Mr Ross McLeod v Mr Ian Walker

[2012] FWA 7395

[2012] FWA 7395

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Mr Ross McLeod
v
Mr Ian Walker
(U2012/8302)

VICE PRESIDENT WATSON SYDNEY, 29 AUGUST 2012

Application for costs - Fair Work Act 2009 - s.401,596.

Introduction

[1] This decision concerns an application for an order for costs by Mr Ian Walker in respect of an unfair dismissal application brought by Mr Ross McLeod pursuant to s.394 of the Fair Work Act 2009 (the Act) in respect of the termination of his employment by Mr Walker.

[2] Mr McLeod filed an application for unfair dismissal with Fair Work Australia on 22 May 2012. Mr McLeod was notified of the termination of his employment on 27 March 2012, effective 7 April 2012. A telephone conciliation conference was held on 13 June 2012. At the time of making the unfair dismissal application, there were a number of outstanding issues that were in dispute such as whether the employer was an entity or an individual and the number of employees employed at the time of dismissal, the date of dismissal and the circumstances surrounding the dismissal (outstanding issues).

[3] Throughout these proceedings, Mr McLeod was represented by Mr David Kennedy form Waterford Ryan Solicitors and Mr Walker was represented by Mr Trevor Jones from Regional Law Group.

[4] Mr Walker objected to Mr McLeod’s application on the basis that it was lodged some 32 days outside the time limit prescribed in s.394(2) of the Act and that there were no exceptional circumstances present to warrant the Tribunal granting an extension of time for filing the application.

[5] The matter was listed for mention by telephone on 5 July 2012. Directions were made for the filing of written material in relation to the application to extend the time for filing the unfair dismissal application, on the basis that the application would be determined on the papers. Mr McLeod was directed to file his submissions on 25 July 2012 and Mr Walker was directed to file his submissions in reply on 9 August 2012.

[6] On 25 July 2012, Mr McLeod gave notice that he was withdrawing his unfair dismissal application and subsequently filed a Notice of Discontinuance.

[7] On 30 July 2012, Mr Walker filed an application for costs pursuant to s.401 of the Act against Waterford Ryan Solicitors as Lawyers for Mr McLeod.

[8] The parties were given an opportunity to file written submissions in relation to the costs application.

Legislative Test

[9] The power to make an order for costs against a lawyer or paid agent is dealt with in s.401 of the Act which relevantly provides as follows:

“401 Costs orders against lawyers and paid agents

(1) If FWA has granted permission in accordance with section 596 for a person to be represented by a lawyer or paid agent in a matter arising under this Part before FWA, FWA may make an order for costs against the lawyer or paid agent if FWA is satisfied:

(a) that:

(i) the lawyer or paid agent caused costs to be incurred by the other party to the matter because the lawyer or paid agent encouraged the person to start or continue the matter; and

(ii) it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) that the lawyer or paid agent caused costs to be incurred by the other party to the matter because of an unreasonable act or omission of the lawyer or paid agent in connection with the conduct or continuation of the matter.”

[10] In this matter no express permission was granted either representative by Fair Work Australia to appear in the matter. However Rule 17A of the Fair Work Rules made on 2 September 2011 permits lawyers or paid agents to lodge applications and make submissions. It provides as follows:

“17A Representation other than at conference or hearing

(17A.1) For section 596 of the Act, and subject to a direction by FWA to the contrary, a party to a proceeding before FWA may be represented by a lawyer or paid agent for the purpose of preparing and/or lodging any written application (including an originating application) or written submission, corresponding with FWA or lodging any document with FWA.”

(17A.2) To remove doubt, nothing in this rule is to be taken as permitting a lawyer or paid agent to represent a party in a conference or hearing before FWA.”

Position of the parties

[11] Mr Kennedy submits the costs application must fail as the application is not bought against a lawyer, as defined in s.12 of the Act who has been granted permission to appear under s.596 in a matter before Fair Work Australia. Mr Kennedy submits that the named respondent in the costs application is a business name that lacks the capacity to sue or be sued and that neither party sought or had permission granted for their legal representation to appear. Therefore Fair Work Australia has no jurisdiction to order costs against Waterford Ryan Solicitors.

[12] Further, Mr Kennedy submits that the basis for granting a costs application in s.401(1) has not been satisfied. Mr Kennedy contends that the matter was discontinued in order to reduce the costs for Mr McLeod in preparing a submission in regards to the application for an extension of time rather than as an admission that the matter had no reasonable prospect of success.

[13] Mr Kennedy contends that at no time did he encourage Mr McLeod as required by s.401(1)(a)(i) but rather he provided his legal opinion as to the likelihood of success and agreed to represent Mr McLeod if he wished to continue with the application. Mr Kennedy submits that despite the lack of instructions with regard to the outstanding issues, the matter was pursued as he intended to use the conciliation conference on 13 June 2012 to resolve the outstanding issues with Mr Walker and settle the matter in its entirety. The outstanding issues were not resolved at conciliation or through a second attempt by way of correspondence to Mr Jones. Mr Kennedy submits that as well as the cost associated with preparing submissions for an application for an extension of time, the matter was discontinued after assessing the lack of information regarding the outstanding issues. In summary Mr Kennedy submits that these positive acts cannot be taken as encouraging Mr McLeod to continue with the application as required by s.401(1)(a)(i).

[14] Mr Jones submits that permission to appear pursuant to s.596 was implied as a result of Mr McLeod and Mr Walker being represented by their respective lawyers from the commencement of the matter and all correspondence and appearances being between Fair Work Australia and himself and Mr Kennedy. Mr Jones submits that because the unfair dismissal application was signed by Mr Kennedy as solicitor for the applicant, the fact that Fair Work Australia accepted and considered the application is evidence of permission being granted for him to appear.

[15] Mr Jones submits that Mr Kennedy encouraged Mr McLeod to start the matter by pre-emptively filing the application for unfair dismissal without proper instructions and answers to the outstanding issues and continued to attend and represent Mr McLeod at all proceedings thereby satisfying the requirement in s.401(1)(a)(i). Mr Jones further submits that the outstanding issues that Mr Kennedy refers to were not resolved because the jurisdictional objection raised by Mr Walker needed to be addressed in the first instance. Consequently, a consideration as to the costs and the likelihood of a positive outcome from an application for extension of time should have been considered prior to either lodging the application for unfair dismissal or alternatively, prior to the conciliation and mention conferences. By failing to have regard to these considerations, Mr Kennedy caused costs to be incurred by filing the notice of discontinuance the day before he was due to file his material.

Findings on the legislative test

[16] For cost to be awarded against a lawyer or paid agent under s.401 of the Act, it must be established that permission to appear has been granted in accordance with s.596.

[17] Mr Kennedy submits that he followed the instructions of Mr McLeod to make the application despite advising Mr McLeod that there were time limits within which unfair dismissal applications should be filed. Although Mr Kennedy submits that the matter was discontinued after having assessed the lack of evidence received to resolve the outstanding issues, I do not consider that making the application of Mr McLeod’s behalf, prior to receiving such information, is conduct that would satisfy s.401(1)(a)(i). For an application made within the required 14 days or outside it, there is often a need to file an application at the earliest opportunity and investigate the strength of the case subsequently. In this case, the investigations needed to cover the merits of the application and the circumstances on which it might be claimed that exceptional circumstances existed such as to justify an extension of time for filing the application. Mr Kennedy took instructions on 15 May 2012, filed the unfair dismissal application on 22 May 2012, participated in a telephone conciliation on 13 June 2012 and a telephone directions hearing on 5 July 2012. Prior to the time for filing material in support of the extension of time application he filed a notice of discontinuance. It is not unusual for information that will bolster a case to be sought and ascertained after the filing of the application. There is no evidence before me that Mr Kennedy encouraged Mr McLeod to make the application apart from providing legal advice in the ordinary manner and representing his client at the mandatory first stage conciliation process and subsequent directions hearing.

[18] On the evidence before me I am unable to conclude that it should have been reasonably apparent to Mr Kennedy that Mr McLeod had no reasonable prospect of succeeding in his unfair dismissal application and I do not accept that the decision to discontinue the matter is evidence that it was reasonably apparent to Mr Kennedy that the application had no reasonable prospects of success. In any event, it would not have been possible for Mr Kennedy to make such as assessment as to the prospects of Mr McLeod’s application without having obtained the information and answers to the outstanding issues. Mr Kennedy investigated the matter and filed the notice of discontinuance in advance of the requirement for Mr Walker to file material in response and therefore saved costs in doing so. Although it would have been preferable that a decision to withdraw the application occurred earlier, Mr Kennedy lacked certain key information until well after the application was made.

[19] For the above reasons, the application for an order that Mr Kennedy pay the costs of Mr Walker in this matter is dismissed.

VICE PRESIDENT WATSON

Final written submissions:

Mr Walker, 7 August 2012.
Mr Kennedy, 9 August 2012.

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