Mr Charles Shelton v Ultra NDT ATF the O & a Kavanagh Family Trust T/A Ultra NDT Pty Ltd

[2014] FWC 4578

[2014] FWC 4578

FAIR WORK COMMISSION

DECISION

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

Mr Charles Shelton
v
Ultra NDT ATF The O & A Kavanagh Family Trust T/A Ultra NDT Pty Ltd
(U2013/16351)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 22 JULY 2014

Summary: application for costs - findings on credit/balance of probability - evidence not known at time of application - application dismissed.

[1] On 22 April 2014 I issued a decision in [2014] FWC 2646 (“the prior decision”) in which I dismissed an application by Mr Charles Shelton (“the Applicant”) made under s.394 of the Fair Work Act 2009 (“the Act”).

[2] The Applicant had been seeking an unfair dismissal remedy in relation to his dismissal, as he contends it to be, on 12 November 2013 by Ultra NDT ATF The O & A Kavanagh Family Trust T/A Ultra NDT Pty Ltd (“the employer”).

[3] In the course of my decision I found that the Applicant had not been dismissed from his employment and concluded in the following manner:

[49] The Applicant, on the evidence before me, was engaged as a labour hire casual employee. His assignment came to an end for reason he was not permitted to return to the host or client’s work site owing to alleged work performance issues. Efforts were made by the employer to secure new assignments subsequently, but these proved unsuccessful. [...].

[50] The Applicant, therefore, was not dismissed at the initiative of the employer. The requirement of s.385(a) of the Act is therefore not made out. The application as made under s.394 of the Act therefore must be dismissed.

[4] Following the publication of the prior decision, the employer has made an application for costs under s.611 of the Act and s.400A of the Act, which I must now determine.

[5] Section 611 of the Act provides as follows:

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 ofthe 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).

[6] Section 400A of the Act provides as follows:

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.

[7] The background to this matter was set out in the prior decision as cited above, and is as follows:

[2] The Applicant had been employed [by the employer] since August 2012. He claims to have commenced work as a trades assistant with the employer and performed assignments as were available. The employer’s enterprise comprises (in part) a labour hire business (in addition to a non-destructive testing business).

[3] The majority of the Applicant’s assignments whilst employed by the employer were carried out at the Yarrabee coal mine. That is, the Applicant performed duties through the agency of his employer at Yarrabee mine through a number of discrete assignments.

[4] The employer contends that a number of performance and conduct issues arose between August and November of 2013 that caused the Yarrabee mine supervisor to form a view that it no longer required the Applicant to remain on its site. It so communicated its desire in this regard to Mr Owen Kavanagh, the owner/director of the employer’s business, in early November 2013.

[5] According to Mr Kavanagh, upon the employer being notified that the Applicant was not to perform further duties at the Yarrabee mine site, the Applicant remained on its books as an employee for whom it was waiting for a new assignment (that was consistent with the Applicant’s skills profile).

[6] In essence, therefore, Mr Kavanagh contends that the Applicant had never been dismissed from his employment, had never received a letter of dismissal as a consequence, and remained an employee at all times.

[7] More specifically, Mr Kavanagh claimed that on 12 November 2013, he conveyed to the Applicant that he had been informed by the maintenance superintendent at the mine site that he (the Applicant) was no longer permitted to be rostered at the mine.

[8] Mr Kavanagh claims that in the course of conveying that information to the Applicant he also indicated to the Applicant that, “we are looking for other work for you” with another host.

[9] Mr Kavanagh claimed that on 12 November 2013 he had attempted to secure alternative work for the Applicant with MacKellar Mining. He also stated that on the following day, 13 November 2013, he approached Leightons Contractors in an endeavour to find a new assignment for the Applicant. On 19 November 2013 he contacted Rolleston Coal seeking an assignment. And a few days later on 23 November 2013 he contacted Jellinbah Mine in an effort to find an alternative work assignment for the Applicant. All these contacts were in person and Mr Kavanagh was able to indicate the person with whom he spoke on each occasion.

[8] The prior decision concerned contested facts between the parties. One set of contested facts concerned whether or not the Applicant had been dismissed at the initiative of the employer - Mr Kavanagh. These contested facts were eventually resolved by way of findings of credit made in respect of the witness evidence:

[40] On the balance of probability, I prefer the evidence of Mr Kavanagh to the effect that he at no stage took the initiative to dismiss the Applicant from his employment.

[9] Another set of contested facts arose in relation to whether or not the Applicant had been employed as a casual employee or as a permanent part-time employee. That contest on the facts was also determined on the basis of a finding again made on credit:

[47] In all, Mr Kavanagh’s evidence was more dense by far than that of the Applicant. Mr Kavanagh was able to distinguish between various contractual arrangements with particular members of staff in particular parts of the business and to give reasonable explanations for the outcomes. By contrast, the Applicant’s evidence was at times very confusing and demonstrated an underlying uncertainty of mind about the basis of his application. The Applicant’s response to questioning in cross examination underscored this. I do not take the Applicant’s evidence to amount to intentional obfuscation, however.

[10] The application under s.394 of the Act was dismissed, subsequently, because the Applicant had not made out the requirements of s.385(a) of the Act (within the meaning of s.386(1) of the Act).

[11] The employer, by this application, now seeks the recovery of its costs incurred in defending the claim on grounds that the claim was made without reasonable cause, was vexatious, and it should have been reasonably apparent to the Applicant that his application had no reasonable prospect of success.

[12] The employer states that it put the Applicant on notice (on 3 February 2014) that it would make such an application, and did so well prior to the hearing of the matter. The employer also claimed that it offered to settle the matter on payment of $3000, but that this had been rejected.

[13] The Applicant’s case hinged on whether he was a permanent employee who had been dismissed at the initiative of his employer. The Applicant believed that there were certain circumstances that had arisen in the course of his employment which led him to believe he was a permanent employee, and that there was wider conduct by the employer that could be construed to mean that he had been dismissed from his employment.

[14] I found in the prior decision that there had been discussions about the Applicant’s employment status, and it is likely the case in my view he misinterpreted the import of those discussions. More importantly, there was evidence of a corroborative kind (led through Mr Tim Holden) which supported the Respondent’s argument that it never acted to dismiss the Applicant. The Applicant had been unaware of this corroborative evidence at the time he made his application. It was evidence that had to be tested, as well, in the course of the proceedings.

[15] As I have set out above, both these matters were determined on findings of credit. I can discern certain events in the evidence that caused the Applicant to reach the state of belief that he did. But equally, upon full exploration the factual situation was not as the Applicant believed.

[16] The matters were not determined on the illumination of certain facts that should have been reasonably known to the Applicant before such time as he made the application.

[17] Where a matter, such as this one, turns on the assessment of the credibility of witnesses on the part of a Commission member, it seems to me that the finding that either party acted unreasonably or with apparent disregard for obvious facts and otherwise should have sought to discontinue their actions, costs are unlikely to be spontaneously awarded.

[18] It is true that there will be cases where the findings of credit are particularly stark and one party’s case is wholly untenable, and reasonably should have been recognised as such.

[19] But here, the Applicant had an arguable case (at least) that was ultimately only extinguished upon the full hearing of the evidence of each of the witnesses, and then only upon the Commission making findings on the basis of the balance of probability. The evidence of Mr Holden also had to be tested, as it was unknown to the Applicant (at the time he made his application).

[20] The Applicant may indeed have been wiser to resolve the matter on the terms as offered in settlement by the employer. But that is an observation born of hindsight and was not evident on the facts as they were variously said to be at the time of the hearing, let alone when the application was made. Thus, I cannot find that the Applicant’s claim for relief was made without reasonable cause, was vexatious, and it should have been reasonably apparent to the Applicant that his application had no reasonable prospect of success.

[21] In such circumstances as I have set out above, I would not exercise my discretion to award costs.

Conclusion

[22] For the reasons given above I dismiss the application for an order for costs against the Applicant.

SENIOR DEPUTY PRESIDENT

Final written submissions:

Costs Applicant - 16 June 2014

Costs Respondent - 26 June 2014

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<Price code C, PR552910>