Ms Louise Kimber v Western Auger Drilling Pty Ltd

[2014] FWC 5857

[2014] FWC 5857

FAIR WORK COMMISSION

DECISION

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

Ms Louise Kimber
v
Western Auger Drilling Pty Ltd
(U2014/5107)

COMMISSIONER SPENCER BRISBANE, 8 OCTOBER 2014

Application for relief from unfair dismissal - Jurisdictional Objections - Application for order for security for costs.

[1] This decision relates to an interlocutory application filed by Western Auger Drilling Pty Ltd (the Respondent) in proceedings instigated by Ms Louise Kimber (the Applicant) pursuant to s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy (the substantive proceedings).

[2] The Respondent is seeking an Order that the Applicant furnish an amount of $6,500.00 for security for payment of costs (security for costs) in relation to the substantive proceedings (the application).

[3] The substantive matter has been the subject to conference before the Commission as presently constituted, and the matter was to be set for arbitration. Following this, the security for costs application was filed by the Respondent. Directions were issued for the filing of materials in relation to the security for costs application. The parties have filed materials in accordance with those Directions.

[4] The Directions also required the parties to advise whether they consented to the security for costs application being decided on the papers. Neither party has objected to the matter being determined on the papers or sought that the Commission convene a hearing in the matter. Taking into account the location of the parties, and the matters raised in the material, it was considered appropriate to determine the security for costs application on the papers.

[5] For the purposes of this Decision and to avoid confusion, the Applicant to the substantive proceedings (Ms Kimber) shall be referred to as “the Applicant” and the Respondent to the substantive proceedings (Western Auger Drilling Pty Ltd) shall be referred to as “the Respondent”.

[6] While all of the materials and evidence have not been referred to in this decision, all of such have been taken into account.

Background

[7] The Applicant filed the substantive application pursuant to s.394 and the Respondent objected on the basis that the Applicant had not served the minimum employment period and that there was no dismissal. This decision will deal only with the interlocutory application for security for the payment of costs filed by the Respondent.

Relevant Legislation

[8] The security for costs application has made pursuant to s.404, which states:

“404 Security for costs

The procedural rules may provide for the furnishing of security for the payment of costs in relation to matters arising under this Part.”

[9] Rule 55 of the Fair Work Commission Rules 2013 provides as follows:

“55 Order for security for payment of unfair dismissal matter costs

(1) A respondent or applicant in a matter before the Commission arising under Part 3-2 of the Act (unfair dismissal) may apply to the Commission for an order that a person provide security for the payment of costs in respect of the matter or part of the matter.

Note 1: The application must be in the approved form—see subrule 8(2).

Note 2: The Commission will not ordinarily make such an order before the conclusion of conciliation

(2) The person to whom an order made under subrule (1) applies must pay the amount of security at the time, and in the manner and form, required by the order.

(3) If the Commission orders that security for the payment of costs be given in respect of a matter or part of a matter arising under Part 3-2 of the Act, a respondent or applicant in the matter may apply to the Commission to:

(a) reduce or increase the amount of security to be provided; or

(b) vary the time at which, or manner or form in which, the security is to be provided.

(4) Without limiting any other power which the Commission may exercise, if the Commission directs a person to provide security for costs in relation to a matter or part of a matter arising under Part 3-2 of the Act, the Commission may order that the matter be:

(a) adjourned until security is provided; or

(b) adjourned indefinitely.”

[10] The relevant provisions in the Act under which costs may be sought by one party against another or their representative are set out as follows:

“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.”

“401 Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.

(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under this section 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.”

“611 Costs

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

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

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

(b) the FWC 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.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).”

Summary of Respondent’s submissions and evidence

[11] The Respondent submitted in support of its application for security for costs that the basis upon which the Commission should grant the security for costs is that the s.394 application is vexatious, without reasonable cause and has no reasonable prospects of success.

[12] The Respondent relied upon the Commission’s consideration in Harris v Home Theatre Group Pty Ltd T/as Home Theatre Group 1 (Harris) at [7] - [12], which identifies the factors which should be considered in determining whether to grant a security for costs

[13] The Respondent submitted that the Applicant’s claim is vexatious, without reasonable cause and has no reasonable prospects of success, for the following reasons:

“a) In accordance with s.382(a) of the Act, the Applicant is not a person protected from unfair dismissal because the Applicant has not completed the minimum employment period; and

(b) In accordance with the s.386(1) of the Act, the Applicant is not a person who has been dismissed because the Applicant’s employment was never terminated on the employer’s initiative.” 2

[14] The Respondent submitted that for the Applicant’s application to succeed, it would be required that she commenced working as an employee for the Respondent on or before 14 August 2013.

[15] The Respondent contended that the Applicant commenced employment on 2 January 2014 and that prior to this date, the Applicant was a contractor.

[16] In support of its application for security for costs, the Respondent referred to several features of the relationship between the Applicant and Respondent which, the Respondent submitted, indicates the Applicant was an independent contractor from March 2013 through to December 2013.

[17] In support of its contention that the Applicant was an independent contractor, the Respondent submitted that the Applicant issued 41 tax invoices between 14 March 2013 and 23 December 2013 3. The Respondent submitted that the Applicant held an ABN and issued weekly invoices which included GST. The Respondent submitted that the Applicant specifically requested work as a contractor.

[18] Additionally, the Respondent submitted that the Applicant had control over the role and the hours worked for the Respondent, was contracted to perform a single task, bore her own risk for making a profit or loss and was required to have her own insurance. The Respondent also submitted that the Applicant was required to provide other equipment apart from the Respondent’s laptop and mobile phone, was required to pay her own GST to the Australian Tax Office, was responsible for her own leave and was free to contract with and perform work for others.

[19] The Respondent submitted that the relevant authority on the jurisdictional matter objection as to whether the Applicant was an employee or contractor is Hollis v Vabu Pty Ltd 4 and makes note of the need to consider “the totality of the relationship” between parties.

[20] In reliance on Hollis v Vabu, the Respondent contended that the evidence before the Commission supports that the Applicant was an independent contractor from March 2013 until December 2013. For the purposes of this jurisdiction, the Respondent submitted that the Applicant was an only employee for a period commencing 2 January 2014 and concluding on 11 March 2014 at the initiative of the Applicant, and therefore, the period serving as an employee would not meet the period of minimum employment.

[21] The Respondent contended further the Applicant was not a protected person under the Act and as such, the application is vexatious. The Respondent stated that the Applicant was not terminated at the Respondent’s initiative, but rather abandoned her employment without cause during an investigation by the Respondent into complaints made by the Applicant.

[22] The Respondent has emphasised that the application does not relate to a dismissal within the definition of the Act, with particular reference to s.385(a) and s.386(a).

[23] The Respondent submitted that on 14 February 2014, the Applicant was suspended on full pay for the purposes of investigating a complaint made by the Applicant regarding bullying and sexual harassment.

[24] The Respondent referred to a letter sent on 18 February advising the Applicant that her employment had not been terminated and that she would continue to be paid and accrue all statutory entitlements.

[25] The Respondent submitted that, by correspondence sent 7 March 2014, it advised the Applicant that the investigation had been concluded and requested the Applicant advise if and when she would be able to return to work. When the Applicant did not reply within the nominated timeframe, the Respondent stated her employment was terminated without notice on 11 March 2014.

[26] In reply to the assertions of the Applicant, the Respondent emphatically denied that the Applicant was assaulted, injured, abused or terminated on 14 February 2014.

[27] The Respondent submitted that the jurisdictional arguments are not new and respectfully valid arguments to be raised.

[28] The Respondent contended that it has demonstrated that it has a strong case with good prospects of defending the Applicant’s claim and that the Applicant is currently employed and not impecunious and that as such the Commission should grant the security for costs.

[29] In response to the submission of the Applicant with regards to the application for security for costs, the Respondent has contended that the Applicant has failed to distinguish itself from the authorities submitted by the Respondent or adequately reply to the claims made.

[30] The Respondent contended that the application for security for costs is not vexatious and is meritorious.

Summary of Applicant submissions and evidence

[31] The Applicant contended that there is a reasonable basis to support its claim, and that the evidence in support of the Applicant’s position is such that the Applicant has reasonable prospects of success.

[32] Further, the Applicant contended that the state of the law with regards to classification as an employee or independent contractor in terms of eligibility to bring an unfair dismissal claim are questions for determination and do not make s.394 applications vexatious.

[33] The Applicant contended that the application for security for costs is itself vexatious and has been commenced to cause the Applicant to incur legal costs in opposing the Application and that if not vexatious the application for security for costs is certainly without reasonable cause.

[34] The Applicant submitted that in relation to the jurisdiction test of employee contracts the relevant authority for consideration is On Call Interpreters + Translators Agency Pty Ltd v Commissions of Taxation (No 3)  5, which identifies at [188] - [220] several factors for consideration in distinguishing an independent contractor from an employee.

[35] The Applicant submitted that it has strong evidence to demonstrate that for the purposes of the Act the Applicant was an employee, at least, from the 11 July 2013 and was assaulted and unfairly dismissed on the 14 February 2014. The Applicant submitted that changes to the rate on 11 July 2013 shown on her invoices and an email dated 6 June 2013, which refer to the Applicant wishing to take up a full-time (employment) opportunity with the Respondent, are evidence of the Applicant’s argument that she was an employee.

[36] The Applicant submitted that there was corroborating evidence of an assault on the Applicant which included medical records, a police complaint, visits to the hospital and medical centre and the findings of WorkCover.

[37] The Applicant contended that letters sent by Mr Riwoe were done so after the occurrences to which the primary s.394 application relate and should be regarded as merely “rear guard action” 6, which is a point to be examined in detail on the substantive hearing.

[38] The Applicant stated in her affidavit that she is currently employed and annexed a copy of her payslip. The Applicant stated that she owned her own car, with an approximate value of $12,000.00, and horses and horse tack with a combined value of approximately $13,000.00.

[39] The Applicant stated that in the event of her paying security for costs, her ability to proceed would be affected. The Applicant also stated that she was informed and believed that she had a reasonably arguable claim.

[40] The Applicant submitted that the application for security for costs should be dismissed and that the Respondent should be ordered to pay the Applicant’s costs of and incidental to the security for costs application. No formal costs application was received.

Conclusion

[41] The power of the commission to order security for costs is found in s.404 as set out. This is a discretionary power. Consideration is given to whether a potential order for costs could be enforced against the party. The Full Bench in Mr Riccardo Zornada
v St John Ambulance Australia (Western Australia) Inc 7 considered the principles applying to security for costs applications as follows:

“Security for costs

[34] Commissioner Asbury, as she then was, outlined the principles to be considered in assessing whether to grant an order for security for costs in Harris v Home Theatre Group t/as Home Theatre Group 12:

“[7] Principles relevant to the making of orders for security of costs can be summarised as follows. There is no absolute rule to control the exercise of the discretion to order security for costs, and what should be done in each case depends on the circumstances of the case with the governing consideration being what is required by the justice of the matter. The making of an order for security for costs should not be oppressive in that it would stifle a reasonably arguable claim.

[8] The financial position of the party against whom the order is sought, will be relevant in a number of circumstances. There is no absolute rule that impecuniosity of a party will entitle its opponent to an order for security for costs. There is also a general rule that poverty should not be a bar to a person prosecuting a claim at first instance. On appeal, the question of security is to be determined differently on the basis that the appellant has had his or her day in court, and should not be given a “free hit”, particularly in circumstances where the costs of a proceeding below had not been paid by the appellant.

[9] In cases where the impecuniosity of the party against whom the order for security for costs is sought, it is relevant that the impecuniosity is itself a matter which the litigation may help to cure or arises from the conduct the party is complaining of. In such circumstances the party against whom the order is sought should not be shut out of litigation.

[10] The prospects of success and the strength of the case of the party resisting the order is relevant. In Merribee (Supra) Kirby J said (citations omitted):

“Another consideration that has sometimes been judged to be relevant is the strength of the case of the party resisting an order that it provide security for costs and evaluation (necessarily tentative) of its prospects of success. Thus, the fact that a party has secured special leave to argue its case on appeal has been thought a relevant consideration in some circumstances. Similarly, if a proceeding appeared hopeless and such as was bound to fail, the lack of apparent merit in a party’s case might be a reason for ordering it to provide security for the costs to which, it appears, it is needlessly putting its opponent. Such a consideration would need to be exercised with care, given that the real merits of a case might not emerge until the final hearing or might not sufficiently emerge in the necessarily brief proceedings typically involved in an application for security of costs. Furthermore, if a party asserts that its opponent’s proceedings are manifestly lacking in legal merit, other remedies are available to it to protect it from needless vexation.”

[11] In relation to costs, it is relevant that the nature of a proceeding is such that, even if successful, an order for costs might not be made or might be limited. The inability of a party to meet the costs of an unsuccessful proceeding, or the risk that a cost order will not be satisfied is also relevant to the exercise of the discretion. Other related considerations are that a party is, or is likely to be absent from the jurisdiction when a decision is made and has no, or few assets within the jurisdiction.

[12] There may also be aspects of public interest which are relevant to the exercise of the discretion to make an order for security for costs, such as an application raising matters of general public importance, quite apart from the interests of the parties. Other matters that have been considered relevant are that a hearing of the proceedings is close at hand, or the party seeking the order has delayed its application for such an order. It may also be relevant that the parties, or some of them, are legally aided.

...

[35] We agree with the summary provided by her Honour. We further note that costs orders in this jurisdiction are extraordinary, and security for costs orders even more so. This is because the Act reflects the longstanding principle that costs will not be awarded against parties in industrial proceedings, other than in exceptional circumstances. Costs are limited to circumstances where the proceedings have been commenced vexatiously, without reasonable cause, or in circumstances where it should have been reasonably apparent that the application had no reasonable prospect of success. 13 It should be noted that a proceeding is not to be classed as being instituted without reasonable cause simply because it fails14, but rather in circumstances where the applicant’s own version of the facts, it is clear that the proceeding must fail.15

[36] Accordingly, the Commission should award security for costs only in the rarest of circumstances, once the Commission has balanced the merits of the application, the financial position of the parties, and what is just in the circumstances.”(References omitted).

[42] Commissioner Williams in Deeney v Patrick Projects Pty Ltd 8observed as follows:

“...[38] In the Harris decision Commissioner Asbury, as she was then, placed some emphasis on the fact that even if the Home Theatre Group, the party seeking the security for payment of costs order, did successfully defend the substantive unfair dismissal application being pursued by Ms Harris it was not automatic that an order for costs would be made 2. The Commissioner in this decision quite properly referred to the power to award costs as it was then provided for in section 611 of the Act. Obviously since that time with the insertion of section 400A there is an expanded range of circumstances in which the Act now envisages cost orders may be made and the Harris decision needs to be considered in this context.

[39] Similarly the Full Bench’s statement above that, “Costs are limited to circumstances where the proceedings have been commenced vexatiously, without reasonable cause, or in circumstances where it should have been reasonably apparent that the application had no reasonable prospect of success.” was made in the context of considering a security for payment of costs order which had been made concerning a dismissal which had taken effect before 1 January 2013. The Full Bench’s statement and its observations that costs orders in this jurisdiction are extraordinary and are not make other that in exception circumstances needs to be understood as a reference to section 611 of the Act only.

[40] As such the Full Bench’s observations in paragraphs [35] and [36] in the Zornada case did not have regard for section 400A of the Act which allows costs orders to be made against a party to an unfair dismissal remedy application because of an unreasonable act or omission in connection with the conduct or continuation of a matter. This is a broader range of conduct and behaviour than the Full Bench was referring to and will include many situations that would not come within section 611 of the Act.

[41] The insertion of section 400A of the Act and the amendments to section 401 has deliberately “lowered the bar” for the ordering of costs in unfair dismissal remedy applications and the Full Bench’s approach in the Zornado case is not binding for matters concerning dismissals that occurred since 1 January 2013. I do accept however that otherwise the principles identified in the Harris case and endorsed in the Zornado case are applicable to this matter...”

[43] Commissioner Williams in Deeney, in relation to the amendments to the Fair Work Act, also referred to the Explanatory Memorandum for the Fair Work Amendment Bill 2012 as follows 9:

“Part 3 – Costs orders against parties

Fair Work Act 2009

168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.

172. This amendment responds to Panel recommendation 45.

173. Subsection 400A(2) provides that the power to award costs against one party in these circumstances is only exercisable if the other party to the matter makes an application in accordance with section 402. Subsection 400A(3) makes clear that the new power to award costs under subsection 400A(1) operates in addition to subsection 611(2), which enables the FWC to make costs orders against a person in certain circumstances, such as where an application is made vexatiously or without reasonable cause.

174. Section 402 provides that an application for costs must be made within 14 days after a matter is determined by the FWC or discontinued.

175. Item 5 amends section 402 consequential on the insertion of new section 400A in item 4. Item 6 amends paragraph 403(1)(b) to insert a reference to section 400A so that a schedule of costs can be prescribed for the purposes of a costs order made under that section.

176. Item 7 amends subsection 403(2), which sets out how the FWC can award costs if a schedule of costs is prescribed, to insert a reference to section 400A.

177. Item 8 amends the note to subsection 611(2) to highlight the FWC’s ability to make an order for costs under new section 400A.

178. Item 1 of Schedule 11 inserts a new Schedule 3 into the FW Act. Item 12 of Schedule 3 provides for these amendments to apply in relation to dismissals that take effect after the commencement of this Part.

Part 4 – Costs orders against lawyers and paid agents

Fair Work Act 2009

179. Section 401 currently enables FWA to award costs against a lawyer or paid agent in certain circumstances, but only where FWA has granted permission under section 596 for them to represent a party in unfair dismissal proceedings. Item 9 replaces subsection 401(1) with new subsections 401(1) and 401(1A), under which this power will no longer depend on the FWC having granted permission under section 596.

180. New subsections 401(1) and 401(1A) will provide a stronger deterrent for lawyers and paid agents from encouraging parties to bring or continue speculative unfair dismissal claims, particularly claims they know have no reasonable prospect of success. The provision will also deter lawyers or paid agents from unreasonably encouraging a party to defend a claim or make a jurisdictional argument where there is no prospect of the argument succeeding. It will act as a stronger deterrent than the current provision as it will make lawyers and paid agents subject to the possibility of adverse costs orders even if they are not granted, or do not seek, permission to represent the party in the matter before the FWC.

181. Item 9 repeals subsection 401(1) and replaces it with new subsections 401(1) and (1A). New subsection 401(1) provides that the section applies if:

• an application for an unfair dismissal remedy has been made under section 394

• a lawyer or paid agent (the representative) has been engaged by a party to represent them in the matter, and

• the party is required to seek the FWC’s permission under section 596 to be represented by the representative.

182. New subsection 401(1A) sets out the grounds on which an order for costs is available against a representative. Costs are available where the FWC is satisfied that the representative caused costs to be incurred because:

• the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter (subsection 401(1A)(a)), or

• of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter (subsection 401(1A)(b)).

183. The addition of the words “or respond to” in new subsection 401(1A)(a)) makes clear that costs are also available against employer representatives who encourage an employer to defend a claim where there is no reasonable prospect of the defence succeeding.

184. An example of where the FWC may award costs against a representative under new item 401(1A) is where the representative knows that his or her client’s unfair dismissal claim is dishonest or without foundation but still actively encourages them to proceed with the claim to try and extract a remedy such as a financial settlement from the employer.”

[44] The Respondent’s application and submissions were based on s.611 of the Act and there is no allegation of unreasonable acts or omissions under s.400A of the Act.

[45] The issue for consideration therefore in making the determination whether to award security for costs is whether the claim of the Applicant is vexatious, without reasonable cause, or has no reasonable prospects of success, to the extent that it would necessitate the indemnification of the Respondent against the costs of responding to the application.

[46] For the claim to be vexatious, it must be inherently hopeless or without reasonable prospects of success. As this is an interlocutory application, it is not appropriate to provide full determination of the circumstances surrounding the termination of employment, as those are matters for the substantive proceedings. Only a brief summary of the relevant facts and circumstances of both cases has been provided to determine this application.

[47] Both parties have in their submissions made contentions as to the relevant strength of the Applicant’s claim.

[48] The contention of the Respondent has given much weight to the argument that the jurisdiction of the Commission is not invoked, having added particular emphasis to the fact that, on the Respondent’s interpretation of the applicable authorities and the Act, the Applicant was not a person protected from unfair dismissal or dismissed within the meaning of the Act.

[49] The Applicant has in its response contended that it would be able to successfully overcome the inherent issues in its application, through demonstrating that the employee was a person protected from unfair dismissal and that she was dismissed.

[50] Accordingly, for the purposes of awarding security for costs where the claim of the Applicant is inherently hopeless and as such vexatious, it is required that the Commission is satisfied that the Respondent’s application of the Act and applicable authorities is correct and preferable to an extent that any argument to the contrary is bound to fail.

[51] The contention of the Respondent, that Hollis v Vabu Pty Ltd 10 is an applicable authority for determining whether a person should be regarded as an employee or contractor for the purposes of the act, is correct; but the application of an authority does not preclude the consideration of other authorities, nor is the application to which this decision relates the appropriate application for an assessment by default of the jurisdictional objections of which case the Commission finds preferable, in circumstances where the evidence and submissions in the jurisdictional matter have not been heard and determined nor has it been possible to give such an appropriate preliminary consideration given only the limited material provided in this alternative application.

[52] It is clear that each party has a substantive amount of evidence which support their respective positions, it is clear also that each party contends that the authorities referred to support their position. It must be noted that there is a wider range of relevant authorities to be fully considered properly against the facts.

[53] I adopt the principles endorsed by the Full Bench in Mr Riccardo Zornada
v St John Ambulance Australia (Western Australia) Inc. It is not for the Commission at this stage to assess in full the relevant strength of the parties’ positions, only whether it considers that each party has an arguable position which has reasonable prospects of success at hearing. In accordance with the exercise of the discretion, it is noted in Harris v Home Theatre Group Pty Ltd T/as Home Theatre Group 11 as follows:

“The effect of s.385(c) of the FW Act is to deprive a dismissed employee of access to relief that is otherwise generally available to dismissed employees on the ground that their dismissal is harsh, unjust or unreasonable, in circumstances where the employer is a small business and has complied with the Code. If this argument succeeds, the proceedings in the substantive application will be significantly curtailed. This is a protection from vexation, of which Home Theatre Group Pty Ltd has availed itself. It is only if this argument does not succeed that Home Theatre Group Pty Ltd will be required to defend the substantive application with respect to whether the dismissal was unfair on the basis that it was harsh, unjust or unreasonable.”

[54] Limited material was provided by the Applicant as to her financial status. The Applicant stated that her ability to proceed would be affected in the event of her paying security for costs.

[55] The matters raised above have been considered as to whether to exercise the discretion to order the security for payment of costs. The Applicant is not impecunious on the basis of the limited material provided, however the Applicant is legally represented (as is the Respondent) and any Order for security for payment of costs may well prejudice her ability to proceed.

[56] In circumstances where the employer has successfully defended a substantive application, an order for costs does not automatically flow. As with a costs order, an order for security for costs should be approached with caution. In the current circumstances, no definitive assessment can be made as to the preliminary threshold jurisdiction issues or the overall substantive application that would support this order for security for costs. Both cases currently are arguable. Directions can be set for these jurisdictional issues to be determined initially prior to the substantive matter, and potentially determined on the papers. Directions will be set for the jurisdictional issues.

[57] In all circumstances of this matter, it is not a case where the discretion to make an order for the security for payment of costs should be exercised.

[58] The application for an order for the security of such payment made pursuant to s.404 is therefore dismissed. I Order accordingly.

COMMISSIONER

 1   Harris v Home Theatre Group Pty Ltd T/as Home Theatre Group [2011] FWA 2910

 2   Respondent’s submissions filed 1 July 2014 at page 7

 3   Affidavit of Jodie Maree Giles, sworn 1 July 2014 and Exhibit JMG-1

 4   Hollis v Vabu Pty Ltd (2001) 207 CLR 21 at (33)

 5   On Call Interpreters + Translators Agency Pty Ltd v Commissions of Taxation (No 3) [2011] FCA 366

 6   Applicant’s submissions filed 18 July 2014 at page 4

 7   Mr Riccardo Zornada v St John Ambulance Australia (Western Australia) Inc[2013] FWCFB 8255

 8   [2014] FWC 6700 at [38] to [41]

 9   Deeney v Patrick Projects Pty Ltd[2014] FWC 6700 at [35]

 10   Hollis v Vabu Pty Ltd (2001) 207 CLR 21

 11   Harris v Home Theatre Group Pty Ltd T/as Home Theatre Group [2011] FWA 2910 at [31]

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