Mr Jeff Dickason v Endeavour Industries Pty Ltd
[2012] FWA 4687
•12 JUNE 2012
[2012] FWA 4687 |
|
DECISION |
Fair Work Act 2009
s.611 - Application for costs
Mr Jeff Dickason
v
Endeavour Industries Pty Ltd; Taylor Wooding (receivers and managers appointed) T/A Endeavour Industries Pty Ltd
Scott Irons
Jeff Irons
Ross Blakeley
Andrew Schwarz
Kieran Linton
(C2012/2432)
COMMISSIONER LEWIN | MELBOURNE, 12 JUNE 2012 |
Costs s.611- general protections - s.365 - conference - response - course of conduct in proceedings - vexatious - without reasonable cause - discretion
[1] This matter is an application for costs made under s.611 of the Fair Work Act 2009 (the Act). The application is made by Mr James Dickason in relation to proceedings brought by him under s.365 of the Act against Endeavour Industries Pty Ltd for whom he had been employed.
[2] In those proceedings Mr Dickason alleged that his employment was terminated by his employer contrary to the general protections provisions of the Act, as set out in Chapter 3, Part 3-1 thereof. Mr Dickason applies for an order against Taylor Wooding (receivers and managers appointed) T/A Endeavour Industries Pty Ltd and several natural persons presumably associated with Endeavour Industries Pty Ltd, on the ground that the respondents responded to the application vexatiously.
[3] The provisions of s.611 are set out below:
“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).
[4] In order to deal with the grounds upon which the application for costs is made it is necessary to set out a chronology of the proceedings conducted in relation to Mr Dickason’s application under s.365.
[5] The application was lodged in the Tribunal on 30 January 2012. The matter was listed for conference on 20 February 2012. Endeavour Industries Pty Ltd did not attend the conference. The reason for the non-attendance of Endeavour Industries Pty Ltd is referred to in submissions below made on behalf of the respondents and is not contested. Following the attempt at a conference pursuant to s.368 of the Act to deal with the application the Tribunal was advised that Taylor Woodings had been appointed receivers and managers of Endeavour Industries Pty Ltd.
[6] Subsequently, the matter was listed for conference on 2 March 2012. The receivers and managers were notified and did not attend.
[7] Mr Dickason attended both conferences with legal representatives.
[8] On 15 March 2012 Mr Dickason’s legal representatives lodged an application pursuant to s.611 of the Act seeking costs from the respondents due to the non-attendance at the conferences.
[9] On 26 March 2012 I issued a certificate pursuant to s.369 of the Act advising that I was satisfied that all reasonable attempts to resolve the dispute under s.365 of the Act have been, or are likely to be, unsuccessful. On the same day I issued directions to the parties requiring them to file submissions and evidentiary material on which they intended to rely regarding the application for costs made by Mr Dickason. I also advised the parties of my intention to deal with the application for costs without the need for an attendance hearing. No request for a hearing in person was made by any party.
[10] The applicant filed submissions in this matter on 10 April 2012 and Thomsons Lawyers filed a response on 23 April 2012 on behalf of the respondents.
[11] It is useful to set out an extract from written submissions filed on behalf of Mr Dickason in support of the application for costs.
‘9. Considering the statutory provisions of section 611 of the FW Act, the Applicant submits as follows:
(a) The Applicant accepts that generally, a party must bear their own costs in relation proceedings before FWA. However, section 611(2) provides an exception to that general rule where a respondent has “responded” to an application “vexatiously” or “without reasonable cause”. In such circumstances, FWA may order a respondent to bear some or all of the costs of an applicant in relation to an application to FWA.
(b) Section 611(2)(a) applies where a respondent “responded to an application, vexatiously or without reasonable cause”. The Applicant submits that the act of deliberately choosing to ignore, refuse to participate in, avoid or otherwise deliberately not attend the First Conference and/or the Second Conference constitutes a response for the purposes of section 611(2) of the FW Act because:
(i) Despite the fact that the Form F8A Employers Response to Application for FWA to Deal with a General Protections Dispute (Response) was filed and served on behalf of the First Respondent on 8 February 2012, the First Respondent’s obligations to respond under the FW Act did not stop there. Section 368 of the FW Act requires that: “If an application is made under section 365, FWA must conduct a conference to deal with the dispute”. The word “must” expresses obligation and necessity which implies that the parties must attend the
conference. Attendance at the mandatory conference is a necessary part of the process of responding to an applicant’s general protection application. If it were not, then like section 374 of the FW Act, the parties would be given the option of whether they agreed to participate in a conference to deal with the dispute. It was not open to the Respondents to not attend the First Conference and/or the Second Conference.
(ii) Not responding is an action. It is an active state. A wilful act is involved in not responding to something. The conduct of ignoring refusing to participate in, avoiding or otherwise deliberately not attending an event constitutes acts which amount to a response. That is, the response is a deliberate decision to not respond.
(c) The Applicant submits that by ignoring, refusing to participate in, avoiding or otherwise deliberately not attending the First Conference and/or the Second Conference before FWA, the Respondents engaged in a pattern of behaviour that responded to the Applicant’s General Protections Application vexatiously.
(d) The Respondents’ conduct was vexatious because it was open to the Respondents to notify the Applicant and/or FWA of their intention not to appear at the First Conference and/or the Second Conference for whatever reason, but no notification was provided to the Applicant or FWA. By virtue of section 368 of the FW Act, conferences are mandatory if an application is made under section 365 of the FW Act. If the Respondents did not want to attend the First Conference and/or the Second Conference they could have written to the Applicant’s solicitors or asked for FWA to make a recommendation, or express an opinion instead of dealing with the Applicant’s dispute by conciliation (see Note 2 at section 368(1) of the FW Act). Instead, the Respondents allowed the Applicant to incur costs on two occasions by preparing for and attending the First Conference and the Second Conference and have provided no credible evidence of the reason for the non-attendance.
(e) By deliberately not attending the First Conference and/or the Second Conference, the Respondents chose to defy the statutory requirement that they must attend a mandatory conference convened by FWA under section 368 of the FW Act. Deliberately contravening an obligatory statutory requirement is necessarily vexatious.
(f) It is telling that the Commissioner’s Associate had a number of communications with some of the Respondents about the Second Conference, in particular with the Seventh Respondent. It is contended that the failure to attend, at least the Second Conference, was vexatious within the meaning of section 611 of the FW Act and the case law as outlined below.’
[12] The submissions in response on behalf of the respondent’s include the following:
‘Costs - Section 611 and Statutory Interpretation
43. It is a basic rule of statutory interpretation that legislative provisions are to be construed according to their natural and ordinary meaning, unless that would lead to a result that the legislature must be taken not to have intended (see Amalgamated Society of Engineers v Adelaide Steamship Co Ltd (1920) 28 CLR 129).
44. Section 611(2) of the FW Act clearly only applied in circumstances where the substantive application or response is made “vexatiously or without reasonable cause” or alternatively has “no reasonable prospects of success”. Section 611(2) of the FW Act does not expressly refer to, nor does it include conduct in the course of a proceeding.
45. As noted above, the WR Act included a broader range of exception to the no-cost jurisdiction. In particular, section 658 of the WR Act expressly allowed a party to obtain costs in the following circumstances:
“2 If the Commission is satisfied that a party (first party) to a proceeding relating to an application under section 643 [which dealt with termination of employment] has acted unreasonably in failing:
(a) to disclose the proceeding; or
(b) to agree to terms of settlement that could lead to the discontinuance of the application;
The Commission may, on an application under this section by the other party to the proceeding, make an order for costs against the first party.
(3) If the Commission is satisfied:
(a) that a party (first party) to a proceeding relating to an application made under section 643 caused costs to be incurred by the other party to the proceeding; and
(b) that the first party caused the costs to be incurred because of the first party’s unreasonable act or omission in connection with the conduct of the proceeding;
The Commission may, on an application by the other party under this section, make an order for costs against the first party.”
46. Paragraph 6 of the Applicant’s Submissions correctly notes the distinction between the WR Act provisions and the FW Act. However, contrary to paragraphs 7 and 8 of Applicant’s Submissions, it is submitted that if it was Parliament’s intention to allow costs where a party caused another party to incur costs because of an unreasonable act or omission by the first party in the course of the proceeding (our emphasis), Parliament would have re-enacted the relevant provisions of section 658 of the WR Act.
47. It is not the place of a court or a tribunal to extend the express provisions of an Act where that is clearly not Parliament’s intention. This is acknowledged in relation to section 611(2) of the FW Act in the recent FWA decisions in Cartledge and Ford.
48. Further, in response to paragraph 9(b)(ii) of the Applicant’s Submissions, it is submitted that section 611(2) of the FW Act only deals with a positive “response” rather than an omission. Had Parliament intended the Act to cover an omission by a party this could have been clearly specified, as was the case in section 658(3) of the WR Act.
49. Section 611(2) of the FW Act does not cover conduct in the course of a proceeding by either the respondent or the applicant, including attendance at a conciliation conference. Accordingly, the costs application should be dismissed.
Costs - Vexatiously, without reasonable cause or not reasonable prospect of success
50. Even if the Commissioner finds that “responded” in section 611(2) of the FW Act includes a consideration of the parties’ conduct throughout the proceeding (which Endeavour and TW submit is not supported by the express provisions of the FW Act and case law), neither Endeavour nor TW has acted “vexatiously or without reasonable cause”. Further, the Response does not have “no reasonable prospect of success”.
51. As confirmed in the decision in Holland v Nude, at para [38]:
“The question of whether an application was made vexatiously is answered with reference to the motive of the applicant, and requires consideration of whether the predominant purpose is to harass or embarrass the other party, or to gin a collateral advantage, rather than seeking adjudication on issues to which the application gives rise. An application may also be vexatious where regardless of the motive of the applicant it is so obviously untenable or manifestly groundless as to be utterly hopeless.”
52. There is no allegation that the Response was manifestly groundless or utterly hopeless”. Further the Applicant has not alluded to any conduct of Endeavour or TW which demonstrates that either of them has acted with an intention to harass or embarrass the Applicant or to gain a collateral advantage.
53. From 1 February 2012, Thomsons Lawyers was on the record as acting for Endeavour, but was not notified of the First Conference by FWA. This was an administrative oversight. There was no deliberate non-attendance at that conference and therefore there was no intention to gain a collateral advantage or to harass or embarrass the Applicant.
54. On 22 February 2012, TW notified FWA that it had been appointed receiver and managers of Endeavour. The Applicant was also advised of the receivers and managers’ appointment on 23 February 2012.
55. On 29 February 2012, Thomsons Lawyers as representatives of Endeavour notified FWA and the Applicant’s representative of their formal withdrawal from the proceeding.
56. By 2 March 2012, the Applicant was on notice that Endeavour was suffering serious financial hardship, as demonstrated by the appointment of the receivers and managers, who were without legal representation in the Proceeding. The non-attendance at the Second Conference was clearly not intended to gain a collateral advantage or to harass or embarrass the Applicant.
57. In any event, neither Endeavour nor TW were obliged to attend the conciliation conferences and the Applicant remained entitled to proceed with the conciliation conference and seek a certificate from FWA. Given the circumstances, the Applicant has not demonstrated vexatious conduct by Endeavour or TW.’
Characterisation of vexatious - interpretation and application of statutory provisions
[13] In the case of Nilsen v Loyal Orange Trust 1 (Nilsen)North J a judge of the Industrial Relations Court of Australia determined an application for an order for costs under s.347 of the Workplace Relations Act 1996 which included the following provisions:
“347. (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.”
[14] While the case concerned an application for costs against the party instituting the proceedings, I consider the guidance nevertheless apt in relation to the question of determining an application for costs under statutory provisions of substantial similarity in relation to the actions of a respondent party.
[15] In Nilsen North J stated the following:
“In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 274, Northrop J said, in relation to a predecessor of s 347:
“Great care must be exercised to ensure that in finding that a party has instituted proceedings vexatiously or without reasonable cause, that party is not improperly deprived of his freedom from liability to pay costs to an opposing party. The test is a substantial one.”
In Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467, at 470, the Full Court of the Federal Court said:
“It is apparent from these authorities that an applicant who has the benefit of the protection of s 347 will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances.”
[16] Later His Honour said as follows:
“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: see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.”
Consideration - Response
[17] In this matter it is necessary to first consider what is comprehended by the meaning of the word response in the relevant statutory context of s.611. It is pertinent to note that there seems to be no authority determined in relation to this question. Some single member decisions of Fair Work Australia are referred to in the submissions, which go to the construction to be applied to the word response in the relevant statutory context. It seems to me that to isolate the word response and to exclusively and unconditionally characterise a response as a formal expression of a position in relation to the jurisdiction of the Tribunal, the merits of an application or any offer of settlement is questionable. In my view, the decisions referred to by the respondents are problematic for not having been decided in relation to whether a particular course of conduct could be properly considered vexatious or without reasonable cause. This is because the decision makers have voided such consideration by focusing on limited and particular definitions of what will constitute a response for the purpose of the relevant statutory provision.
[18] For myself I think it necessary to consider whether the particular actions of a party fall within the compound meaning of a vexatious response, either of commission or omission, of position, expression of intention, avoidance of participation in proceedings or all three, as well any other relevant consideration.
[19] In Cartledge 2 the question of whether an act of omission could be considered vexatious was not argued or determined. The content of that decision relied upon by the respondents is by way of observation, comparing distinct provisions of different legislation which addressed an inherent misconception of the applicable legislation in the case, on the part of the applicant for costs in that matter. The observations referred in Cartledge concerned the costs provisions of the WR Act which referred to unreasonable acts or omissions, rather than what would constitute a vexatious response to an application.
[20] I respectfully disagree with the conclusion in Ford 3 that abstention from proceedings under the Act cannot, under any factual circumstances, constitute a response for the purposes of s.611, if indeed that is what the decisions stands for.
[21] Accordingly I am not convinced that conduct by a respondent in the course of proceedings in relation to an application under s.365 can be excised totally from the ordinary meaning of what might be a vexatious response in the relevant statutory context. In my view, the facts will determine the question in any particular case. For example, a respondent who deliberately failed to attend a conference held as a result of an application under s.365 and who announced a contemptuous and obdurate refusal to participate in proceedings under the Act would, in my view, be behaving in a manner worthy of characterisation as a response to such an application. In my view, such conduct may be viewed as vexatious. The intention and effect of the conduct would likely vex the applicant and may lead to steps being taken to compel the necessary attendance of the respondent. The conduct of the respondent would achieve little or nothing else but vexation, having regard to the nature of the proceedings, which I refer to further below. Such conduct may, but would not necessarily, impose costs upon an applicant in obtaining the utility of the conference and a certificate pursuant to s.369, in order to make a general protections court application pursuant to s.371.
[22] On the other hand failure to attend a conference by reason of misinformation, misadventure, mistake or relevant and unforeseen circumstance would not be vexatious.
Vexatious conduct by the respondents?
[23] Accordingly, I must consider whether in the factual circumstances of this case the failure of the respondents to attend the conferences on 20 February 2012 and 2 March 2012 can be construed as a vexatious response comprised of action of abstention, the purpose of which was to harass, embarrass or annoy Mr Dickason or gain some collateral advantage.
[24] There is nothing before me that would suggest that this intention is evident in the failure of the respondents to attend the conferences. It is uncontested that the non-attendance of any of the respondents at the first conference was caused by administrative error. On the facts of the matter, it would seem that the reason the administrators did not attend the second conference was due largely to the failure of the company, the appointment of receivers and managers and the particular and unusual set of circumstances generated thereby, which would no doubt include consideration of the expenditure of whatever resources were available to the administrators in order to do so. In my view, the motivation and purpose of the respondent’s non-attendance was more likely than not related to the receivership of the company rather than to vex Mr Dickason or gain a collateral advantage.
Discretion
[25] Had I been satisfied that the respondents had responded vexatiously in relation to the application it would have been necessary to consider whether or not to exercise the discretion provided by s.611. If I were wrong in my conclusion in this respect I would not, nevertheless, exercise the discretion to award costs against the respondents.
[26] There is a clear and strong presumption against the provision of costs in relation to proceedings under the Act as a part of the statutory scheme, other than in what might be described as narrowly defined exceptional circumstances. Conferences conducted under s.368 are not proceedings which lead to a determination of the legal rights, duties or obligations of a party to an application under s.365. Rather, the outcome is either an agreement between the parties of their own choosing or the issuance of a Certificate pursuant to s.369, which is a pre-requisite to a general protections court application.
[27] An applicant under s.365 should expect to attend such a conference for this purpose. It is not necessary for an applicant to be legally represented in such proceedings in order to obtain the Certificate. Legal representation in such proceedings is a matter of preference. The failure of the respondents to attend the first conference did not lead to the costs incurred by Mr Dickason on that occasion. Mr Dickason would have attended that conference with his chosen representatives in any event. It follows that any issue of costs in this matter should logically be confined to the non-attendance of the administrator at the second conference.
[28] It would seem to me that the irresistible inference in relation to the non-attendance at the second conference is that the administrators decided not to incur the expense of doing so having regard to their administrative function in relation to the available resources of the company.
[29] Accordingly, on what is before me, in all the relevant circumstances, I would not exercise the discretion to award costs against the administrator or any of the respondents in relation to the second conference. In my view, the unusual and straightened circumstances of the company, its administration, the nature of the conference, the scheme of the legislation and the relevant volition involved in choosing to be legally represented on Mr Dickason’s part are such that the statutory presumption that each party will bear their own costs in proceedings before the Tribunal would weigh against the exercise of the discretion.
[30] As a matter of observation, I note that Mr Dickason did not identify the basis upon which the natural persons named as respondents to the costs application could be considered properly liable for the costs sought by the application.
Respondent’s application for costs
[31] The respondents have made an application under s.611 that Mr Dickason be ordered to meet their costs in relation to their response to Mr Dickason’s application for costs. This application is without merit.
[32] Mr Dickason’s application for costs cannot be described as vexatious. The application is directed exclusively at recovery of costs of a proceeding under the Act and depends upon the characterisation of the respondent’s failure to attend or non-attendance at conferences conducted by the Tribunal. The determination of the application is a matter of judgement of the facts by the Tribunal and, potentially, the exercise of an unconditioned statutory discretion. There is no evidence upon which it may be concluded that Mr Dickason made his costs application in order to harass, annoy or embarrass the respondents. Moreover, Mr Dickason gains no collateral advantage from his application for costs.
[33] Nor can Mr Dickason’s application be characterised as without reasonable cause. Mr Dickason’s application for costs was arguable at the time it was made. I have found that the responsive behaviour of a party against whom an application under s.365 is made, in the course of the conduct of proceedings, can, depending upon the relevant facts, give rise to the power to award costs. The question of whether such an order would be made is, as previously observed, a matter of discretion, at large.
[34] Had the Tribunal determined the mixed questions of fact and law in the proceedings in favour of Mr Dickason it was open to the Tribunal to exercise a discretionary power in favour of the application.
[35] The applications are therefore dismissed and orders will issue accordingly.
COMMISSIONER
1 Nilsen v Loyal Orange Trust (ACN 004 245 694) [1997] IRCA 267 (11 September 1997)
2 Cartledge v Creasy’s Pty Ltd T/A Gold Sovereign Motor Inn[2010] FWA 7113.
3 Ford v Fish Liquor Pty Ltd T/A Marina Quay International [2011] FWA 785.
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