Mr Aaron Denis White v Kabi Organic Golf Course
[2012] FWA 2376
•13 APRIL 2012
[2012] FWA 2376 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Aaron Denis White
v
Kabi Organic Golf Course
(U2011/7833)
COMMISSIONER SPENCER | BRISBANE, 13 APRIL 2012 |
Application for costs.
[1] This decision concerns an application made under s.611 of the Fair Work Act 2009 (the Act). The application has been made by Ms Rena Merchant t/a Kabi Organic Golf Course and Orchard (Kabi/Costs Applicant). The application follows the dismissal of an application for unfair dismissal remedy (the primary/substantive application) made by Mr Aaron White (Costs Respondent), on the grounds that the termination was a genuine redundancy within the meaning of the Act. 1
[2] Directions were issued for the filing of submissions in relation to the costs application. Material was received from both parties in accordance with the Directions. As foreshadowed in the Directions, I have determined that this matter be dealt with on the basis of the submissions received.
[3] This matter has been determined on the papers. The Costs Applicant consented to this course. The Costs Respondent having been self-represented in the initial proceedings sought the representation of a barrister in the Costs Matter and a hearing was sought . In deciding to determine the matter on the papers, a s.611 application is not a matter arising under Part 3–2 of the Act; accordingly the conduct of the matter before FWA falls within the general procedural provisions. 2 I had the benefit of assessing the Costs Respondent as a witness and hearing the evidence and submissions in the substantive matter, relevant to the considerations of the costs application.
[4] Whilst this decision does not make reference to all of the materials filed in relation to this matter, all of such have been considered.
Relevant legislation
[5] Section 611 of the Act provides:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 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).”
[6] The power to award costs under s.611 of the Act is discretionary. The general statement in s.611(1) that a person must bear their own costs in relation to a matter before FWA reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances.
Submissions of the Costs Applicant
[7] The Costs Applicant submitted that the Costs Respondent made the primary application vexatiously; without reasonable cause and in circumstances where it should have been reasonably apparent that the primary application had no reasonable prospect of success.
[8] The submissions for the Costs Applicant contended that the primary application was made vexatiously; with the intention of annoying or embarrassing Kabi. This was submitted because the Costs Respondent was aware during his employment, that the business was not financially sustainable and also that the majority of employees were made redundant at the time of his termination. The Costs Respondent also was aware of Ms Merchant’s ill health. In addition, as a further indicator of the substantive application being made vexatiously, the Costs Applicant argued; that following the termination, the Costs Respondent made allegations regarding Kabi’s non-compliance with organic production requirements to the relevant authorities.
[9] The Costs Applicant also submitted that the application was vexatious because it was made for a ‘collateral purpose’, 3 being an attempt to persuade the Costs Applicant to allow the Costs Respondent to harvest the fruit in the orchard and sell it through his own registered business. The Costs Applicant pointed to the submissions of the Costs Respondent in the primary application, where he suggested that the parties could have come to such an agreement, and such an arrangement would have mitigated the loss of income he experienced due to the termination. The Costs Applicant submitted that the Costs Respondent’s submissions, along with the statements he gave in evidence, suggested that the primary application was made with the collateral purpose of using the Act’s unfair dismissal process to achieve that commercial outcome.
[10] The Costs Applicant submitted that the Costs Respondent also acted vexatiously during the course of the primary proceedings. It was contended that Mr White filed additional material outside of the Direction’s timetable, causing the Costs Applicant to incur additional expense in responding to this.
[11] In support of its submissions that the application was made vexatiously, the Costs Applicant made reference to the decision by Roden J in Attorney General v Wentworth, 4 that proceedings are vexatious if they are commenced with the intention to ‘annoy or embarrass’ or brought for a ‘collateral purpose.’5 It submitted that the motive and ‘predominant purpose’ of the party bringing the application must be considered.6
[12] With respect to the contention that the Costs Respondent made the primary application, without reasonable cause and without a reasonable prospect of success, the Costs Applicant submitted that Mr White was aware that the business was closing down (and the reasons for this) and that nine other employees (of total 14) were being made redundant.
[13] In addition to Mr White’s knowledge of the financial position of the business and the health problems of Ms Merchant, the Costs Applicant submitted that from the outset of the primary application, the Costs Respondent, acknowledged that his position had been terminated due to the closure of the business and accepted that Ms Merchant had informed him that his position was being made redundant. The Costs Applicant also confirmed that consultation regarding the business’s closure had occurred. The Costs Applicant submitted that Mr White also accepted that he was aware of Ms Merchant’s deteriorating health and that this was a contributing factor to her decision to close Kabi.
[14] The Costs Applicant also submitted, that around the time of the termination, the Costs Respondent was aware that the majority of Kabi’s employees were also being made redundant, with the only positions to remain, being qualified green keepers, who would maintain the organic golf course.
[15] The Costs Applicant relied on the test in Kanan v Australia Postal and Telecommunications Union 7 regarding the notion of ‘without reasonable cause’, that is, if on the Applicant’s own version of the facts it is clear the proceeding would fail, it can be said that there is no reasonable cause for the application.8 Also in support of the Costs Applicant’s argument, that there was ‘no reasonable prospect of success’, it noted the decision in Baker v Salva Resources Pty Ltd, where it was held that the question of whether there was reasonable cause should be determined objectively.9 On this basis, on examining the facts, the Costs Applicant concluded, the application lacked reasonable cause.
Submissions of the Costs Respondent
[16] The Costs Respondent submitted, that based on the evidence presented by the Costs Applicant and the relevant authorities relating to s. 611, the costs application has no merit and should be dismissed.
[17] In response to the Costs Applicant’s submissions, that Mr White had knowledge of the surrounding circumstances justifying his termination; Ms Merchant’s poor health, the position of the business, and the other nine redundancies; it was contended that such knowledge had been conflated. It was argued that mere knowledge of such facts does not automatically lead to the conclusion that Mr White knew he had genuinely been made redundant and therefore his case was bound to fail.
[18] In relation to the contention that the application was made vexatiously, the Costs Respondent submitted that the Costs Applicant did not present evidence to support the ‘collateral purpose’ argument it raised. The Costs Respondent disputed the inference drawn, that Mr White sought a collateral advantage, because he expressed a desire, to harvest the fruit from the orchard himself. The Costs Respondent argued that the inference is not supported by any direct evidence about the time the application was made and cannot properly be drawn to undermine the application. 10
[19] Further with respect to the question of whether the application was vexatious, the Costs Respondent submitted that a collateral intention, is the taking of a collateral advantage beyond what the law offers. 11 It argued that the evidence did not support the conclusion the Costs Applicant attempted to draw.12
[20] The Costs Respondent also made submissions on the issue of self-representation. In his statement, Mr White conceded that he sought some advice from a solicitor, 13 but claimed that that advice was primarily in relation to a WorkCover claim, and his unfair dismissal application was not discussed at length with the solicitor. The Costs Respondent submitted that for all intents and purposes Mr White represented himself at the hearing and undertook the preparation for the hearing, and therefore in the context of the costs application should be considered a self-represented party.
[21] The Costs Respondent also submitted that even if there was some warrant for ordering costs (which was not admitted), FWA should not exercise its discretion for the following reasons: that Mr White was self-represented, as such did not have a thorough understanding of the Act; his financial and health position is tenuous with no immediate prospects for improvement; and the ordering of costs is sufficiently ‘unusual’ that the factors previously mentioned would militate against an order for costs being made against him.
Conclusions
[22] An assessment of whether the application was made vexatiously requires a consideration of the motive of the Costs Respondent, in contesting the unfair dismissal application. It also requires a consideration as to whether the Costs Respondent’s aim was to harass or embarrass the employer. 14
[23] Further, it requires a consideration of whether the Costs Respondent’s purpose of the initial application was to gain a collateral advantage. 15 The Costs Applicant argued that the Costs Respondent, sought to bring pressure on the Costs Applicant to acquire the fruit from Kabi’s organic orchard, for to his private business, rather than provided to an alternative business, as Ms Merchant had done. It was argued that this was the collateral advantage, the Costs Respondent sought rather than seeking to have the redundancy properly examined via the unfair dismissal application.
[24] In addition the Costs Applicant argued that regardless of this motive, the application was so obviously untenable or manifestly groundless to be utterly hopeless.
[25] The Costs Respondent during the first instance case, was not represented. Whilst he made reference to seeking legal advice, he undertook his own representation and prepared his own submissions and Statement of evidence.
[26] The Costs Respondent’s conduct in the substantive matter, does not establish that the application was made for the collateral purpose of obtaining or securing the management of the Orchard for his private, commercial business.
[27] Having heard the Costs Respondent’s submissions and evidence in the determination of the initial application. The Costs Respondent clearly sought an examination of the Costs Applicant’s actions with regard to his termination of his employment. He sought, via the application, to have the Costs Applicant’s lack of consultation regarding the redundancy, his selection for termination and a consideration of whether he should have remained employed in one of the retained positions. He submitted he had the skills to maintain the golf course and the orchard and on this basis, his skills should have been retained.
[28] A significant degree of the information regarding the nature of the work that remained to be done by the residual workforce (after the business ceased trading) emerged throughout the hearing.
[29] It was clear on the evidence, in the hearing, that the Costs Respondent; due to the manner in which the final communication of his redundancy occurred, was not given a proper understanding of the specific employees that were to be retained and why, and why he was not suitable to be redeployed into one of these positions.
[30] Ms Merchant had considered those employees with the formal green keeping qualifications; were the optimum employees to undertake the work of maintaining the golf course for sale. The Costs Respondent, during the hearing, had argued that although he did not have the commensurate formal green keeping qualifications, he had previously undertaken work (for Ms Merchant) in maintaining the golf course. In addition he emphasised, he had the ‘organic’ qualifications to have maintained the ‘organic’ status of the orchard and to have dealt with the potential fruit fly issues. In addition, he argued he could have dealt with the remaining crop of fruit in the orchard.
[31] It is recognised that the Costs Respondent made it known; he would have been keen to operate the orchard through his own business; as an alternative to Ms Merchant allowing a separate organisation to simply have the fruit. Whilst the Costs Respondent expressed his frustration with Ms Merchant’s decision, his position was understandable. He had been made redundant, he had no alternative work, he had invested a significant period of his employment in managing the orchard and was clearly as passionate, as Ms Merchant was, about developing the organic orchard and the associated products. The fact that he declared his disappointment with this decision; and had stated a desire or capacity to work or manage the orchard; in preference to the other organisation, did not provide evidence that the purpose he brought the application, was to engineer this outcome. Whilst a resulting arrangement, with the orchard possibly, adopted through his business, would not have provided an alternative employment arrangement, it would have perhaps provided an income for him. He considered via further employment with the Employer, he could have dealt with the fruit crop and maintained the orchard for sale. It was only on hearing the Employer’s accountant’s evidence, that Mr Offenhauser made it clear that the business was not in a financial position to retain any other employees or to continue to operate the orchard. The clarity and detail of the financial position of the business and the plans for the maintenance of the golf course for resale, was only fully provided during the course of the evidence at the hearing. These were matters that should have been discussed with the Costs Respondent, at the time of the redundancy.
[32] The Costs Respondent was entitled to gain an understanding of these matters in the consultation phase; instead a number of the questions were only appropriately answered during the course of the proceedings. Accordingly the Costs Applicant’s submission that the Costs Respondent brought the application on a vexatious basis to gain a collateral advantage cannot be substantiated. The Costs Respondent was self-represented and argued that there may have been alternative causes to the redundancy, which were open to the Employer. For the application to bring about an examination of what occurred with the orchard and what scope there may have been for the Costs Respondent as an employee or through a separate arrangement is not commensurate with bringing the application for a collateral advantage. The Costs Respondent as a self-represented party raised reasonable questions; which legitimately could have been discussed with him at the time of the redundancy, particularly given his involvement in the development of the orchard.
[33] The Costs Respondent’s application was brought on a genuine basis to have an examination of his resulting dismissal, the consultation process and the issues of his potential redeployment in a position on the golf course. The fact that he raised that he had a similar capacity, to the alternative business, to work the orchard, does not render his application vexatious. There were real questions to be assessed in the matter of the dismissal. The decision in the primary application was made with the benefit of the evidence provided, much of which arose out of the cross-examination. The initial decision examined how the consultation and potential redeployment exercise could have been more appropriately conducted.
[34] The Costs Respondent’s clear intention with the initial application was to have these issues determined. The Costs Applicant argued that the Costs Respondent’s application, was regardless of the motive so ‘obviously untenable or manifestly groundless to be utterly hopeless.’ The initial decision stepped through the issues to be determined and weighed the arguments and evidence. The decision provided the reasoning in relation to the issues raised by the Costs Respondent. The matter was not straight forward or clearly untenable or groundless.
[35] In consideration of awarding costs, the conclusion that an application had no real prospects of success ‘should only be reached with extreme caution and where the application is manifestly untenable or groundless.’ 16 As noted by Finkelstein J in Zhang v The Royal Australian Chemical Institute Inc (No. 2), parties ‘should not be deterred from bringing proceedings by the risk of an adverse costs order.’17
[36] I am not satisfied in the circumstances as set out in full in the initial decision, that it should have been reasonably apparent to the Costs Respondent that his unfair dismissal application had no reasonable prospects of success. Further it cannot be determined that the application was made on a vexatious basis or for a collateral purpose.
[37] Accordingly for the aforementioned reasons, the award of costs is refused, and the costs application is dismissed. I Order accordingly.
COMMISSIONER
1 PR517414 issued 2 December 2011.
2 Fair Work Act 2009 (Cth), ss. 589, 593.
3 Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.
4 (1988) 14 NSWLR 481.
5 (1988) 14 NSWLR 481 at 491.
6 Holland and another v Nude Pty Ltd t/a Nude Delicafe [2011] FWA 8012.
7 Kanan v Australia Postal and Telecommunications Union 1992 FCA 366.
8 1992 FCA 366 at 29.
9 [2011] FWAFB 4014 at 10.
10 Citing G v H (1994) 181 CLR 387.
11 Citing Williams v Spautz (1992) 174 CLR 509.
12 Browne v Dunn (1893) 6 R 67 (HL).
13 Statement of Aaron White in relation to costs, dated 3 February 2012, paragraph 4.
14 Nilsen v Loyal Orange Trust (ACN 004 245 694) [1997] IRCA 267.
15 Attorney-General v Wentworth (1988) NSW LR 481.
16 Watson SDP, Lloyd SDP and Gay C, Wodonga Rural City Council v Lewis PR956243, 4 March 2005.
17 [2004] FCA 1626 at PN7.
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