Mrs Zoe Marie Russell v Barkley Hill Pty Ltd
[2023] FWC 1775
•20 JULY 2023
| [2023] FWC 1775 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mrs Zoe Marie Russell
v
Barkley Hill Pty Ltd
(U2023/3591)
| DEPUTY PRESIDENT ROBERTS | SYDNEY, 20 JULY 2023 |
Application for costs orders against parties
Barkley Hill Pty Ltd (the company or the Costs Applicant) has applied for an order for costs pursuant to s.400A of the Fair Work Act 2009 (Cth) (the FW Act) against Ms. Zoe Russell (Ms. Russell or the Costs Respondent). The application arises out of proceedings initiated by Ms. Russell on 26 April 2023 alleging that she had been unfair dismissed by the company on 22 January 2023 (the unfair dismissal proceedings).
The history of the unfair dismissal proceedings can be briefly stated. After the application was filed on 26 April 2023 and a copy provided to the company, the company engaged the services of a firm of solicitors to prepare a response. The Employer Response (Form F3) was filed with the Fair Work Commission (the Commission) on 23 May 2023 and the matter was allocated to my Chambers. The response raised a number of objections to the application including that the dismissal was a case of genuine redundancy and that the company was a small business employer who had complied with the Small Business Fair Dismissal Code. As it was also apparent on the face of both the originating application and the response that the application had been made outside the time period prescribed by s.394 of the FW Act, the matter was programmed to determine whether the Commission should exercise the discretion reposed in it under s.394(3) to extend the time period for the filing of the application on the basis that there were exceptional circumstances within the meaning of that subsection.
Directions were made for the filing of material and the matter was listed for 5 June 2023 to determine the question of whether an extension of time should be granted.
On 26 May 2023 Ms. Russell notified the Commission by email that she wished to discontinue the original application. Ms. Cuffe from the company was copied into that correspondence. The email provided as follows:
Please find attached form F50
We are cancelling this application due to the following reason:
- Lack of time for myself (Kyle Russell, acting on Zoe behalf) and feel like I can't focus on this matter in a proper compacity
- The Impact on the Applicant Mental Health
- Our lack of Legal Representation
On 29 May 2023 the Commission acknowledged receipt of the Notice of Discontinuance.
The Costs Application
By an application dated 5 June 2023 the Costs Applicant sought an order for costs against the Costs Respondent pursuant to s.400A of the FW Act. The grounds set out in that application were as follows:
1. The Applicant failed to bring their claim in the required 21 days and provided no reasonable excuse in relation to the delay to bring the matter to the FWC.
2. The grounds provided in relation to withdraw (sic) their application were the same grounds provided in their application in support of being able to bring their claim out of time. In light of this, these actions go towards the claim being vexatious and without reasonable cause.
3. There was also no reasonable prospects of success given the response provided by the Respondent and the Applicant subsequently withdrew their application.
4. It is also clear that the application made by the Applicant was made vexatiously and without reasonable cause. The Respondent notes that as outlined in their Form F3, the Applicant continued to shop with the Respondent and on the first occasion where the Applicant encountered a new staff member, had filed their application in the following days.
5. Considering the significant time delay in bringing their application, it should have been clear to the Applicant that there was no reasonable prospects of success as their claim was evidently vexatious and without reasonable cause.
The application sought an order for costs referrable to the period commencing 18 May to 4 June inclusive. In its Outline of Submissions filed prior to the hearing of the costs issue, the Costs Applicant sought further orders for costs for the period from 5 June until the date of the costs hearing.
The matter was listed for hearing on 18 July 2023. Prior to the hearing, directions had been made for the filing of submissions. Brief written submissions were filed by both parties and permission was granted for both parties to be legally represented at the costs hearing.
Submissions
The Costs Applicant made the following written submissions:
1. The Cost Applicant was a party to a matter before the Fair Work Commission brought by the Cost Respondent.
2. The Cost Respondent made an application vexatiously and without reasonable cause, pursuant to section 611(2)(a) of the Fair Work Act.
3. The Cost Respondent made an application with the Fair Work Commission that it should have been reasonably apparent that their application had no reasonable prospects of success, pursuant to section 611(2)(b) Fair Work Act.
4. As a direct result of items (1) – (3) above, the Cost Respondent has caused the Cost Applicant to incur significant costs, pursuant to section 375B, 400A and 779A of the Fair Work Act.
5. The Cost Applicant entitled (sic) to make the Cost Application pursuant to section 377 of the Fair Work Act.
6. That the Cost Applicant be entitled to the costs incurred as a direct result of the Cost Respondents actions in the amount of $1,782.00 (incl. GST) up until 5 June 2023.
7. That the Cost Applicant be entitled to the costs incurred as a direct result of the Cost Respondents actions from 5 June 2023 up until the completion of the Cost Hearing on 17 July 2023 which are estimated at up to $1,500.00. The Cost Applicant can provide an itemised Schedule of Costs in relation to costs incurred following 5 June 2023 that relate directly to the Cost Application.
The Costs Respondent’s written submissions were as follows:
1. ZMR was an employee with Barkley Hill P/L (employer) for period Aug 2018 (employer response asserts it is July 2019) to 22 January 2023. ZMR worked at the Pets Tucker. She had periodically assisted with the other 2 worksite(s) of the employer.
2. 22 Jan 2023 ZMR was notified of termination of employment, effective immediately. ZMR was on maternity leave at this time. Plans were in place for her to return to work soon. She was told on the phone that position was being made redundant. Termination letter was emailed on 5 February 2023.
3. Sometime later ZMR became aware that the employer had advertised, recruited, and filled the position. She felt that the termination was harsh, unreasonable, and unjust. She contacted FWC and filed for Unfair Dismissal (UFD) on 3 April 2023. The remedy she sought was clarification, apology etc. The application refers to her being on anti-depressants.
4. ZMR is a lay person and not an expert on industrial law. At this point in her life, she was a first-time mother, home on maternity leave with an infant child. She had limited financial means and did not engage legal representation due to financial restrictions.
5. Employer was represented and raised jurisdictional out of time objection to ZMR application, 23 May 2023. This was listed for jurisdictional objection-extension of time hearing by FWC on 5 June 2023. ZMR felt ill equipped to attend formal proceedings, especially when employer is represented. As such, she withdrew her UFD application.
Cost Application Form 6
6. This is a no cost jurisdiction, s611 Fair Work Act 2009. We dispute that the UFD application was vexatious, without cause or with nil prospect of success.
7. ZMR withdrew the UFD application as she could not afford legal representation, was under financial and emotional stress. The employer has always been represented.
8. ZMR’s application is not without reasonable prospect of success. We are let (sic) to believe that the employer has breached instruments of employment. We reserve our rights to bring other proceedings in due course. That is not a subject of this cost application.
9. Employer suggestion that the ZMR UFD application is vexatious merely because she continued to shop at Pets Tucker is preposterous. It breaches the rights of the shopping consumer. There are very few options available for pet owners in the regional town of Broken Hill. Any suggestion that ZMR should not shop at Pets Tucker merely because she initiated legal proceedings is unlawful and discriminatory.
10. If FWC grants cost to employer in this instance, it sends a wrong signal to future applicants:
a. FWC is a forum that encourages unrepresented litigants, leave needs to be sought by representatives. ZMR was one such application. She is not an expert in industrial law, legal process, or procedure.
b. The employer normally has better knowledge of industrial instruments. Here employer also engaged paid representative. Access to FWC should not be measured by financial means or industrial expertise.
c. ZMR was forced to engage legal representative, incurring cost which she could ill afford.
d. The employer has been irresponsible in bringing a cost application is a cost-free jurisdiction. This has caused ZMR financial hardship and emotional distress.
11. We seek that this application be dismissed.
The Costs Applicant filed a written reply taking issue with a number of the Costs Respondents submissions. Reference[1] was made in those reply submissions to s.611 even though no application had been made under that section. Each party relied on their written material at the hearing on 18 July 2023 and supplemented that material with brief oral submissions.
Consideration
Section 400A of the FW Act provides:
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.
The starting point for any consideration of costs in proceedings before the Commission is set out in s.611(1), that is, a person must bear their own costs in relation to a matter before the Commission. It is well recognised that s.400A is one of a number of express departures in the FW Act from that starting point. Section 400A provides the Commission with a discretionary power to award costs against a party to a matter arising under Part 3-2 of the FW Act if the Commission is satisfied that the party against whom costs orders are sought, caused the costs to be incurred by the other party because of an unreasonable act or omission of the first mentioned party in connection with the conduct or continuation of the matter.
Previous decisions of the Commission have made it clear that the power to award costs in industrial matters should be exercised with some caution and only in clear cases so as not to erode the broad principle embodied in s.611(1) and its antecedents that generally, parties are to bear their own costs.[2] Consequently, applicants with the benefit of a protective provision such as s.611 will rarely be ordered to pay costs. That approach has been adopted in relation to costs applications under s.400A.[3]
In Gugiatti v SolarisCare Foundation Ltd,[4]a Full Bench of the Commission observed that s. 400A(1) establishes two preconditions for the making of an order for costs under the subsection. The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.
Given the short history of the matter, it is apparent that there were only a limited number of possible acts or omissions on the part of the Costs Respondent that could be relied on by the Costs Applicant to form the basis of a costs application under s.400A. The first is the filing of the original application on 26 April 2023. The second is the conduct of the Cost Respondent following the filing of the application. The third is Costs Respondent’s election to discontinue the application on 26 May some 3 days after the employer response had been filed.
The Costs Applicant maintained that the application was brought outside the 21-day time limit and that the Costs Respondent provided no reasonable excuse in relation to the delay in bringing the matter to the Commission. They submitted that the application itself had no reasonable prospect of success and was made vexatiously and without reasonable cause.[5] They also submitted that given the delay in bringing the proceeding it should have been apparent to the Costs Respondent that there were no reasonable prospects of success and that the claim was ‘evidently vexatious and without reasonable cause.’[6] Some reliance was also placed on the fact that the Costs Respondent relied on the same grounds for discontinuing the application as were relied on in the application itself.
It is evident from the above that whilst the Costs Respondent’s application is brought under s.400A and no other section, the Costs Applicant’s arguments in large part adopt language that would be more appropriate to an application under s.611 of the FW Act. There are other aspects of the Costs Applicant’s submissions which are entirely misconceived. For example, the Costs Applicant submitted that ‘the Cost Respondent has caused the Cost Applicant to incur significant costs, pursuant to section 375B, 400A and 779A of the Fair Work Act’ and ‘the Cost Applicant is entitled to make the Cost Application pursuant to section 377 of the Fair Work Act.’ Plainly, none of sections 375B, 377 or 779A of the FW Act have any bearing on the current proceedings.
Notwithstanding these obvious deficiencies in the Costs Applicant’s arguments, the immediate question for consideration is whether the Costs Respondent engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter.
The FW Act draws a clear distinction between the different bases upon which awards of costs can be made. Section 400A is concerned with acts or omissions in connection with the ‘conduct or continuation’ of a matter. Section 375B, which relates to costs orders against parties in proceedings under s.365, is in similar terms to s.400A in that it refers to an unreasonable act or omission in connection with the ‘conduct or continuation of the dispute’.[7] A similar provision is made in relation to termination of employment matters arising under Part 6-4 of the FW Act.[8] On the other hand, section 611(2) is concerned with the circumstances relating to the making of, or responding to, an application. Sections 376 and 780, which relate to costs order against lawyers and paid agents, provide two bases upon which such orders can be made. The first is that costs have been incurred because the representative encouraged a person to ‘start, continue or respond to’ a dispute in specified circumstances. The second is in similar terms to s.400A, namely, that costs have been incurred because of an unreasonable act or omission of the representative in connection with ‘the conduct or continuation of the dispute’.[9]
Other decisions of the Commission have traversed the background to the introduction of these provisions.[10] It is unnecessary for me to repeat that background here. For present purposes it is sufficient to note that the Full Bench in Gugiatti concluded that section 400A ‘is concerned with unreasonable acts or omissions in connection with the “conduct or continuation” of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.’[11] In that case it is unnecessary for me to consider whether the application itself was an unreasonable act or omission that could give rise to a costs order under s.400A. The section does not confer any power to make an order simply on the basis that the application suffered from some deficiency, such as being brought without reasonable cause, at the outset.
Ultimately, after having received the company’s response on 23 May and considered her position, the Costs Respondent acted quickly to discontinue the proceeding. As a result of the discontinuance the Costs Applicant was not required to file any further material in the matter. The focus of the Cost Applicant’s submission was on the making of the application rather than what occurred thereafter. In any case I can discern nothing in the conduct of the Cost Respondent after the filing of the application that could be said to be an unreasonable act or omission on her part.
Although it is clearly possible that the failure to discontinue a matter could attract the operation of s.400A in appropriate circumstances, it is unlikely that filing a notice of discontinuance of itself would ever do so. Here the notice of discontinuance was filed shortly after the employer response and approximately one month after the application had been made. It brought the matter, and the necessity to incur legal costs, to an end. It did not cause legal costs to be incurred.
Having regard to the conclusions above, the preconditions for the making of an order for costs pursuant to s.400A have not been satisfied. The costs application is dismissed.
DEPUTY PRESIDENT
Appearances:
Ms Caitlin Sankey, Solicitor for the Cost Applicant
Ms Sorna Nachiappan, Solicitor for the Costs Respondent
Hearing details:
By Video using Microsoft Teams at 2:00pm AEST on Tuesday, 18 July 2023
[1] Costs Applicant Reply Submissions Court Book page 48.
[2] E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810.
[3] For example, see HCL Australia Services Pty Limited T/A HCL v Gautam Amba and Brett Wilson[2019] FWC 1891 at [34].
[4] [2016] FWCFB 2478.
[5] See Costs Applicant Outline of Submissions, Court Book page 46.
[6] Form F6 Costs Application, Court Book page 40.
[7] Fair Work Act 2009 (Cth) s 375B(1)(b).
[8] Ibid s 779A.
[9] Ibid ss Section 376(2), 780(2).
[10] Steven Cadd v Millennium Cleaning (Vic) Pty Ltd[2017] FWC 2473
[11] Op cit at paragraph [61]. The same approach has been applied in relation to costs applications in appeal proceedings, see Mercato Enterprises Pty Ltd (t/a Mercato e Cucina) v Joseph[2016] FWCFB 8112 at [20] and Rigby v BMS Retail Group Pty Ltd (t/a Champions IGA)[2016] FWCFB 7769 at [28].
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