Miss Christie Meys v Sawtell Hotel

[2016] FWC 5561

[2016] FWC 5561

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Miss Christie Meys
v
Sawtell Hotel
(U2016/377)

VICE PRESIDENT CATANZARITI SYDNEY, 10 AUGUST 2016

Application for costs.

[1] Miss Christie Meys (Miss Meys) was employed as a casual employee by Sawtell Hotel from 4 June 2015 until 11 March 2016. On 23 November 2015 the parties entered into a training contract that provided that a probationary period would be in place for two months. 1 On 23 January 2016, the training contract was terminated by Sawtell Hotel.2 Mr C. Nealer, the Licensee of Sawtell Hotel, informed Miss Meys that Sawtell Hotel wished to continue to employ her as a casual employee.3 On 29 January 2016, Miss Meys lodged an application for a remedy for an unfair dismissal under s.394 of the Fair Work Act 2009 (the Act). On 9 March 2016, the Respondent lodged a Form F3 in response (Employer Response) to the application.4 Miss Meys continued to work with Sawtell Hotel as a casual employee until she resigned on 11 March 2016.5

[2] In the Employer Response Sawtell Hotel raised a jurisdictional objection to the application which was that there was no dismissal and that Miss Meys remains a current employee. On 4 April 2016, Miss Meys filed material in support of her unfair dismissal application. On 26 April 2016, the Respondent filed material in support of the jurisdictional objection. On 29 April 2016, I held a teleconference between the parties to see whether the matter could be otherwise conciliated or directions could be made.

[3] At the conclusion of the teleconference, Miss Meys sought to be granted seven days to obtain advice as to whether she wanted to continue with the matter. No objection to this course of action was raised. Seven days later, on 6 May 2016, Miss Meys informed my chambers that she was not continuing with her application. On 9 May 2016 my chambers informed Sawtell Hotel that the application had been withdrawn. 6 On the same day, my chambers cancelled the listing of the matter and proceeded to close the file.

[4] On 20 May 2016, the Australian Hotels Association NSW (AHA), as the representative of Sawtell Hotel, lodged a Form F6 applying for costs in the amount of $6,547.20. 7 The Form F6 stated that:

• Pursuant to s. 611(2)(a) of the Act, Miss Meys brought the unfair dismissal application vexatiously and/or without reasonable cause 8;



• It is an abuse of process for a litigant to instigate proceedings in a Court or tribunal as a means of obtaining legal advice 9;



• It should have been apparent to Miss Meys that her unfair dismissal application was made without reasonable cause on the basis that it was so manifestly groundless or obviously untenable that it could not succeed as there was no dismissal 10;



• Pursuant to s. 611(2)(b) of the Act, costs are also sought on the basis that it should have been reasonably apparent to Miss Meys that her unfair dismissal application had no reasonable prospects of success; and



• It was unreasonable for Miss Meys, upon receiving the Employer Response, to tender her resignation to avoid working on 11 and 12 March 2016, rather than discontinuing her unfair dismissal application. Sawtell Hotel posited that it incurred costs because of Miss Meys’ failure to discontinue, and that it therefore seeks costs pursuant of s. 400A of the Act.

[5] On 23 May 2016 my chambers informed the parties by email that my preliminary view was that costs should not be awarded on the basis that at no time during the teleconference on 29 April 2016 did Sawtell Hotel indicate that it wished to apply for costs in the event that Miss Meys discontinued her application. I invited Sawtell Hotel to inform me whether it wished to continue with its application for costs in light of my preliminary view.

[6] On 30 May 2016, the AHA informed me that while the matter of costs was not foreshadowed at the time of the teleconference, Sawtell Hotel wished to pursue its application for costs. 11 On 8 June 2016, the AHA informed me that it would like the opportunity to provide short written submissions to my chambers in relation to the application for costs.12 I approved this request and on 9 June 2016 my chambers issued the following directions to the parties:

“1. Sawtell Hotel shall file in the Commission and serve on Miss Meys an outline of submissions by 5.00pm Monday 20 June 2016.

2. Miss Meys shall file in the Commission and serve on the Sawtell Hotel an outline of submissions by 5.00pm Monday 27 June 2016.

3. Sawtell Hotell shall file in the Commission and serve reply submissions by 5:00pm Monday 4 July 2016.” 13

[7] My chambers asked the parties whether they wanted to have a hearing of the matter. The parties advised my chambers that they did not request a hearing and wanted the issue of costs to be determined on the papers.

[8] Before outlining the submissions of the parties I will outline the relevant statutory framework.

The statutory framework

[9] In its application for costs, Sawtell Hotel relied on s. 611 of the Act, which sets out the general provisions as to when costs may be ordered, and s. 400A of the Act, which deals with costs specifically incurred by a party in unfair dismissal proceedings.

[10] Section 611 of the Act provides:

“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 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.

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.

Note: This subsection is a civil remedy provision (see Part 4-1).”

[1] 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.”

[2] Section 402 of the Act provides that an application for costs under s.611 and s.400A must be made within 14 days after the matter is discontinued. Sawtell Hotel’s cost application was made within 14 days of Miss Meys discontinuing the matter. Accordingly, s.402 of the Act is satisfied.

Submissions

[3] I received the following submissions in relation to the costs application:

• Submissions of Sawtell Hotel;



• Submissions of Miss Meys; and



• Response submissions of Sawtell Hotel in reply to Miss Meys’ submissions.

[4] I will proceed by outlining these submissions.

Submissions of Sawtell Hotel

[5] On 20 June 2016, Sawtell Hotel lodged submissions regarding its application for costs. 14 Sawtell Hotel made submissions with regards to s.611(2)(a), s.611(2)(b) and s.400A of the Act. I will outline Sawtell Hotel’s submissions with regards to these three sections of the Act below.

S.611(2)(a) of the Act

[6] Section 611(2)(a) of the Act prescribes that a costs order can be made if the FWC is satisfied that Miss Meys made the application vexatiously or without reasonable cause. Sawtell Hotel submitted that an application can be considered “vexatious” if it is instigated for a purpose other than the settlement of the issues arising in the claim. In relation to the word “vexatiously”, Sawtell Hotel quoted Justice North in Nilsen v Orange Trust 15(Nilsen) and noted that in Attorney-General for New South Wales v Solomon, it was held that proceedings can be classified as vexatious if brought for collateral or ulterior purposes or when the proceedings are not a bona fide attempt to have the question in dispute adjudicated.16

[7] Sawtell Hotel posited that Miss Meys was seeking to determine what her options are by submitting her unfair dismissal application. Sawtell Hotel contended that it is highly inappropriate and an abuse of process to instigate legal proceedings against one’s own employer as a means of seeking legal advice regarding a cause of action against them, and is therefore vexatious.

[8] Sawtell Hotel also submitted that Miss Meys brought its application without reasonable cause and quoted Wilcox CJ in Re Joseph Michael Kanan v Australian Postal and Telecommunications Union to support that contention. 17 Sawtell Hotel also quoted Thatcher C in Walker v Mittagong Sands Pty Limited T/A Cowra Quartz18 and posited that it cannot be said that a claim for unfair dismissal was not brought without reasonable cause in circumstances where the applicant:

• Remains employed by the employer;



• Continues to attend work thus suggesting they are acutely aware that they are still an employee and their employment has not been terminated;



• Is remunerated for work completed further suggesting to the employee that they remain employed; and



• Later resigns from the employment in writing, a step which confirms that Miss Meys considered herself to be a current employee of Sawtell Hotel.

S.611(2)(b) of the Act

[9] Section 611(2)(b) of the Act prescribes that a costs order can be made if the FWC is satisfied that it should have been reasonably apparent to Miss Meys that the application she filed had no reasonable prospects of success. Relying on a decision by a Full Bench of the FWC, 19 Sawtell Hotel posited that this requires an objective test. Sawtell Hotel contended that the case of Mijaljca v Venture DMG Pty Ltd (“Mijaljca”)20, where costs were awarded, is in some respects identical to the present dispute.

[10] Sawtell Hotel also referred to Maleknia v University of Sydney (“Maleknia”) where costs were awarded following a jurisdictional objection being raised by the employer on the basis that the application was out of time. 21 Sawtell Hotel submitted that Maleknia had a similar factual matrix to the present dispute in that the nature of the relevant subject matter was so blatantly obvious to Miss Meys that the application had no reasonable prospects of success.

[11] Sawtell Hotel contended that on an objective basis, it cannot be said that it would not have been reasonably apparent that the matter had no prospects of success. Sawtell Hotel submitted that on the evidence, it is open to conclude that Miss Meys conceded and recognised that her employment had not been terminated. Sawtell Hotel posited that given that termination/dismissal is a crucial event and must occur to enliven an unfair dismissal claim under the Act, an application made where there is no termination has no reasonable prospects of success and is so hopeless that it is bound to fail. Sawtell Hotel also submitted that the FWC’s website would have assisted Miss Meys in determining whether she was eligible to bring a claim.

S.400A of the Act

[12] Section 400A of the Act prescribes that a costs order can be made if the FWC is satisfied that Sawtell Hotel incurred costs because of an unreasonable act or omission of Miss Meys in connection with the conduct or continuation of the matter. Sawtell Hotel relied on the comments of a Full Bench in Stagno v Frews Wholesale Meats (Stagno) 22and contended that it was unreasonable for Miss Meys to:

• Instigate the proceedings in the first place; and



• Fail to discontinue the proceedings after receiving the Employer Response.

[13] In light of these submissions, Sawtell Hotel applied for costs pursuant to s.611 and/or 400A of the Act.

Submissions of Miss Meys

[14] On 21 June 2016 Miss Meys lodged brief submissions regarding the application for costs. Miss Meys contended that she was unable to afford to pay any legal costs sought by Sawtell Hotel as she was being pregnant and expecting a child in the near future. Miss Meys also stated that she would not be paying costs on the basis that:

• At no time was she advised to solicit legal advice;



• She was uncertain about the fairness of the termination of her traineeship, not her actual contract of employment; and



• She does not believe that Sawtell Hotel’s legal fees are as high as what they purport.

[15] In light of the above points, Miss Meys contended that she would not be paying the legal costs of Sawtell Hotel.

Submissions of Sawtell Hotel in reply

[16] In response to the submissions of Miss Meys, Sawtell Hotel contended that whether costs are ordered is a matter for the FWC to decide and is not a situation whereby a party can simply declare that they will not be paying. Sawtell Hotel submitted that a party who has incurred costs through the actions of another should not be prejudiced in a costs application simply because another party has indicated that they will not be paying the costs out of protest.

[17] Sawtell Hotel, in response to Miss Meys’ statement that her intention was to find out if her traineeship contract was terminated fairly, contended that a reasonable person would have sought legal advice to answer such a question rather than institute proceedings against her current employer. Sawtell Hotel noted that the FWC is not an advisory service in support of this contention.

[18] Sawtell Hotel submitted that Miss Meys has confirmed that:

● She was aware that she made an unfair dismissal claim; and

● She was aware that her employment had not been terminated.

[19] Sawtell Hotel posited that in such circumstances, it is appropriate that a costs order is made pursuant to either s.400A or 611 of the Act. Sawtell Hotel submitted that if there was no confusion as to whether there was a termination, it should have been reasonably apparent to Miss Meys that her application had no reasonable prospects of success and was brought without reasonable cause.

Consideration – s.611 of the Act

[20] Section 611(1) of the Act enshrines the prima facie assumption that a party will bear their own costs in relation to a matter before the FWC. Pursuant to s.611(2) of the Act, my discretion to override this prima facie assumption and order a party to bear some or all of the costs of another party in relation to an application to the FWC is enlivened only if the application was made:

● Vexatiously (s.611(2)(a));

● without reasonable cause (s.611(2)(a)); or

● in circumstances in which it should have been reasonably apparent to Miss Meys that the application had no reasonable prospect of success (s.611(2)(b)).

[21] I will deal with each of these three possible situations in turn below.

Was the application made vexatiously?

[22] The question of whether Miss Meys made her application “vexatiously” looks to her motive in instigating the unfair dismissal proceedings. In Nilson, North J observed that:

“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.” 23

[23] 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 and unfairly burdensome, prejudicial or damaging" and "productive of serious and unjustified trouble and harassment."” 24

[24] More recently, a Full Bench of the FWC similarly 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 Nilson v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed.” 25

[25] In light of these authorities it follows that an application is made vexatiously if the motive of the applicant in making the application was to harass or embarrass the other party, or gain a collateral advantage. An application that is unfairly burdensome, prejudicial or damaging also falls within the concept of vexatiousness. The authorities also confirm that the concept of vexatiousness is to be construed narrowly.

[26] Sawtell Hotel has submitted that the purpose of Miss Meys’ application was to utilise the FWC in lieu of obtaining independent legal advice and that this was vexatious. It is not the role of the FWC to provide legal advice to applicants. If Sawtell Hotel’s submission that Miss Meys made her application to utilise the FWC in lieu of obtaining independent advice is correct, it could be said that a purpose of Miss Meys application was to engage with the FWC in a manner that is beyond the role of the FWC; that is, to obtain legal advice.

[27] It does not follow however, that an applicant motivated by the intention of engaging with the FWC in a manner that is beyond the role of the FWC (to obtain legal advice), has made a vexatious application to harass or embarrass the another party or gain a collateral advantage; something more is required. Even if it is accepted that a purpose of Miss Meys’ application was to utilise the FWC in lieu of obtaining independent legal advice, I am not persuaded that this establishes that the motivation of Miss Meys was to harass or embarrass Sawtell Hotel.

[28] Having determined that Miss Meys’ motive was not to harass or embarrass Sawtell Hotel, it is necessary, then, to consider the notion of “collateral advantage” that North J observed to be within the spectrum of a “vexatious” application. In Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited Foster J of the Federal Court of Australia observed that:

“The authorities distinguish between two types of case. On the one hand, a proceeding will not be regarded as an abuse of process by reason only that it is brought for the purpose of taking collateral advantage of any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding. On the other hand, if a proceeding is brought for the predominant purpose of obtaining collateral advantage from the existence of the proceeding as such, as opposed to collateral advantage flowing from any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding, it will be an abuse of process and liable to be stayed.” 26

[29] Even if it is accepted that a purpose of Miss Meys’ application was to obtain legal advice from the FWC as to what her legal rights may be, it does not follow that she made her application to obtain a benefit from the application other than the advantages that would have flown from the judgment or settlement of her legal rights. In its submissions, Sawtell Hotel has not directed me to any collateral advantage that Miss Meys would have obtained had the matter proceeded to judgment as to her legal rights or a settlement of the matter. As such and applying the relevant authorities, I am not persuaded that, even if Sawtell Hotel’s submission is accepted with regards to the motivations of Miss Meys, her motivations indicate that she was seeking to obtain a collateral advantage, other than, of course, the natural benefits that may have flown to her from a judgment or settlement of her legal rights.

[30] In light of the above consideration, I am not persuaded that in making her application Miss Meys was motivated to harass or embarrass Sawtell Hotel. Nor am I satisfied that Miss Meys was seeking to obtain a collateral advantage other than the benefit that may have arisen from any judgment or settlement of her legal rights. Sawtell Hotel has not submitted that the unfair dismissal application was "seriously and unfairly burdensome, prejudicial or damaging" 27 to it, and, in any event, I am not persuaded that the unfair dismissal application imposed prejudicial damage or an unfair burden on Sawtell Hotel.

[31] These considerations, together with the relevant authorities obliging me to construe the concept of “vexatiously” narrowly, mean that I am not persuaded that Miss Meys’ application was made vexatiously.

Was the application made without reasonable cause?

[32] In determining whether proceedings have been brought without reasonable cause, the relevant question is whether the proceeding had reasonable prospects of success at the time they were instituted, not whether they ultimately failed. 28 A Full Bench of the FWC in E. Church v Eastern Health (Church) recently considered the relevant authorities and stated the following:

“[30] We now turn to the expression ‘without reasonable cause’. 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. The test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union Wilcox J put it this way:

“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, 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.” 29

[33] In the recent decision of Keep v Performance Automobiles Pty Ltd (Keep), a Full Bench of the FWC approved the approach in Church and summarised the principles relevant to determining whether an application is made without reasonable cause:

“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)(a) 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.

(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.’’ 30

[34] These authorities indicate that if the success of an application 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’. The unfair dismissal application filed by Miss Meys had as its central issue questions over whether there had been termination as a result of the cancellation of the traineeship and the reduction in working hours. These questions raise a question of law as to what constitutes a dismissal (or possibly, a constructive dismissal) or a forced resignation. The fact that there was a question of law is a matter that needs to be considered with regard to whether the unfair dismissal application was made without reasonable cause. In light of the authorities, the existence of this question of law makes it difficult to establish that the proceeding was one without reasonable cause as is posited by Sawtell Hotel.

[35] Sawtell Hotel contends that there is no conceivable situation where an employee who continues to be employed can bring and be successful in an unfair dismissal application. Relevant to this contention is the following passage from the joint judgment of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd (Byrne) which has been relied on by a Full Bench of the Australian Industrial Relations Commission 31:

“It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract.” 32

[36] As observed by Brennan CJ and Dawson and Toohey JJ in Byrne, it is possible for a termination of the employment relationship to constitute a wrongful dismissal, notwithstanding that the contract of employment may continue until the employee ‘puts an end’ to that contract. It is therefore conceivable that an employment relationship between two parties is terminated – and that a remedy for an unfair dismissal may be available - notwithstanding that the contract of employment for casual work, for example, continues until the contract is terminated. It is inconsistent with these authorities to conclude that the fact that Miss Meys was retained as a casual employee after filing her unfair dismissal application means that there is no conceivable situation in which she could make an unfair dismissal application with reasonable cause, especially in circumstances where her employment conditions changed following the termination of the traineeship contract that was in place between the parties.

[37] In Byrne, Brennan CJ and Dawson and Toohey JJ conceived that such a situation could arise where an employment relationship of a particular type is terminated notwithstanding that the contract of employment may continue. As such, I am not persuaded to accept Sawtell Hotel’s submission that there is no conceivable situation whatsoever where an employee who continues to be employed, pursuant to a contract of employment, can bring and be successful in an unfair dismissal claim. As such, while I make no findings as to the likelihood of Miss Meys succeeding in her original application, I am not persuaded that Sawtell Hotel’s submissions have established that the unfair dismissal application was ‘manifestly groundless’ or ‘so obviously untenable that it cannot possibly succeed.’ I reach this conclusion on the basis that a question of law arose in the unfair dismissal application submitted by Miss Meys and there are conceivable situations where an unfair dismissal application can be instigated with reasonable cause where an employment relationship of a particular type is terminated, notwithstanding that the contract of employment may continue.

[38] These considerations, together with the obligation imposed by the relevant authorities upon on me to exercise the power in s.611(2)(a) with ‘caution’, mean that I am not satisfied that the unfair dismissal application was made without reasonable cause.

Was the application made in circumstances in which it should have been reasonably apparent to Miss Meys that the application had no reasonable prospect of success?

[39] Section 611(2)(b) of the Act prescribes that a costs order can be made if the FWC is satisfied that it should have been reasonably apparent to Miss Meys that the application had no reasonable prospects of success. The authorities confirm that this section imports an objective test and should be enlivened only with extreme caution. In Clothier v Ngaanyatjarra Media, 33 the Full Bench considered the meaning of the phrases “should have been reasonably apparent” and “had no reasonable prospect of success.” The Full Bench in that case cited Baker v Salva Resources Pty Ltd (Baker) with approval. In Baker it was 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.” 34

[40] A consideration of Baker indicates that section 611(2)(b) is triggered if two findings can be made. The first finding that is required is that Miss Meys’ application had no reasonable prospect of success. The second finding is that this should have been reasonably apparent to Miss Meys. Pursuant to Baker, the test for whether an application has no reasonable prospect of success is whether the application is manifestly untenable or groundless or so lacking in merit as to be not reasonably arguable. In paragraphs [45] – [47] of this decision I have explained why I am not satisfied that the unfair dismissal application was ‘manifestly groundless’ or ‘so obviously untenable that it cannot possibly succeed.’ It would be illogical, and certainly not cautious, for me to then somehow be satisfied that the unfair dismissal application was “manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.” 35 That is to say that it would be illogical, and certainly not cautious, for me to reach the conclusion that Miss Meys’ application had no reasonable prospects of success pursuant to the approach stipulated in Baker after I have found that I am not satisfied that her application was made without reasonable cause.

[41] Sawtell Hotel submitted that Maleknia, where costs were ordered,had a similar factual matrix to the present dispute. In Maleknia however, Senior Deputy President Drake was satisfied that there was no reasonable prospect of success. In the present case, I am not persuaded to make such a finding.

[42] These considerations, together with authorities obliging me to exercise extreme caution in making a positive finding under s.611(2)(b) of the Act, mean that I am not satisfied that it should have been reasonably apparent to Miss Meys that her application had no reasonable prospect of success.

Consideration – s.400A of the Act

[43] Section 400A of the Act prescribes that a costs order can be made if the FWC is satisfied that Sawtell Hotel incurred costs because of an unreasonable act or omission of Miss Meys in connection with the conduct or continuation of the matter. In contending that it was unreasonable for Miss Meys to instigate the proceedings in the first place and to not discontinue the proceedings after receiving the employer response, Sawtell Hotel relied on Stagno where a Full Bench said:

“This last extract introduces a point of distinction between s 170CJ(1) and (2). The former refers to ‘‘without reasonable cause’’, the latter to ‘‘acted unreasonably’’. This anomaly, as it was described, is noted by a full bench in Lloyd v International Health and Beauty Aids Pty Ltd t/as Elly Lukas Beauty College (1998) 83 IR 458; Print Q5446 and, by inference, the bench is of the view that the tests are different in s 170CJ(1) and (2). That there is a different formula is clear but we are of the view that the formulations are based on the stage of proceedings at which they occur. Section 170CJ(1) relates to the initiation of proceedings. Section 170CJ(2) relates to the failure to discontinue or the discontinuance of the matter. In each case what attracts the discretion to award costs is unreasonable action or the absence of sufficient reason for the action taken. What is considered to be without reason is determined by reference to the stage that the proceeding has reached. We note that this leaves open the possibility that proceedings may commence which are with reasonable cause but may, in particular circumstances at a later stage, be further prosecuted unreasonably.

We are of the view that a party to a proceeding commenced under s 170CE of the Act in which the Commission has begun arbitrating has acted unreasonably in failing to discontinue the matter if when, at the relevant time, upon the facts apparent to the applicant there was not substantial prospect of success.” 36

[44] With regards to Sawtell Hotel’s submission that Miss Meys was unreasonable in instigating the matter, I have above noted that Sawtell Hotel’s submissions have not persuaded me that Miss Meys brought the application without reasonable cause. It would therefore not follow, nor would it be cautious, for me to find that Miss Meys was unreasonable in instigating the matter.

[45] In relation to Sawtell Hotel’s contention that it was unreasonable for Miss Meys to not discontinue the proceedings after receiving the Employer Response, the observations of the Full Bench in Stagno are particularly relevant. In Stagno, the Full Bench observed that unreasonable discontinuance occurs if the party against whom costs are sought fails to discontinue the matter when it becomes “apparent to [them] there was no substantial prospect of success.” 37 Therefore, the point in time at which it becomes apparent to the applicant that there was no substantial prospect of success is critical in determining whether s.400A of the Act is enlivened.

[46] During the teleconference on 29 April 2016, I drew Miss Meys’ attention to the jurisdictional objection raised by Sawtell Hotel and directed Miss Meys to inform Sawtell Hotel and my chambers of her position and whether she was continuing with the application within seven days. Miss Meys discontinued her application within seven days which indicates that it is most likely that this was the point in time at which it became apparent to her that there was not a substantial prospect of success in her application. When it became apparent to Miss Meys that there was not a substantial prospect of success she discontinued her claim within the seven day period. Sawtell Hotel did not object to that seven day period being granted to Miss Meys. Therefore, I am satisfied that Miss Meys discontinued her application within the period of time that it was reasonable for her to do so.

[47] In light of the above, I am not persuaded that s.400A of the Act is enlivened.

Conclusion

[48] I am not satisfied that Miss Meys’ application was made vexatiously or without reasonable cause. Nor am I satisfied that it should have been reasonably apparent to her that her application had no reasonable prospect of success. Accordingly, I have no jurisdiction pursuant to s.611 of the Act to order costs.

[49] Pursuant to s.400A of the Act, I am not satisfied that it was unreasonable for Miss Meys to instigate the proceedings or unreasonable for Miss Meys to not discontinue the proceedings after receiving the Employer Response. Accordingly, I have no jurisdiction to order costs pursuant to s.400A of the Act.

[50] I note that even if the jurisdiction to order costs pursuant of s.611 or 400A was enlivened, I would as a matter of discretion decline to order costs in this case. This is first because Miss Meys was self-represented (and appears to have no access to expert advice) and therefore could not have been expected to fully appreciate the technical jurisdictional objections that were raised in response to her unfair dismissal application. Additionally, I would take into account the difficulties arising from the fact that Miss Meys appears to be in a vulnerable situation, both financially and emotionally, as a result of her pregnancy and other factors. It is not the role of this Commission to exercise its discretion to issue a costs order in lieu of the prima facie assumption that a party will bear its own costs – an assumption which the authorities require me to cautiously adhere to – when to do so would inflict additional financial and emotional hardship on an already vulnerable self-represented Applicant who has not acted vexatiously, unreasonably or in bad faith.

[51] The costs application is dismissed.

VICE PRESIDENT

 1   Statement of S Greenaway, paragraph 5.

 2   Statement of C Nealer, paragraph 20.

 3   Ibid.

 4   Form F3.

 5   Ibid n 1, annexure B.

 6   Cancellation Notice of Listing, 9 May 2016.

 7   Form F6.

 8   Ibid, paragraph 7.

 9   Ibid, paragraph 8.

 10   Ibid, paragraph 9.

 11   Email received on 30 May 2016 with correction email received on 8 June 2016.

 12   Email received on 8 June 2016.

 13   Directions issued on 9 June 2016.

 14   Costs Application Submissions.

 15 (1997) 76 IR 180.

 16 (1987) 8 NSWLR 667.

 17   [1992] FCC 366.

 18 (2011) 210 IR 370.

 19   Baker v Salva Resources Pty Ltd [2012] FWAFB 4014.

 20   [2012] FWC 2800

 21   [2015] FWC 5304.

 22 (1998) 84 IR 270.

 23   Ibid, n 15.

 24   Hamilton v Oades (1989) 166 CLR 486.

 25   E. Church v Eastern Health [2014] FWCFB 810.

 26 [2016] FCA 787.

 27   Hamilton v Oades (1989) 166 CLR 486.

 28   R v Moore; Ex Parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470.

 29   Ibid n 25.

 30   [2015] FWCFB 1956.

 31   [2008] AIRCFB 1088.

 32   [2008] AIRCFB 1088.

 33   [2012] FWAFB 6323 at paragraph [15].

 34   [2012] FWAFB 4014.

 35   Ibid.

 36   Ibid n 22.

 37   Ibid.

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