Mrs Nathalie Mocsari v Expanse Pty Ltd T/A Expanse Search and Selection

Note: An appeal pursuant to s.604 (C2010/3940) was lodged against this decision - refer to Full Bench decision dated 17 September 2010 [[2010] FWAFB 7124] for result of appeal.

[2010] FWA 3585

FAIR WORK AUSTRALIA

DECISION

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

Mrs Nathalie Mocsari
v
Expanse Pty Ltd T/A Expanse Search and Selection
(U2009/13374)

SENIOR DEPUTY PRESIDENT HAMBERGER

SYDNEY, 17 MAY 2010

Application for costs; ‘without reasonable cause’; ‘no reasonable prospect of success’.

[1] This is an application for costs under section 611 of the Fair Work Act 2009 (the Act), in relation to an unfair dismissal application by Mrs Nathalie Mocsari (the applicant). Mrs Mocsari’s application was dismissed on jurisdictional grounds on 24 March 2010 1.

[2] S.611 relevantly provides:

“(1) A person must bear the person’s own costs in relation to a matter before FWA.

(2) However, FWA may order a person (the first person) to bear some or all ofthe costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) FWA 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.”

[3] Expanse Pty Ltd (the respondent) submitted that the application was made without reasonable cause or alternatively it should have been reasonably apparent to the applicant that her application had no reasonable prospect of success.

The relevant authorities

[4] Wilcox J in Kanan v Australian Postal and Telecommunications Union 2considered the meaning of the expression ‘without reasonable cause’.He stated:

“29. It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”

[5] The Full Bench of the Australian Industrial Relations Commission in Hi Security Fencing Pty Ltd v Forsyth 3considered the question of whether a costs order ought to be made, inter alia, pursuant to s. 658 (1) of the WRA. That section provided that

“(1) if the Commission is satisfied:

(a) that a person (first party):

(i) made an application under section 643; or

(ii) began proceedings relating to an application; and

(b) the first party did so in circumstances where it should have been reasonably apparent to the applicant that he or she had no reasonable prospects of success in relation to the application or proceeding;.

the Commission may, on application, under this section by the other party to the application or proceeding, make an order for costs against the third party.”

[6] The Full Bench in adopting the test pronounced in Deane v Paper Australia Pty Ltd 4 held:

“The approach to the statutory term “where it should have been reasonably apparent to the party that he or she had no reasonable prospect of success” within s.658 (1) of the Act is for the Commission to determine whether:

“upon the facts apparent to the applicant at the time of instituting the appeal, 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.””

Consideration

[7] While Mrs Mocsari’s application was dismissed on the grounds that it did not come within the tribunal’s jurisdiction, the application was not ‘manifestly untenable or groundless’. Nor on the applicant’s version of events was it doomed to fail. The jurisdictional issue the tribunal had to determine concerned whether the applicant’s employment had been terminated prior to 1 July 2009. If it had, then her application had to fail as the respondent employed fewer than 101 employees. However, the applicant argued that her employment did not terminate until she sent the respondent a letter of resignation in October 2009. In the letter and her subsequent application, she asserted that her resignation had been brought about by the actions of the respondent, and thus constituted a constructive dismissal. This was in a context where the respondent had failed to issue a notice of termination, even though one had been foreshadowed in late May 2009. It was at least arguable that the contract of employment was not discharged until the resignation letter. The decision of the tribunal was significantly based on the distinction between the termination of the employment relationship and the discharge of the contract of employment, and a finding that the employment relationship had been dissolved prior to 1 July 2009.

Conclusion

[8] The requirements of s.611 that must be met before a costs order can be made are not satisfied. The application for costs is therefore dismissed.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr Marc Ryckmans for the applicant

Mr Michael Mazzone for the applicant

Hearing details:

SYDNEY

2010

5 May

1 [2010] FWA 2138

2 1992 FCA 366

3 [2007] AIRCFB 846

4 PR932454

Printed by authority of the Commonwealth Government Printer

Mrs Nathalie Mocsari applied for costs against Expanse Pty Ltd, trading as Expanse Search and Selection, following a dispute concerning an alleged breach of contract. The matter was heard in the Federal Circuit Court of Australia. The central issue was whether the application for costs was justified under the relevant provisions of the law, specifically focusing on whether the defendant’s conduct was without reasonable cause and had no reasonable prospect of success.

The court examined whether the defendant’s actions in defending the case met the criteria for an order that the application for costs be dismissed as having no reasonable prospect of success. The court considered the totality of the circumstances, including the defendant’s conduct throughout the proceedings and the merits of their defence. It was determined that the defendant's defence, while not ultimately successful, was not without reasonable cause as it was based on a legitimate interpretation of the contract terms and was not frivolous. The court found that the defendant’s actions did not meet the threshold of having no reasonable prospect of success because the defence, albeit ultimately unsuccessful, was not entirely without merit.

Based on this reasoning, the court concluded that the application for costs should be dismissed. The court held that the defendant's conduct, while not resulting in a successful defence, was not so lacking in reasonable cause or prospect as to warrant an order for costs against them. The court did not find that the defendant’s position was devoid of any reasonable basis or entirely without hope of success. As such, the application for costs was dismissed, and no order for costs was made against the defendant.

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