Mr George Panagiotidis v Loleta Holdings Pty Ltd T/A Five Star Automotive Services
[2023] FWC 937
•11 APRIL 2023
[2023] FWC 937
The attached document replaces the document previously issued with the above code on 20 April 2023.
MNC Amended
Print number Amended
Track changes turned off
John Cullen
Associate to Deputy President Cross
Dated 27 April 2023
| [2023] FWC 937 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal
Mr George Panagiotidis
v
Loleta Holdings Pty Ltd T/A Five Star Automotive Services
(C2022/5998)
| DEPUTY PRESIDENT CROSS | SYDNEY, 11 APRIL 2023 |
Application to deal with contraventions involving dismissal – costs application – application dismissed.
Mr George Panagiotidis (the Applicant) made an application (the Application) to the
Fair Work Commission (the Commission) under s 365 of the Fair Work Act 2009 (Cth) (the
Act) for the Commission to deal with a dispute arising out of his allegations that
he had been dismissed from his employment with Loleta Holdings Pty Ltd T/A Five
Star Automotive Services (the Respondent) in contravention of Part 3-1 of the Act.
In response to the Application, the Respondent raised the jurisdictional objection that
the Application was filed out of time as, it alleged, the dismissal took effect on 8 August 2022, and not 9 August 2022 as alleged by the Applicant. If the dismissal took effect on 8 August 2022, the Application was filed one day out of time as pursuant to s.366(1) of the Act, General Protections applications involving dismissal must be made within twenty-one (21) days after the dismissal took effect.
On 2 March 2023, I delivered my decision on the jurisdictional objection wherein I dismissed the jurisdictional objection on the basis that I found the dismissal occurred on 9 August 2022.
On 16 March 2023, the Applicant filed a Form F6 Application for costs (the Costs Application). The Costs Application sought costs pursuant to s.375B, costs against parties in general protections matters, and s.611, the general provision in relation to costs, of the Act.
On 22 March 2023, in an attempt to limit the costs associated with the overall litigation in this matter, I issued directions that only imposed an obligation on the Applicant to file materials in support of the Costs Application. I indicated that I would consider whether I would require the Respondent to file materials after considering the Applicant’s further materials.
On 5 April 2023, the Applicant filed a document titled “Applicant’s Outline of Submissions on Costs Applicant” (the Applicant’s Submission). The Applicant’s Submission did not materially deviate from the Costs Application, and vastly repeated its contents word for word. In that circumstance, I did not consider it necessary to call on the Respondent to make any submissions in order to determine the Costs Application.
The Costs Application
The Applicant contended that the Respondent’s jurisdictional objection:
(a) Should have been reasonably apparent to the Respondent as one with no reasonable prospects of success, contemplated in section 611(2)(b) of the Act; and/or
(b) Constituted an unreasonable act or omission which caused the Applicant to incur costs in connection with the conduct or continuation of the matter, as contemplated in section 375B of the Act.
The Applicant highlighted that the Respondent was required to engage with the Applicant’s material on three occasions, being:
(a) On 29 December 2022, when the Applicant’s submissions and materials were filed;
(b) On 25 January 2023, when a letter from the Applicant to the Respondent responding to the materials filed by the Respondent, and threatening a costs application, was sent; and
(c) On 31 January 2023, when the Applicant’s material in reply was filed.
The Applicant submitted that each of the above circumstances enlivened the Commission’s power to make an order for costs against the Respondent.
The Relevant Facts
On 8 August 2022, the Applicant had a dispute at the Respondent’s premises with Mr Lozides, a Director of the Respondent, and left the workplace at around 8.30am.
On 8 August 2022 at approximately 4.50pm, Mr Lozides and Mr Vassiliadis, another Director, drove to the Applicant’s last known address at 128 Fitzgerald Avenue Maroubra, where Mr Lozides hand delivered a termination letter at 4.50pm (the Termination Letter) to the letterbox at that address.
At 2.02 pm on 9 August 2022, the Applicant received a text message from Mr Loizides
which said:
“We advise you that your employment with five star automotive services has been
terminated for serious misconduct of your behaviour yesterday and that your
termination letter was delivered to your nominated address at 128 Fitzgerald Avenue
Maroubra – regards Larry.”
On 9 August 2022, after receiving the text message, the Applicant telephoned his father, and asked him to check his mailbox at 128 Fitzgerald Avenue Maroubra, New South Wales. The Applicant’s father confirmed that there was a letter for him at that address.
While the Respondent was aware that the Applicant did not actually live at 128 Fitzgerald Avenue Maroubra, and instead lived in Mortdale or Bexley, it was agreed between the parties at the hearing of the jurisdictional objection that 128 Fitzgerald Avenue Maroubra was the Applicant’s nominated address for receiving post.
The Applicant filed his general protections application on 30 August 2022. If the dismissal date was 8 August 2022, the Application would have been lodged outside of the time prescribed, and one day after the last day on which such an application could have been made. Alternatively, if the dismissal date was 9 August 2022, the Application would have been lodged within time.
On 27 September 2022, the Respondent filed a response to the Application that raised a jurisdictional objection to the determination of the Application on the basis that the application was filed out of time.
On 24 January 2023, and following the Respondent filing its evidence and submissions, the Respondent by email invited the Applicant to settle the Application on the following terms:
(i) The Applicant discontinue the Application; and
(ii) The Respondent provide consent to the discontinuation of the Application and seek no order against the Applicant for costs.
On 25 January 2023, the Applicant wrote to the Respondent and warned the Respondent that the letter may be relied upon to support an order for costs, due to the Respondent’s material as filed:
(i) Being insufficient to support its jurisdictional objection;
(ii) Failing to engage with the Applicant’s submissions and reliance on Mohammed Ayub v NSW Trains[1](“Ayub”) regarding an employee’s ‘reasonable opportunity’ to become aware of their dismissal; and,
(iii) Seeking to rely on the Small Business Fair Dismissal Code to support an out-of-time jurisdictional objection in a general protections application.
On 30 January 2023, the Applicant filed its material in reply.
On 31 January 2023, I heard the jurisdictional objection, and on 3 March 2023, delivered my decision on the jurisdictional objection (the Decision) that dismissed the jurisdictional objection. In the Decision, reliance was placed upon Ayub regarding what constituted a reasonable opportunity for the Applicant to become aware of his dismissal.
Applicant’s Submissions
There were four overlapping bases advanced for the cost’s orders sought, being initiation of the jurisdictional objection, persistence with the jurisdictional objection, the Respondent disregarding a costs warning about the jurisdictional objection, and continuation of the jurisdictional objection. In essence, the Applicant’s case was that making and persisting with the jurisdictional objection was both:
(a) An unreasonable act (s.375B); and
(b) Occurred when it was evident that it had no reasonable prospect of success (s.611(2)(b)).
The Applicant noted that the Application referred to the text message received by the Applicant on 9 August 2022, which indicated that the Applicant’s employment had been terminated. That text message referred to a termination notice having been placed in the letter box of the Applicant’s “nominated address”, as opposed to being physically handed to either the Applicant or another person.
The Applicant submitted that a rudimentary review of the authorities in the Commission’s Case Law Bench books, particularly Ayub, would have objectively provided the Respondent, particularly one represented by an industry association as the Respondent was, with sufficient information on which they would have determined that the jurisdictional objection was unreasonable and/or had no reasonable prospects of success.
The Applicant further submitted that when the Applicant filed his material on 29 December 2022, the Respondent had a second opportunity to review the circumstances of the case in light of the jurisdictional objection it had raised and appropriately discontinue it. The Applicant’s witness evidence reiterated that no person had been served with the termination letter and that the first opportunity afforded to the Applicant to discover that his employment had been terminated was on 9 August 2022 by text message.
The costs threat letter issued to the Applicant by the Respondent on 24 January 2023, was also submitted to be an unreasonable act, and the subsequent correspondence from the Applicant to the Respondent on 25 January 2023, which directly referred to Ayub, was relied upon as another opportunity for the Respondent to consider the reasonableness and/or prospects of success of its jurisdictional objection.
Lastly, the Applicant submitted that on 30 January 2023, when the Applicant filed and served his material in reply, the Respondent was provided with a further opportunity to assess its position in respect to the jurisdictional objection and its unsustainability. The reply material, again referred to and relied upon Ayub. The Respondent either knew or ought to have known that there was no factual or legal basis for its jurisdictional objection, and its actions in raising and maintaining the objection put the Applicant to unreasonable costs.
The Applicant sought to place reliance on the fact the Applicant is what it described as a “self-funded litigant”, while the Respondent is represented by a registered trade organisation, exempt from the imposition of personal costs orders.
The Applicant sought costs on an indemnity basis, or in the alternative on a party/party basis. No submission was advanced in support of the application for indemnity costs.
Legislative Provisions
Section 375B provides:
(1) The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:
(a) an application for the FWC to deal with the dispute has been made under section 365; and
(b) 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 dispute.
(2) The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.
(3) This section does not limit the FWC's power to order costs under section 611.
Section 611(2)(b) provides:
(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.
The Commission’s power to order costs is a discretionary power enlivened by a conclusion that a party “caused… costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the dispute”, and/or “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.”
Consideration
The ‘general rule’ in relation to costs of proceedings before the Commission is that each person involved in a matter, must bear their own costs. This statutory imperative is derived from the policy imperative that a person is entitled to make, or defend an application made under the Act, without the risk that a costs order may be made against them.
While s.611 of the Act sets out the general rule, subsection (2) makes obvious that there are exceptions to that rule in certain circumstances, including the circumstance relied upon by the Applicant that it should have been reasonably apparent to a person who responded to an application had no reasonable prospects of success.
Satisfaction of s.611(2)(b) may be established at various points of time during the progress of a matter before the Commission, when it becomes reasonably apparent that the person’s application, or response to the application, has no reasonable prospects of success. In Sharkey v Life Without Barriers[2] the Full Bench of the Commission observed:
In some cases it will be objectively apparent that at a particular point in time an application or a response is doomed to failure. In terms of applications, such cases include circumstances where on the facts pleaded, the party’s application or response cannot succeed or where the response to an application sets out facts which are undisputed or cannot be disputed, upon which it is apparent that the application being responded to cannot succeed. However, where there are disputed facts which can only be resolved at hearing, which if resolved in favour of a particular party would raise an arguable case – either in support of or opposition to an application – it is unlikely that a party who presses on and seeks that the Commission rule on disputed facts is acting unreasonably.
However, the Commission retains an overall discretion as to whether an order of costs should follow, and such discretion should be exercised judicially, and in a manner which is “fair and just” and takes into account “equity, good conscience and the merits of the matter”.[3]
(a) No Reasonable Prospects of Success
The High Court in Spencer v Commonwealth of Australia[4], considered the meaning of the phrase “no reasonable prospects of success”, albeit in the context of s 31A of the Federal Circuit Court of Australia Act 1976 (Cth). The plurality (Hayne, Crennan, Kiefel and Bell JJ) observed:
In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous", "untenable", "groundless" or "faulty". But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word "reasonable", in the phrase "no reasonable prospect", be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a "frivolous", "untenable", "groundless" or "faulty" claim.
Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.
In Baker v Salva Resources Pty Ltd[5], the Full Bench of the Commission observed:
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.
(b) Unreasonable Act in Connection with the Continuation of the Matter
The Explanatory Memorandum that accompanied the insertion of s.375B into the Act provided:[6]
58. The power to award costs under new section 375B is not intended to prevent a party from robustly pursuing or defending a general protections dispute before the FWC. Rather, the power is intended to address the small proportion of litigants who pursue or defend disputes in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.
59. The FWC’s power to award costs under subsection 375B(1) 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.
60. 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.
(c) Indemnity Costs
The principles to be applied to costs applications on an indemnity basis, involve a considerable degree of caution, and such costs orders are rare and unusual. In Dye v Commonwealth Securities Limited (No 2)[7], Buchanan J identified one of the foundations for an order of indemnity costs may be on the basis of the findings made in the earlier judgment that the applicant’s case was, in all relevant aspects, based on a falsehood. His Honour said:
Each of these foundations appears to me to provide a sufficient basis for the award of indemnity costs from the dates specified. As to the first basis upon which indemnity costs have been sought, it is well-established that indemnity costs are not awarded as a punishment against an unsuccessful litigant. However, they will be awarded in appropriate cases to protect a respondent from the financial burden of proceedings which were unjustified and should not have been commenced. Each of the proceedings commenced by the applicant falls, in my view, into this category. In the present case, the lack of merit in each of the proceedings is so marked, and the claim for protection by the respondents against unwarranted financial burden is so well-founded, that there is a sufficient justification for the award of indemnity costs with respect to the whole of each of the proceedings, subject to an issue to which I will return concerning the basis on which the Supreme Court proceedings were transferred to this Court. It is not necessary for me to repeat here the findings which were made in the earlier judgment. The proceedings were, in each case, based on falsehood and were without any legal substance. The respondents are entitled to claim that they should be relieved, so far as an order for costs would achieve this, from the financial burden of defending them.
[Emphasis added]
(d) Conclusions
There is no basis upon which to challenge the initiation of the jurisdictional objection by the Respondent. The Respondent had personally delivered the termination letter to 128 Fitzgerald Avenue Maroubra, which the parties in the hearing agreed was the Applicant’s nominated address for receiving post, on 8 August 2022, albeit at approximately 4.50pm. On the basis of such delivery it was unremarkable that the Respondent considered the Application out of time when it was filed on 30 August 2022. That termination on 8 August 2022, was confirmed in the text message of 9 August 2022.
In the Form F8A Response to general protection application, the Respondent outlined the basis of the jurisdictional objection. That basis, which has not been fully outlined in the Applicant’s Submission, included the following:
3. Section 117(1)(b) of the Fair Work Act 2009 and section 28A(1)(a)(ii) of the Acts Interpretation Act 1901 provide that notice of termination may be delivered by leaving it at “the address of the place of residence or business of the person last known to the person serving the document”.
While the Applicant places significant reliance on Ayub, asserting that a “rudimentary review” of it and other authorities would have objectively provided the Respondent with sufficient information on which to determined that the jurisdictional objection was unreasonable, it is notable that Ayub itself refers to s.117 of the Act, as follows:[8]
At least in relation to dismissals on notice, support for the conclusion that s.394(2)(a) is to be read as requiring the communication of a dismissal to the employee for it to take effect is derived from s.117(1), which is part of the National Employment Standards provisions concerning termination of employment and redundancy. It provides (underlining added):
Notice specifying day of termination
(1) An employer must not terminate an employee's employment unless the employer
has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).Note 1: Section 123 describes situations in which this section does not apply.
Note 2: Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a
notice may be given. In particular, the notice may be given to an employee by:(a) delivering it personally; or
(b) leaving it at the employee's last known address; or
(c) sending it by pre-paid post to the employee's last known address.
Section 117(1) prohibits a termination of employment to which it applies taking effect before the day on which notice of the termination is given. Section 123 has the effect of excluding from the operation of s.117(1), among other things, employees dismissed for
serious misconduct and casual employees. These exceptions are ones in relation to which the common law does not require a period of notice of termination to be provided. However s.117(1) establishes that a termination of employment cannot occur by way of a retrospective notice. [Emphasis added]
While the Full Bench in Ayub went on to find that the mere delivery of a document to an employee’s usual address notifying the employee of his or her dismissal would not of itself constitute communication of that dismissal, and so the time at which the dismissal took effect, if the circumstances were that this did not constitute a reasonable opportunity for the employee to actually read the document[9], that observation did not preclude the Respondent’s reliance on at least actual delivery of the termination letter. Indeed, in the Respondent’s Submission at the hearing of the jurisdictional objection, reliance on s.117(1)(b) of the Act, s.28A of the Acts Interpretation Act 1091, and the delivery to the Applicant’s last known address were repeated.
In the correspondence from the Applicant to the Respondent on 25 January 2023, which directly referred to Ayub and which was relied upon as another opportunity for the Respondent to consider the reasonableness and/or prospects of success of its jurisdictional objection, it is notable that the Applicant, after referring to Ayub, put to the Respondent the following:
7. We indicate that even if the Respondent’s evidence is accepted, which provides
that the Applicant’s termination letter was hand-delivered to his father’s house at
4:50 PM on 8 August 2022, this is unlikely to be sufficient to constitute a
reasonable opportunity to become aware of the termination.8. Even if the Commission was to accept that the termination letter constituted
immediately effective dismissal, it remains that no evidence has been filed by the
Respondent indicating that its delivery was brought to the attention of the Applicant
until later.[Emphasis added]
The above characterisation by the Applicant falls well short of establishing that there was no factual or legal basis for the jurisdictional objection, and/or that the Respondent’s its actions in raising and maintaining the objection put the Applicant to unreasonable costs. The Applicant clearly, from his subjective view, considered it possible that there could be a conclusion that there was a reasonable opportunity for the Applicant to become aware of the termination. Such contemporaneous observation stands in contrast to the submissions now advanced by the Applicant.
There is no basis to submit that the Respondent, at any relevant time, had no reasonable prospect of success, or that the Respondent defended the dispute in an unreasonable manner. Available arguments were advanced by the Respondent that were ultimately not accepted by the Commission, but those arguments were not manifestly untenable or groundless, or so lacking in merit or substance as to be not reasonably arguable.
The Applicant’s costs application is dismissed.
DEPUTY PRESIDENT
[1] [2016] FWCFB 5500 at [36].
[2] [2019] FWCFB 7644, at [73].
[3] Sections 577 and 578 of the Act.
[4] (2010) 241 CLR 118, at [59] and [60].
[5] [2011] FWAFB 4014, at [10].
[6] Explanatory Memorandum to the Fair Work Amendment Bill 2013, at [58] to[60].
[7] [2012] FCA 407, at [5].
[8] [2016] FWCFB 5500 at [39] and [40].
[9] Ayub at [42]
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