Mr Richard Hyde v R S Thomas and Company
[2014] FWC 7391
•3 NOVEMBER 2014
| [2014] FWC 7391 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Richard Hyde
v
R S Thomas and Company
(U2013/14845)
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 3 NOVEMBER 2014 |
Application for relief from unfair dismissal.
[1] This matter concerns an application for costs made by R S Thomas and Company (the Costs Applicant) against Mr Richard Edward Hyde (the Costs Respondent), arising from a finding in a prior decision in which I dismissed the Cost Respondent’s application under.s394 of the Fair Work Act 2009 (“the Act”) on grounds of jurisdiction as well as (in the alternative) on my assessment of its substantive merits. The prior decision was made in transcript on 26 June 2014.
[2] Both the Cost Applicant and the Cost Respondent have requested that I determine this application from the materials before me and not by way of a hearing.
[3] This matter has been delayed for reason of the Cost Respondent's illness and the inability of the Costs Respondent’s solicitor to obtain instructions.
[4] My findings in the prior decision were principally concerned with findings of credit against the Cost Respondent and his secondary witness (the Cost Respondent's wife).
[5] My findings in respect of this application for costs must be read in conjunction with my prior decision.
[6] The Costs Applicant sought costs broadly against the Cost Respondent and his solicitor. That is, the Costs Applicant has applied for costs pursuant to sections 400A, 401 and 611 of the Act.
[7] The Legislation
The relevant provisions of the Act provide:
400A Cost 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.
401 Costs orders against lawyers and paid agents
(1) This section applies if:
(a) an application for an unfair dismissal remedy has been made under section 394; and
(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and
(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.
(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or
(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.
(2) The FWC may make an order under this section 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.
402 Applications for Cost orders
An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 401, must be made within 14 days after:
(a) FWA determines the matter; or
(b) the matter is discontinued.
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).
[8] The Cost Applicant’s claims were as follows, broadly sketched at least.
[9] The Costs Applicant initially submitted that, pursuant to section 611 of the Act, the Applicant made the application vexatiously and without reasonable cause.
[10] The Costs Applicant claimed that the Cost Respondent admitted at [PN441] to [PN442] of the Transcript that he had never been informed that he was terminated. On that issue, the Applicant noted that I found, at paragraph PN1463 of the Transcript, that:
Mr Thomas himself never took the step to verbally indicate that the [A]pplicant had been terminated or dismissed from his employment... He cannot, therefore, be held to have dismissed the [A]pplicant at his own initiative for purposes of section 386(1)(a) of the Act.
[11] The overall impression of the Cost Respondent’s evidence, it was said, was that he was aware he had not been terminated, and had made the application for another purpose altogether, and that was to harass the Costs Applicant.
[12] It was further submitted that the Cost Respondent’s wife was examined at length regarding the purpose of the Applicant bringing the Application and had, in the course of her examination, indicated that the Cost Respondent (her husband) had been unsuccessful in obtaining a disability pension. The matter was put this way by the Costs Applicant:
[...] the commencement of the Application for Unfair Dismissal Remedy was discussed as a “fallback” in the event the application for the disability pension was not successful. Relevantly:
[PN908] You still haven't answered my question, though. The fact that the disability pension hasn't yet been granted to him in June the following year wasn't in your plan?---It didn't - we didn't have a plan of how long it was going to take...
[PN912] You never thought about where the rest of your income was going to come from if he was made casual?---The rest of our income is no concern of yours...
[PN915] You said you had a plan. I put it to you - - -?---The plan that we had was simply to apply for the disability pension and see what happened from there...
[PN917] That's why you started this application?---The application for the unfair dismissal had to be in within a certain time frame and, after seeking legal advice - - -
[PN919] You decided to hedge your bets?---No. At [PN908] to [PN918] of the Transcript,
[13] It was submitted that the Costs Respondent commenced the application to ensure he was not barred from proceeding due to time limits in the event he was unsuccessful in obtaining a disability pension.
[14] The Cost Respondent and the Cost Respondent’s wife’s evidence under examination was said to have been that they were motivated by ensuring their collateral position from 8 November 2013 onwards:
[15] The Applicant also indicated that he had been seeking job opportunities before 8 November 2013, the date of his purported dismissal. He indicated on his own evidence under my own questioning that he had indicated to a prospective employer that he would be available after that time. As I mentioned above, it is suggested that Mr Hyde may have constructed an alternative scenario for his future employment circumstances which he had given thought to prior to 8 November. [PN1477] to [PN1478] of the Transcript.
[16] Because the Applicant also sought costs pursuant to section 400A of the Act, it was also argued in this respect that the Cost Respondent had committed an unreasonable act or acts in connection with the conduct and continuation of the matter.
[17] The Costs Applicant contended that my findings as to the likelihood of the Costs Applicant having been the victim of a scheme concocted by Mr and Mrs Hyde demonstrated both the vexatiousness of the application and the misconduct.
[18] In the alternative, it was argued by the Costs Applicant that the Cost Respondent refused to accept reasonable offers to settle. This amounted to an unreasonable act which caused the Cost Applicant to incur the costs in defending the matter from 13 January 2014 onwards.
Submissions regarding the Applicant’s Solicitor
[19] The Costs Applicant also sought costs in respect of the cost of defending the application on an indemnity basis from Ms Scanlan, solicitor for the Cost Respondent.
[20] It is submitted that Ms Scanlan demonstrated an unreasonable act (or acts) throughout her carriage of the matter. In the alternative, the Cost Respondent submitted that Ms Scanlan encouraged the Cost Respondent to continue the matter, although it should have been reasonably apparent that he had no reasonable prospect of success in the matter.
Solicitor’s Unreasonable Acts
[21] It was argued further by the Costs Applicant that the Cost Respondent’s solicitor (Ms Scanlan) was not sufficiently acquainted with the legislation and did not advance a thorough or well researched case. In addition, it was argued that the Cost Respondent’s solicitor reflected an absence of detailed understanding of the long service leave provisions of the state legislation.
[22] It was argued that because the Cost Respondent’s solicitor was ill informed in these respects then it must be inferred that she encouraged the Cost Respondent to pursue the original application on an unsound footing.
[23] Because of Ms Scanlan’s unreasonable acts in this regard, it was argued that the Respondents were caused to incur costs in defending the proceedings.
Consideration
[24] I am satisfied that the application for costs was made within the timeframe provided by s.402 of the Act.
[25] So far as the application is made under s.400A of the Act, I am required to determine if the unreasonable act or omission relied upon is the Cost Respondent’s failure to discontinue the application (and in this case by failing to accept an offer of settlement made by the Costs Applicant).
[26] In order to find the conduct of the Cost Respondent unreasonable in this regard I must be satisfied that it was apparent to the Applicant that his case could not succeed, as only then is the refusal to accept an offer an unreasonable act or omission.
[27] Similar considerations apply to the application so far as the provisions of ss.401(1A) of the Act are relied upon and the application is directed towards the applicant’s representative.
[28] I indicate firstly that the nature of my adverse findings against the Cost Respondent were based upon the assessment of the credit of the witnesses, and which in turn led to a finding on the basis of jurisdiction (in the first instance).
[29] I think a cautious approach should be adopted in awarding costs in such circumstances.
[30] There are instances in the Cost Respondent's evidence in which he indicated, for example, that he may be available for employment after a certain date. But the context for such a comment was determined on the basis of the Costs Respondent's wife’s evidence; the meaning of the evidence may not have had the same weight on its own.
[31] Ultimately, the evidence seemed to me to demonstrate very much a conspiracy between Mr and Mrs Thomas to fabricate a dismissal in their interests. But equally, this was a finding made on the balance of probability based largely on the credibility of the evidence of Mrs Thomas, in the context of Mr Thomas’ and Mr Hyde’s claims. These were contexts that were made clear in the course of the evidence and which were not wholly revealed at the time the application was made.
[32] This, then, was not a case determined by reference to facts as such, which the Cost Respondent should reasonably have known. The outcome very much turned instead on my assessment of the credibility of the witness evidence.
[33] I think it asks too much of parties to anticipate evidence as it falls in the course of proceedings and as then interpreted by the Commission. The relevant tests can only apply as to the state of the evidence at the time the application was made. In instances where findings of credit are made - as in this case - it is not possible to determine with any degree of accuracy what should have been reasonably known by the Cost Respondent himself at an earlier time.
[34] In my view, there was some (very limited) scope for the Cost Respondent to have misinterpreted the conduct of Mr Thomas in completing a separation certificate in the context of his rumoured intention to make him a casual employee (though of course I put this prospect aside in the context of the totality of evidence).
[35] Added to this, the communications between the Costs Applicant and the Costs Respondent were far from rich. Little was said about matters of detail. The parties communicated in minimalist terms about their arrangements, both being men of practical affairs. There was wide scope for misunderstanding when they entered into an informal and unusual change in the way in which work would be offered for an extended period of time.
[36] At an elemental level, Mr Thomas had some grounds, indeed weak though they may have been, to give him reasonable cause to press his application.
[37] I am not satisfied therefore that the Cost Respondent acted unreasonably, in either failing to discontinue his application or in failing to accept the offers of settlement made by the Costs Applicant. As I said above, I adopt a cautionary approach in this regard when matters turn on findings of credit.
[38] Given that the Applicant had some grounds at least for agitating his action, weak though they may have been, I am unable to find that he acted unreasonably, in either failing to discontinue his application before the hearing, or in accepting any offer of settlement made by the Cost Applicant.
[39] For the same reasons, I do not accept the Costs Applicant’s contention that the Cost Respondent's representative acted unreasonably in omitting to advise the applicant to withdraw or settle, or actively encouraged him to continue with the application. Indeed, there has been no disclosure to me (nor has any been sought) as to the instructions given to the Cost Respondent's representative.
[40] The application had been filed some months, it appears, after the Costs Respondent’s legal representative became involved in the matter. The Costs Respondent’s representative cannot be said to have initiated the proceedings, and her role in continuing the matter is reduced by that fact as well.
[41] But further to this, I do not know whether the Cost Respondent's representative acted unreasonably in the circumstances, in any event. Given that much of the critical evidence was adduced in the hearing process itself, I am inclined to consider the Cost Respondent's representative may have had partial knowledge only of the wider scope of the actions and conduct of the witnesses, as revealed under the examination process. The manner and disposition of the Cost Respondent and his wife in the witness box also suggest that they were unlikely to have been effusive about the wider factual matrix.
[42] It may also have been the case that the Cost Respondent's solicitor did not reveal close familiarity with the Act at times, but these do not appear to have been to fatal effect in a conference context.
[43] I add that this is not a costs application in which I consider it is “open” to me to undertake an inquiry into matters that currently ‘sit behind’ legal professional privilege. 1 That is, in respect of any inquiry into the conduct of the Cost Respondent’s solicitor by the Cost Applicant, I have no request to waive privilege, or an offer to do so. The parties have not sought to elevate this application to a proceeding of that scope.
[44] So far as the Employer relies on s.611 (2)(a) of the Act, I cannot be satisfied that the Applicant instituted the proceedings without reasonable cause. I do not accept that the Cost Respondent acted for reasons of harassing and annoying the Costs Applicant. There was no evidence to this effect - the Costs Respondent appeared to have been earnestly seeking a remedy under s.394 of the Act. But there also is no evidence to suggest that the Costs Respondent was acting for an ulterior reason or for reasons of preserving a course of action. In the end, the evidence is not sufficiently illuminating as to the Costs Respondent’s motivation at all, other than it is on its face - to seek a statutory remedy.
[45] So far as the application relies on s.611 (2)(b) of the Act, the phrases “should have been reasonably apparent” and “had no reasonable prospect of success” have been subject to consideration in a number of decisions of the Commission over time. But the plain words are a sufficient guide as to the Commission’s jurisdiction.
[46] As I have mentioned above, the Costs Respondent had a case, albeit a weak case. It was based on a presumption that his wife had been informed he would be made casual and Mr Thomas had completed a certificate of separation. Beyond that, the evidence adduced in the hearing (about Mr Hyde’s intentions and the Cost Respondent's wife’s conduct) fell in a different way than Mr Thomas may have anticipated.
[47] But I should not on that basis alone make an order for costs against the Costs Respondent.
Conclusion
[50] The circumstances of this case do not warrant the making of an order for costs. Nor as a matter of wider discretion, given the same circumstances, would I have granted the order as sought.
SENIOR DEPUTY PRESIDENT
Appearances:
Ms P Cardiff, solicitor for the Costs Applicant
Ms M Scanlan, solicitor for the Costs Respondent
Hearing details:
2014.
3 October.
Brisbane.
Final written submissions:
15 October 2014.
14 October 2014.
1 Livingstones Australia v ICF (Australia) Pty Ltd and another [2014] FWCFB 1276.
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