Mr Thomas Corcoran v Gamma Business Solutions Pty Ltd

[2015] FWC 7438

[2015] FWC 7438

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.365 - Application to deal with contraventions involving dismissal

Mr Thomas Corcoran
v
Gamma Business Solutions Pty Ltd
(C2015/2903)

COMMISSIONER WILSON MELBOURNE, 28 OCTOBER 2015

Application for costs order pursuant to s.375B - application for costs dismissed.

[1] This decision concerns a costs application made by Mr Thomas Corcoran’s former employer, Gamma Business Solutions Pty Ltd (Gamma Business Solutions), following the making by him of a general protections application to the Fair Work Commission.

[2] Mr Corcoran’s employment with Gamma Business Solutions was only brief. His employment started on 4 May 2015 and his employment was finished, through dismissal, on 15 May 2015.

[3] Mr Corcoran’s general protections application, made pursuant to s.365 of the Fair Work Act 2009 (the Act), was lodged on 25 May 2015. The application alleges contraventions by Gamma Business Solutions in the form of him not having been given any warnings of his dismissal; a failure by the Respondent to follow the Small Business Fair Dismissal Code; and a failure to be provided a separation certificate on the day of dismissal. Further, he claims that he was not given an opportunity to defend, prior to dismissal, the claims made by the Respondent against him and that he was not paid the correct compensation on the day of his dismissal.

[4] The Respondent rejected the claim in its written response, filed on 9 June 2015, submitting there was no contravention of the Act in the manner alleged by the Applicant and that his termination came about solely on the basis of his “poor attendance at work and for engaging in unsatisfactory conduct in the workplace during his probationary period”. 1 Gamma Business Solutions also rejected the claims made by Mr Corcoran regarding the payments made to him.

[5] Indeed, the Gamma Business Solutions response provided a detailed rebuttal of Mr Corcoran’s claims.

[6] The Respondent is adamant that Mr Corcoran was dismissed for unsatisfactory performance. It is said that he harassed the Respondent’s owner, Ms Alison Janecic, about the need for a meeting. Since Ms Janecic ran her business from her home, she felt uncomfortable with Mr Corcoran continuing in employment. In response to matters discussed in the conference before me, Ms Janecic denies that any aspect of Mr Corcoran’s parental responsibilities had anything to do with his dismissal. The employer response also refers to the Respondent’s concerns with Mr Corcoran’s time-keeping and requests to work from home.

[7] The matter proceeded to a conference before me on 29 July 2015 at which the dispute between the parties did not resolve. At the conclusion of the conference, certificates pursuant to s.368(3)(a) and (b) were issued to the effect that the Commission was satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful and that, taking into account all the materials before the Commission, that an arbitration under s.369 or a general protections court application in relation to the dispute would not have a reasonable prospect of success.

[8] The Respondent has now applied for an order for costs pursuant to s.375B of the Act, with the application for costs asserting that Mr Corcoran’s general protections application was commenced without a proper basis and without reasonable cause and that it was made vexatiously. The Respondent also asserts that its legal costs were necessary and reasonable.

[9] Mr Corcoran’s response to the Respondent’s costs application has been to reject that there is any basis in contract for him to be bound to pay the legal expenses of Gamma Business Solutions. Such proposition, of course, is not the foundation of the application, or the basis upon which I must decide the matter. The basis of this application and my decision are the provisions of s.375B of the Act. Considerations of the contractual status of the parties do not arise; instead, the considerations are whether I am satisfied that Mr Corcoran caused Gamma Business Solutions’ costs to be incurred because of an unreasonable act or omission by him in connection with the conduct or continuation of the dispute in the form of his general protections application.

[10] In the matter of Keep v Performance Automobiles Pty Ltd the Full Bench held that the legislative intention under the section was for the power to order costs to be exercised where there is clear evidence of unreasonable conduct, with such approach being consistent with the Commission’s jurisprudence in costs matters and other parts of the Act, including the general costs provision in s.611. 2 In reference to s.611, the Full Bench noted what had been found in an earlier matter, and summarised the propositions in relation to costs;

“[17] The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (Church). Church is authority for the following propositions:

(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.

(ii) A party cannot be said to have made an application ‘without reasonable cause’ within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.

(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.

(iv) The test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgment, that is, ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’.

[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.

[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;

“unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.”

[20] The respondent contends that the applicant made the Application ‘without reasonable cause’, within the meaning of s.611(2)(a) and, further, that it should have been reasonably apparent to the applicant that the Application had ‘no reasonable prospect of success’, within the meaning of s.611(2)(b).

[21] The respondent submits that the Application had no reasonable prospect of success and that on any view of the evidence could never have succeeded because:

(i) none of the reasons advanced by the respondent for terminating the applicant’s employment due to redundancy were challenged by the applicant; and

(ii) the applicant did not advance any factual basis on which the FWC could accept that the applicant’s workers’ compensation claim was a factor in the respondent’s decision to make the applicant’s position redundant as claimed by the applicant.” 3 (references omitted)

[11] It has also been held that, as a general rule, each party must bear their own costs in proceedings before the Commission. 4

[12] The circumstances in this matter include that Mr Corcoran has represented himself and appears to have drafted his application himself.

[13] In addition, by the time the matter proceeded to a conference before me on 29 July 2015, the factors about which Mr Corcoran alleged were breaches on the part of the Respondent included a failure by Gamma Business Solutions to allow him time off to attend to his needs as a carer for his young daughter; that he had not been accorded fair treatment by Ms Janecic; and that he had been given insufficient notice of termination.

[14] While I am satisfied that, because of the matters that were discussed in the course of the conference before me and referred to within the papers contained within the file, Mr Corcoran’s application if it went forward either for arbitration or hearing by a court, would not have a reasonable prospect of success, it does not follow that Mr Corcoran’s application was made vexatiously or without reasonable cause. I have taken into account that Mr Corcoran was unrepresented both in making his application and in the conference.

[15] I have also taken into account that the Respondent was also unrepresented in the conference, and did not seek to be represented by a lawyer in the conference. Parallel to that situation, I also have taken into account that Gamma Business Solutions now seek the payment of costs to them by the Applicant, including for the cost of legal advice leading to the conference.

[16] In relation to whether Mr Corcoran’s application was made without reasonable cause, there is no evidence before me that would suggest that anyone other than Mr Corcoran was responsible for initiating his application. While I am satisfied that he was mistaken about his rights generally and specifically about what may or may not constitute a contravention of the general protections contained within the Act, I am also satisfied that he was genuine in his belief that there had been contraventions on the part of Gamma Business Solutions.

[17] It should also be borne in mind that the matter over which the Respondent seeks costs to be awarded is preparation for and attendance at a telephone conciliation conference before the Commission conducted pursuant to s.368 of the Act. The Commission’s role in such a matter is to endeavour to resolve the dispute by way of mediation/conciliation, and it has no determinative powers about the merits of such an application. 5

[18] The conference conducted by me was not a hearing of any kind and, to that point at least, Mr Corcoran had not had the benefit of any person other than the Respondent advising him about what might occur if his intentions were taken forward for hearing either by the Fair Work Commission or by a Court.

[19] In relation to the Church criteria referred to above, had the Applicant had advice prior to the conference independent of the Respondent about his prospects or had he moved beyond the conference stage, at which he was advised formally by the Commission about his prospects of success, then it would likely be the case that he had instituted the proceedings without reasonable cause. Even at that point, the Commission would be required to further consider whether there were reasons that caused the awarding of costs against the Applicant, with this being a matter in which “caution and only in a clear case” dictated the exercise of a discretion. My assessment of the case as a whole is that proceeding to order costs would not be consistent with the need for caution and a clear case, even if it were established that the Applicant had instituted his action without reasonable cause.

[20] The issuing of a certificate pursuant to s.368(3)(b) advising the parties that, taking into account all the materials before the Commission, an arbitration under s.369 or a general protections court application, in relation to the dispute would not have a reasonable prospect of success is a prospective consideration about an application or notification that is yet to be lodged. The certificate and the advice within it therefore pertains to an event that is yet to occur. An applicant who chooses to not follow the advice is at risk then of it being later demonstrated that “upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success”. 6 The analysis indicated in the s.368(3)(b) certificate is at a different temporal location to that required in this decision, which is an analysis of whether the s.365 application made by Mr Corcoran on 25 May 2015 was, at that date, made without reasonable cause.

[21] The Respondent also argues that Mr Corcoran instituted his action vexatiously as well as without reasonable cause. Despite such argument it has not put forward evidence that would lead to such a view.

[22] An argument that a claim is vexatious may be an alternative one, where there is a reasonable basis for making the application. 7 The consideration looks to the motive of the applicant, perhaps “where the predominant purpose....is to harass or embarrass the other party, or to gain a collateral advantage”,8 or with the product of the proceeding being “seriously or unfairly burdensome, prejudicial or damaging”.9

[23] In this matter, and with the background both of the material provided by the parties in preparation for the conference as well as that discussed in the conference, I am unpersuaded that the application was made vexatiously. There is not an apparent collateral purpose to the application, and the Applicant strenuously believed that the things he sought to assert as workplace rights were exactly that.

[24] As a result of the foregoing, I find that the application for costs by Gamma Business Solutions does not meet the criteria for the awarding of costs. As a result, I dismiss the application.

COMMISSIONER

 1   Response to General Protections Application, item 4.1.

 2   [2015] FWCFB 1956, at [13].

 3   Ibid, at [17] – [21].

 4   Holmesby v Strathavon Resort Pty Ltd[2015] FWC 2754, at [31].

 5   Holmesby v Strathavon Resort Pty Ltd[2015] FWC 2754, at [33].

 6   Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited in Church, at [30].

 7   [2014] FWCFB 810, at [29].

 8   Nilsen v Loyal Orange Trust [1997] 76 IR 180 at p.181, cited in Church, at [29].

 9   Hamilton v Oades (1989) 166 CLR 486 at 502, per Deane and Gaudron JJ, cited in Church, at [29].

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