Mr Ronald Lee v JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda
[2016] FWC 4776
•15 JULY 2016
| [2016] FWC 4776 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Ronald Lee
v
JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda
(U2016/3954)
COMMISSIONER PLATT | ADELAIDE, 15 JULY 2016 |
Application for costs – unfair dismissal application dismissed – dismissed application not vexatious or without reasonable cause – no unreasonable act or omission – costs application dismissed.
[1] This decision deals with a costs application made by JA Gosden and G Macmillan T/A Dunlop Tyres Kapunda (Dunlop Tyres Kapunda) pursuant to ss.400A and 611(2) of the Fair Work Act 2009 (the Act). The application followed a decision 1 I issued on 19 May 2016 in which I dismissed Mr Lee's unfair dismissal application.
[2] In terms of s.400A Dunlop Tyres Kapunda contends that Mr Lee’s refusal to settle his application in the telephone conciliation process on the basis of an offer of four week’s pay, was an unreasonable act in connection with the conduct or continuation of the matter.
[3] In terms of s.611(2) Dunlop Tyres Kapunda contends that Mr Lee made his application vexatiously or without reasonable cause because his witness statement was fictitious, and the Commission made adverse findings as to his credibility.
[4] Mr Lee opposed the application.
[5] The dismissal was founded upon the fact that Mr Lee had removed money from the cash register without authority. Mr Lee provided two differing explanations for the removal of the money. I preferred the evidence of Mr Macmillan over Mr Lee. Had I preferred Mr Lee’s version of the events the outcome of the unfair dismissal application would have been different.
Was Mr Lee’s refusal to settle the matter at Conciliation an unreasonable act or omission?
[6] Section 400A states:
“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 phrase "unreasonable act or omission" was an element of the former costs provisions of s.170CJ of the Workplace Relations Act 1996, and was the subject of substantial consideration. I have drawn some guidance from those considerations in the approach followed in Brazilian Butterfly Pty Ltd v Charalambous. 2
[8] Mr Macmillan contended that Mr Lee’s rejection of an offer of four weeks wages made at the conciliation conference was an unreasonable act or omission. There is no evidence before me of the basis under which the conciliation conference was conducted.
[9] The long standing Full Bench decision in McKenzie 3 is authority for the proposition that offers of settlement made in conciliation conferences cannot be relied upon on the question of costs.
“[12] An offer of settlement made in conciliation proceedings is by its nature made on a without prejudice basis. It is inappropriate that an offer made in those circumstances should be taken into account in a costs application unless the offer is subsequently repeated on an open basis. It has long been accepted that positions taken in conciliation are without prejudice to the position to be taken in arbitration. The protection afforded to participants by this principle is an essential feature of conciliation proceedings.”
[10] The conduct of conciliation conferences is a key element of the process by which the Commission manages its unfair dismissal jurisdiction. It is the principal opportunity which parties have to settle their matters before they go to hearing. The is no evidence before me that Mr Lee behaved unreasonably by not engaging seriously in the process, or failing to properly consider a reasonable settlement offer. There is no evidence before me that the offer was made as a Calderbank offer.
[11] I note that if Mr Lee’s version of the transaction had been accepted by me, he may well have been awarded considerably more than four weeks.
[12] I am not persuaded that the matters raised in the conciliation conference in this case can be relied upon or that Mr Lee’s rejection of the offer made at conciliation amounted to an unreasonable act or omission within the meaning of s.400A. I decline to award s.400A costs on that basis.
Was Mr Lee’s application made vexatiously, without proper cause or had no reasonable prospects of success?
[13] Section 611 states:
“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).”
[14] The meaning of the term ‘vexatiously’ and ‘without reasonable cause’ was discussed in Church v Eastern Health. 4 The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party, or to gain a collateral advantage.5
[15] The term ‘without reasonable cause’ is not enlivened simply because a party’s argument proves unsuccessful. The test is whether the application should not have been made. In Kanan v Australia Postal and Telecommunications Union 6, Justice Wilcox described the test as:
“whether upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success…..where on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may be properly said that the proceeding lacks a reasonable cause”.
[16] The meaning of the terms ‘should have been reasonably apparent’ and ‘had no reasonable prospect of success’ were considered by a Full Bench in Baker v Salva Resources Pty Ltd 7 who said;
“[10] The concepts within s.611(2)(b) have been well traversed:
[17] In this matter the success or failure of Mr Lee’s application came down to whether his explanation of the removal of the money from the cash register was accepted. Mr Lee’s credit was a major determinant of the decision to prefer the evidence of Mr McMillan.
[18] There is no evidence before me that supports a finding that that Mr Lee instituted this matter vexatiously or without reasonable cause, or that the application had no reasonable prospect of success.
[19] Accordingly the s.611 costs application must also fail.
Conclusion
[20] For the reasons I have set out in this decision applications for costs by Dunlop Tyres Kapunda is refused. The application is dismissed. An Order to that effect (PR582864) will issue.
COMMISSIONER
Appearances:
R Lee on his own behalf.
G Macmillan on behalf of the Respondent.
Hearing details:
2016.
Adelaide:
June 22.
1 [2016] FWC 3125
2 PR968915
3 McKenzie v Meran Rise Pty Ltd t/a Nu Force Security Services Print S4692 (7 April 2000); followed by the Full Bench in T L Smith v Department of Foreign Affairs and Trade [2008] AIRCFB 495
4 [2014] FWCFB 810
5 Nilsen v Loyal Orange Trust (1992) 43 IR 257
6 [1992] FCA 539
7 [2011] FWAFB 4014
Printed by authority of the Commonwealth Government Printer
<Price code A, PR582863>
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