Mr Peter Viavattene v Health Care Australia

[2013] FWC 6648

[2013] FWC 6648

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Mr Peter Viavattene
v
Health Care Australia
(C2013/3139)

DEPUTY PRESIDENT ASBURY BRISBANE, 24 SEPTEMBER 2013

Unfair dismissal appeal - permission to appeal refused - application for costs.

Background

[1] This decision concerns an application for costs made under s.611 of the Fair Work Act 2009 (the Act) by Healthcare Australia Pty Ltd (Healthcare Australia) against Mr Peter Viavattene. Costs are sought in relation to Mr Viavattene’s unsuccessful appeal 1 against a decision of Commissioner Booth dismissing his application for an unfair dismissal remedy2.

[2] Healthcare Australia indicated that it sought an order for costs in its submissions in the appeal. Mr Viavattene made no submissions in reply and the hearing and determination of the application for costs was remitted to the Commission as presently constituted. Healthcare
Australia was directed to advise the Fair Work Commission (FWC) and Mr Viavattene whether it wished to pursue the application for costs, within 7 days of the date of the Decision in the appeal.

[3] Healthcare Australia filed an application for costs using Form F6. On 2 May 2013, Mr Viavattene also filed a document headed “Form F6 Application for Costs”. It was unclear whether the document filed by Mr Viavattene was intended to be a counter application for an order for costs against Healthcare Australia, or whether it was a response to the application for costs made by Healthcare Australia.

[4] Directions were issued requiring Healthcare to file and serve written submissions and statements of evidence from any witnesses upon which it sought to rely in relation to the application for costs. The Directions also required Mr Viavattene to file and serve material in response, and to clarify whether he was seeking an order that Healthcare Australia pay his costs. Mr Viavattene advised that he was not seeking an order that Healthcare Australia pay his costs, but rather was seeking that the application for costs made by Healthcare Australia be dismissed.

Legislative Provisions

[5] The grounds upon which the FWC may exercise its discretion to make an order for costs in relation to an appeal, are set out in s.611 of the Act 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 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).”

Grounds for costs application

[6] The grounds upon which Healthcare Australia seeks costs are set out in the application as follows:

● The appeal was commenced vexatiously or without reasonable cause, because it should have been apparent to Mr Viavattene, having regard to his conduct during the hearing of the Application, that the grounds of appeal were unmeritorious and ill conceived, and were also factually inaccurate.

● On an objective basis it should have been apparent to Mr Viavattene that the appeal had no reasonable prospects of success because the appeal grounds were not supported by any evidence or submissions that were capable of meeting the statutory requirements outlined in s.400 of the Act.

[7] Healthcare Australia states that whilst it determined not to press for costs in the original application, Mr Viavattene’s conduct and continued disregard for the legislative parameters of unfair dismissal laws has put the Respondent to considerable expense, in circumstances where Mr Viavattene knew, or ought to have known that his appeal was without merit. Healthcare Australia further states that it has incurred significant legal expenses in preparation for and responding to the appeal and the exact figure for legal costs to date is estimated to be $15,000.00 excluding the cost of preparing the present application.

[8] In support of the costs application, Healthcare Australia submits that the original application was dismissed on the basis that it had no reasonable prospects of success, and that the appeal decision noted that Mr Viavettene failed to particularise the appeal grounds and failed to comply with directions issued by the Full Bench to provide an outline of submissions. Healthcare Australia also submits that Mr Viavattene’s conduct throughout the hearing of the original application and the appeal, demonstrates that he sought to harass and embarrass the Company and two of its employees as evidenced by his appeal grounds which included assertions that the employees were liars.

[9] Healthcare Australia also referred to consistent and systematic disregard on the part of Mr Viavettene for the Commission’s practices and procedures, said to be evidenced in paragraphs [14] - [17] of the appeal decision, which set out the failure of Mr Viavettene to comply with directions, and the attempts made by the Commission to facilitate his compliance. Instead of complying with the requirement to file an outline of submissions, Mr Viavattene referred the Full Bench and Healthcare Australia to a plethora of documentation that was filed with the appeal without any guidance on its relevance or utility.

[10] It was further submitted that in circumstances where Mr Viavettene’s application at first instance was dismissed because he failed to prosecute his claim, that it should have been reasonably apparent to Mr Viavattene that his appeal had no substantial prospects of success. Notwithstanding this, Mr Viavattene persisted with a claim that was doomed to failure, and as a result, put Healthcare Australia to unnecessary expense in having to prepare for the appeal.

[11] Healthcare Australia also contended that viewed objectively, Mr Viavattene should have known that the Appeal had no reasonable prospects of success, given that the grounds of appeal are unfounded, misconceived and as noted by the Full Bench in the appeal, factually incorrect. Further the grounds were not particularised or supported by evidence or submissions that were capable of meeting the threshold standards prescribed by s.400 of the Act.

[12] The findings of the Full Bench that Mr Viavattene was not denied procedural fairness, and that the finding that the decision at first instance did not display any significant errors of law, were said to be wholly unsurprising, and the only possible outcome and that this should have been reasonably apparent to Mr Viavattene when he filed his appeal.

[13] Healthcare Australia points to the fact that it did not seek costs in the original proceedings despite having grounds to do so. The motivation on the part of Healthcare Australia for seeking costs in the appeal, is that the filing of the appeal is an abuse of process for which Mr Viavattene should be held accountable.

[14] Mr Viavattene contends that the application for costs by Healthcare Australia should be dismissed because the Company did not seek the permission of the Commission to be represented by a lawyer. It was unfair and unreasonable for Healthcare Australia to be legally represented in circumstances where Mr Viavattene was self represented.

[15] Mr Viavattene further contends that he had always requested to have the matter determined on the papers, both at first instance and on appeal. Mr Viavattene also stated he has no capacity to pay costs because he is unemployed; is in deep financial hardship because he has not been able to obtain employment since his dismissal; and has earned no money this financial year.

Consideration

[16] The general statement in s.611(1) of the Act that persons must bear their own costs in matters before the FWC reflects the longstanding rule that costs will not be awarded against parties in industrial proceedings, subject to the qualification in s.611(2).

[17] The approach generally taken by the Commission to considering whether an application has been made vexatiously, is to adopt the meaning given to that term by Justice North in Nilsen v Loyal Orange Trust 3who said about a similar provision in the former Workplace Relations Act:

“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 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.”

[18] The approach to whether an appeal is instituted without reasonable cause is to consider whether at the time of instituting the appeal there was no substantial prospect of success. 4 In relation to s.611(2)(b), the approach to considering whether such a finding should be made is summarised in the decision of a Full Bench in Baker v Salva Resources Pty Ltd5as follows:

● “should have been reasonably apparent”must be objectively determined and imports an objective test, directed to a belief formed on an objective basis; and
● a conclusion that an application “had no reasonable prospects 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 to be not reasonably arguable.

[19] Determining whether an order for costs should be made is a discretionary matter involving a two stage process. In the first place it is necessary to ascertain whether the situation is one in which there is a power to award costs. If the Commission decides it is such a situation, it will then have to consider whether in all of the circumstances an order for costs is appropriate. 6

[20] Healthcare Australia has pointed to a number of examples of Mr Viavattene’s conduct in the hearing of the original application, as an indication that his appeal is an abuse of process and was instituted for the purpose of harassing and embarrassing the Company. In circumstances where Healthcare Australia determined not to press for costs in the original application, I do not accept that it is appropriate to consider Mr Viavattene’s conduct in those proceedings, as a basis for awarding costs against him in the appeal. I am also of the view that the fact that Healthcare Australia did not pursue costs in the original application, does not of itself add any weight to the application for costs in the appeal.

[21] I do not accept that the fact that the Commission made efforts to facilitate Mr Viavattene’s compliance with directions for the appeal and that Mr Viavattene failed to file an outline of submissions in accordance with those directions, is indicative of vexatiousness. It is equally probable that Mr Viavattene’s failure in this regard was based on a misconception that the contents of the Appeal books he had provided were sufficient to comply with the directions rather than an ulterior purpose such as the harassment or embarrassment of Healthcare Australia. Paragraphs [14] to [17] of the decision in the appeal do no more than set out the interactions between Mr Viavattene and the Commission.

[22] Further, the documentation filed by Mr Viavattene in support of his appeal was the same, or substantially the same documentation that he filed in connection with the original application. That Mr Viavattene’s belief that this was sufficient to meet the requirements with respect to prosecuting his appeal was misconceived, does not amount to vexatiousness. Notwithstanding the manner in which Mr Viavattene pursued his appeal, there is no basis for finding that he was motivated to do so for any reason other than because he was seeking relief to which he considered himself entitled. 7

[23] I accept that Mr Viavattene’s appeal could properly be described as having been made without reasonable cause, on the basis that at the time of instituting the appeal there was no reasonable prospect of success. I also accept that it should have been reasonably apparent when the appeal was instituted, that it had no reasonable prospects of success. In this regard, the assertion that Mr Viavattene had been denied natural justice or not afforded procedural fairness, was unsustainable, and Mr Viavattene failed to identify any appealable error.

[24] Although this is basis for an order for costs to be made against Mr Viavattene, I am not persuaded that this is an appropriate case for the exercise of the discretion to make such an order. As Healthcare Australia points out, the outcome of the appeal was wholly unsurprising. There is no question that this should have been reasonably apparent to Healthcare Australia, as well as Mr Viavattene, at the point the appeal was instituted.

[25] There was nothing new about the material filed by Mr Viavattene in support of the appeal and that material would necessarily have been considered by Healthcare Australia and its legal representatives in the substantive proceedings. Mr Viavattene was at pains to prevent further costs being incurred by Healthcare Australia, insisting as he did, that the appeal should be determined on the papers, so that no hearing was required. In this respect, the present case can be distinguished from that in Cremona (formally trading as Footy Fresh) v Lane 8.

[26] Mr Viavattene was unrepresented, suffered impact from flooding at or around the time of the hearing of his original application and has been unable to find work since his dismissal. He states that he is in financial difficulty and has no capacity to meet an Order for costs. For these reasons and in all of the circumstances, I have determined to dismiss the application for costs and an Order to that effect will issue with this decision.

DEPUTY PRESIDENT

Final written submissions:

18 June 2013.

 1   Peter Vivattene v Healthcare Australia [2013] FWCFB 2532.

 2   [2013 FWC 756

 3 [1997] 76 IR 180 at 181.

 4   Qantas Airways Limited v Carter [2013] FWCFB 1811.

 5   [2011] FWAFB 4014 at [10].

 6   McKenzie v Meran Rise Pty Ltd t/a Nu Force Security Services Dec 375/00 M Print S4962 at [7].

 7   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264.

 8   [2011] FWAFB 6984.

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