Mrs Michelle McKerrow v Sarina Leagues Club Incorporated

[2013] FWC 2387

[2013] FWC 2387

FAIR WORK COMMISSION

DECISION

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

Mrs Michelle McKerrow
v
Sarina Leagues Club Incorporated
(U2010/14622)

DEPUTY PRESIDENT ASBURY BRISBANE, 18 APRIL 2013

Application for costs - Earlier proceedings in which costs were awarded to the Applicant reopened due to failure of Respondent to provide submissions in relation to costs to Applicants legal representative - Further order for additional costs made.

Background

[1] In McKerrow v Sarina Leagues Club Incorporated 1I determined that costs should be awarded against Sarina Leagues Club Incorporated (SLC) in relation to an application by Ms Michelle McKerrow for an unfair dismissal remedy. The basis of that decision was that SLC responded to Ms McKerrow’s application by making a jurisdictional objection without reasonable cause, and that it should have been reasonably apparent that the response had no reasonable prospects of success.

[2] In that Decision, Ms McKerrow was directed to provide an itemised schedule of costs in accordance with the scale in the Fair Work Regulations 2009 and the SLC was directed to provide a response as to the reasonableness or otherwise of the costs sought by Ms McKerrow. The Decision indicated that following receipt of this material the amount of costs would be determined and an Order issued.

[3] Material was received from the parties. That material included a Costs Statement in short form filed by SR Wallace & Wallace Lawyers on behalf of Ms McKerrow and a submission on behalf of SLC in response to the Costs statement. In a further Decision issued on 12 December 2012, 2 Ms McKerrow was awarded costs in the amount of $7,892.00.

[4] On 13 December 2012, email correspondence was received from SR Wallace & Wallace Lawyers on behalf of Ms McKerrow in relation to that Decision, indicating that the submissions filed by SLC had not been served on Ms McKerrow or the office of SR Wallace & Wallace Lawyers. The email went on to point out that there had been no opportunity for Ms McKerrow or her legal representatives to comment on the submissions made by SLC in relation to the quantum of costs, and that these submissions had been accepted by the Commission. An application to re-open the matter to allow a response to SLC’s submissions was also foreshadowed.

Further Conference/Hearing

[5] The Submissions made on behalf of SLC in relation to the quantum of costs were immediately forwarded to SR Wallace & Wallace Lawyers by my Associate. A further Conference/Hearing was held on 17 December 2012 for the purpose of hearing from Ms McKerrow’s legal representative in relation to the matters raised in the email of 13 December 2012. At that Conference/Hearing, Mr Smart on behalf of Ms McKerrow made submissions in relation to three matters arising from the Decision of 12 December 2012 and the submissions made by SLC in relation to the quantum of costs.

[6] In order to understand the issues raised by Mr Smart at the Conference/Hearing on 17 December 2012, it is necessary to set out some aspects of the Decision of 12 December 2012. Essentially, that Decision records that a costs statement in short form was provided by Ms McKerrow’s legal representative and that SLC, in its costs submissions (provided to the Commission and not to Ms McKerrow or her legal representative) agreed with the items set out in that costs statement, with the exception of item 16 being an amount of $9,360 relating to appearance of a solicitor as counsel, with respect to preparation and appearance at trial.

[7] Item 16 of the short form schedule of costs filed on behalf of Ms McKerrow is expressed as 26 units at $396.00 per hour, inclusive of GST, for Solicitor appearing as Counsel. This item represents preparation for, and appearance at, the hearing in Mackay on 31 March 2011. SLC, in its costs submissions contended that item 16 of the Costs Statement was excessive, having regard to the circumstances of the case and represented an amount of $1,440.00 for 6.5 hours.

[8] SLC submitted that an amount of $1,950.00 representing 6.5 hours at $300 per hour would be fair and reasonable, having regard to:

● There being only three witnesses called at trial; and
● The length of the trial being in the order of 2.5 hours.

[9] SLC also submitted that item 18 being an amount of $720.00 representing costs of preparing the costs statement, should be assessed on the basis of $34.00 per quarter hour rather than $60 per quarter hour, as the costs statement was capable of being made by a clerk.

In the decision quantifying the costs to be awarded to Ms McKerrow I agreed with these submissions and adjusted the total amount accordingly. I further determined that an amount of $3,970.00 for care and conduct was not appropriate, given the matters for which such a charge can be made, pursuant to item 1201 of the Schedule of Costs in the Fair Work Regulations 2009.

[10] The three matters arising from the failure of SLC to provide its costs submissions to Ms McKerrow and the Decision of 12 December 2012, about which Mr Smart made submissions at the hearing on 17 December 2012, are as follows:

● Item 16 on the short form costs assessment dealing with costs of solicitor appearing as counsel;
● Item 18 on the short form costs assessment dealing with costs of preparing costs statement; and
● Items 17 and 19 on the short form costs assessment dealing with care and consideration in relation to items 16 and 18.

[11] Mr Smart said in relation to Item 16 that there was an error in the short form costs statement in relation to the amount claimed where it is said to be inclusive of GST but the total amount claimed is exclusive of GST. Further, Mr Smart submitted that the submissions of SLC were in error in that it had been assumed that the “occurrences” set out in the short form costs assessment were quarter hours, when in fact they were hours. Accordingly, the costs in relation to solicitor appearing as counsel as set out in that assessment were 26 hours at $396 per hour and not 6.5 hours at $1,440.00 per hour.

[12] In respect of that item, Mr Smart contended that 6.5 hours was not sufficient time for the preparation of the matter notwithstanding that the hearing went for 2.5 hours and that a day of preparation should be allowed for each day of hearing. It was also submitted that there was a delay in starting the hearing due to a flight delay, and that this required a necessary attendance which should be taken into account in the assessment of costs. Further, Mr Smart contended that much of the total amount of costs incurred related to preparation for a hearing to meet a jurisdictional argument that did not end up proceeding.

[13] In relation to the matter of care and consideration, Mr Smart submitted that item 12.01 of the Schedule of Costs in the Fair Work Regulations 2009, provides for care and consideration on the basis of the general complexity of the matter and the difficulty of the questions raised. Other relevant factors are the importance of the matter to the party and the amount involved. In this regard, Ms McKerrow had serious criminal allegations made against her in a small regional area. The matter was of significant importance to Ms McKerrow having regard to the allegations made against her; the need to vindicate herself and to have those allegations tested and dismissed. Complexity was not the end of the matter, and these other factors should be taken into account.

[14] Mr Hill on behalf of SLC accepted that the submissions in response to the short form schedule of costs were not served on Ms McKerrow or her legal representatives, and stated that this was because of failure on the part of SLC’s representative Clubs Queensland.

Conclusions

[15] In circumstances where SLC was represented by Clubs Queensland throughout the entirety of the proceedings, the failure to provide a copy of a written submission made to the Commission, to Ms McKerrow’s legal representative, is surprising. It is even more surprising given that on at least one occasion, it was necessary for me to direct the representative of SLC to refrain from engaging in ex parte communication with the Commission, about the case.

[16] While there is some lack of clarity in the short form schedule of costs submitted on behalf of Ms McKerrow, these are matters which could have been quickly addressed had SLC served its submission in response to that schedule on Ms McKerrow’s legal representatives as required, and I accept that the opportunity to contest matters raised in the submission for SLC has been denied to Ms McKerrow.

[17] At the conclusion of the hearing on 17 December 2012, I determined that it would be appropriate to re-open the matter of costs, on the grounds that a decision was made based on submissions from SLC, that were not provided to Ms McKerrow or her legal representatives. I indicated that I would consider the submissions and determine whether an additional amount should be allowed for costs. I further indicated that the amount ordered on 12 December 2012 should be paid in the interim period.

[18] After considering the submissions of the parties I have decided to issue a further Order, amending the original costs Order, to award an additional amount to Ms McKerrow for costs in relation to this long and sorry saga. I remain of the view that the original hearing of this matter was brief, encompassing a period of only 2.5 hours. I also remain of the view that there was nothing novel or complex about the questions of law or fact required to be determined, and little effort was required on the part of Ms McKerrow’s legal representative to respond to the jurisdictional objection, incorrectly raised by SLC on the ground that it was a small business employer.

[19] That the jurisdictional objection made by SLC was doomed to failure, was apparent from the material filed by SLC in advance of the hearing. The written submissions filed on behalf of Ms McKerrow in relation to the jurisdictional objection simply point out that on the material filed by SLC in advance of the hearing, it was not a small business employer and that the jurisdictional objection on that ground is unnecessary and embarrassing. The jurisdictional objection was dealt with before the hearing commenced and occupied a few minutes in the 2.5 hour hearing.

[20] It is the case, as pointed out by Mr Smart, that the hearing in Mackay on 31 March 2011 commenced at 11.13 am rather than the scheduled time of 10.00 am. However, that delay was unavoidable due to weather complications in Mackay significantly delaying the arrival of the flight that myself and my Associate travelled on. While that is regrettable, it is not a matter that can be laid at the feet of the SLC, and it is not appropriate to encompass that matter in an award of costs.

[21] I dealt with the matter of care and consideration in the decision of 12 December 2012, and I am not persuaded to revisit that matter. It is also the case that it was not raised in the submissions of SLC and the conclusion that such an amount should not be awarded was not based on any acceptance of the submissions of SLC.

[22] In relation to the submissions with respect to items 16 and 18 of the short form schedule of costs filed on behalf of Ms McKerrow, I accept that my decision in relation to the amounts allowed for these items reflects an acceptance of an erroneous submission made by SLC to the effect that the “occurrences” listed are quarter hours when in fact they are hours.

[23] For the reasons set out above, this is a matter which could have been addressed had SLC complied with its obligations to serve its submissions in relation to costs on Ms McKerrow’s legal representative and Ms McKerrow has been denied the opportunity to fully articulate her claim for costs. Further, Ms McKerrow has been put to additional expense to seek redress for this unfortunate situation, created by the conduct of SLC in failing to provide its submissions to her legal representative.

[24] In all of the circumstances, I have decided to award an additional amount of $2,000.00 to Ms McKerrow for costs in relation to her application and related proceedings, with such amount to be paid to her within 7 days of the date of release of this Decision. An Order to that effect will issue with this Decision.

DEPUTY PRESIDENT

 1   [2012] FWA 7574.

 2   [2012] FWA 10471.

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