondent was based on the proposition that the appeal was instituted without reasonable cause. Counsel for the respondent invoked what was said by Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-265, cited in Re Ross; Ex parte Crozier [2001] FCA 1665 (2001) 111 IR 282 at [9]:
[O]ne 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, 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.
The authorities are summarised in Nimmo, in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [27]-[30] per Reeves J.”
However as this was not the ground on which the respondent relied it is not necessary to consider it further.
The Court may also order a party to pay costs if the Court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs. As the respondent’s submissions set out earlier make clear this was the basis on which costs were sought.
In Rentuza v Westside Auto Wholesale [2009] FMCA 1022 (“Rentuza”) Lucev FM (as His Honour then was) considered the issue of whether an unreasonable act or omission had caused a party to incur costs for the purposes of s.570(2)(b) of the FW Act.
At paragraphs 26 to 28 in Rentuza His Honour said:
“26.For the purposes of s.570(2)(b) two criteria must be fulfilled. They are:
(a) that a party must have engaged in an unreasonable act or omission; and
(b) that the unreasonable act or omission must have caused another party to incur costs in connection with the proceeding.
27.Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case.
28.The exercise of the discretion in s.570(2)(b) is not necessarily engaged because:
(a) a party does not conduct litigation efficiently;
(b) a concession is made late;
(c) a party may have acted in a different or timelier fashion;
(d) a party has adopted a genuine but misguided approach.” [Footnotes from original omitted]
For the purposes of s.570(2)(b) of the FW Act, the Court must be satisfied that two criteria have been fulfilled, as set out in Construction, Forestry, Mining and Energy Union v Clarke (2008) 170 FCR 574, they are:
“(a)that a party must have engaged in an unreasonable act or omission; and
(b)that the unreasonable act or omission must have caused another party to incur costs in connection with the proceedings.”
The respondent relies on the applicant’s unreasonable act or omission in relation to the (time limited and conditional) offers of settlement annexed to the affidavit of Mr McIver referred to earlier.
As was noted in Rentuza (supra) the exercise of the discretion of s.570(2) is not necessarily engaged just because:
(a)a party does not conduct litigation efficiently;[3]
(b)a concession is made late;[4]
(c)a party may have acted in a different or timelier fashion;[5] and
(d)a party has adopted a genuine but misguided approach.[6]
[3] see Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ
[4] see Clarke FCR at 582 per Tamberlin, Gyles and Gilmour JJ
[5] see Clarke FCR at 582-583 per Tamberlin, Gyles and Gilmour JJ
[6] see for example, the approach in Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879 at para 39 per Tracey J
Whether a party has engaged in an unreasonable act or omission depends upon an objective analysis of the particular circumstances of the case (see Australian and International Pilots Association v Qantas Airways Ltd (No.3) [2007] FCA 879).
Mr McIver’s affidavit did exhibit an offer of settlement made in 2013. However given this was made before the commencement of these proceedings, I am not satisfied it amounts to an act or omission for the purpose of these proceedings.
In relation to the first offer of settlement made during the course of these proceedings the applicant as a layperson reading the letter would have understood that she only had until 15 May 2014 to take advantage of the offer. At that time the applicant had not been served with the affidavit material on which the respondent relied. Whilst there is evidence the applicant rejected this offer[7] given the conditional nature of the offer, her status as a layperson, that she had not got the respondent’s evidence that was to be relied on at trial and mediation was the following week, I am not satisfied the applicant acted unreasonably.
[7] See Annexure C to Mr McIver’s affidavit.
In relation to the second offer of settlement made during the course of these proceedings on 23 July 2014, the applicant’s evidence is she didn’t receive it in time, the applicant as a layperson reading the letter would have understood she only had until 5.00pm 23 July 2014 to take advantage of the offer. In Cugura v Frankston City Council [2012] FCA 1299 at [31] it was said:
“A deliberate decision to refuse a reasonable offer of settlement is a factor which would normally weigh more heavily in favour of a finding of unreasonable action than would a mere failure to respond by an unrepresented litigant.”
Given the applicant’s status as a layperson and the timing of that offer, I am not satisfied there is evidence of a deliberate decision by the applicant to refuse a reasonable offer of settlement.
Accordingly, and as these are the only grounds relied on by the respondent, I am not satisfied there has been an unreasonable act or omission by the applicant.
Conclusion
Accordingly, and for the reasons set out above there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Judge O’Sullivan
Associate:
Date: 8 October 2014
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