Ms Maria D'Ortenzio v Charles Parletta Real Estate Pty Ltd
[2018] FWCFB 4950
•23 AUGUST 2018
| [2018] FWCFB 4950 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Ms Maria D'Ortenzio
v
Charles Parletta Real Estate Pty Ltd
(C2018/3656)
VICE PRESIDENT CATANZARITI | SYDNEY, 23 AUGUST 2018 |
Permission to appeal sought against decision [2018] FWC 3286 of Commissioner Platt at Adelaide on 14 June 2018 in matter number U2018/2246.
[1] Ms Maria Theresa D’Ortenzio (Appellant) has lodged an appeal, for which permission to appeal is required, against a decision of Commissioner Platt in which he awarded costs against the Appellant (the Decision), 1 following the dismissal of her unfair dismissal application.2
[2] The Appellant lodged her notice of appeal on 4 July 2018 and the parties were heard on whether permission to appeal should be granted on 6 August 2018. Ms Katherine Eaton of counsel for the Appellant, and Mr Andrew Short solicitor for the Respondent, sought permission to appear. In accordance with s.596(2)(a) of the Fair Work Act2009 (Cth) (Act), we granted permission to appear to both parties.
[3] The Appellant commenced employment with LJ Hooker Glynde in 1990 progressing to Senior Property Manager. The Appellant worked with Mr Charles Parletta, the owner of Charles Parletta Real Estate Pty Ltd (Respondent) for many years, before she was dismissed on 7 August 2017.
[4] The Respondent brought applications for costs against both the Appellant and her representative, Mr Nicola Minicozzi pursuant to s.400A and s.611 of the Act. The application sought costs against the Appellant on the following basis:
a) Pursuant to s.611(2)(a), the Appellant had brought an unfair dismissal application vexatiously and without reasonable cause;
b) Pursuant to s.611(2)(b), it should have been reasonably apparent to the Appellant that her application had no reasonable prospect of success;
c) Pursuant to s.400A, the Appellant caused the Respondent to incur costs because of acts or omissions in connection with the conduct or continuation of the application.
Appeal grounds and submissions
[5] The Appellant’s grounds for appeal were as follows:
“1. The Commissioner erred in finding that the Appellant’s application was vexatious. In particular, in rejecting the applicant’s evidence that her application was motivated by her desire to obtain a remedy for her unfair dismissal the Commissioner failed to take into account relevant considerations, including
1.1 Her age of 58 years, her length of service of 27 years and her very limited IT skills;
1.2 Unchallenged evidence that she was of a fiery temperament and both she and Mr Parletta at times exchanged expletives and insults in the course of heated arguments but then continued to work well together;
1.3 Her entitlement to pursue her concerns as a shareholder in the Respondent;
1.4 Compensation as an available remedy in circumstances where the employment relationship has completely broken down;
1.5 Her unchallenged evidence that she acted at all times on legal advice, which did not include advice that her application might be considered vexatious.
2. In finding that the Appellant’s application was made without proper cause the Commissioner misapplied the objective test by failing to consider or acknowledge the Appellant’s unchallenged evidence (by way of her affidavit dated 10 April 2018) that she acted on legal advice, which did not include advice that her application had no reasonable basis.
3. The Commissioner failed to acknowledge or refer to the fact that the grounds for dismissal relied upon by the Respondent at the time of dismissal and when the application was made did not include the grounds ultimately supported by the Commission, nor did the Commission refer to its own findings that the Applicant was denied procedural fairness and that some of her alleged misconduct was appropriate and justified.
4. In finding the Appellant acted unreasonably in continuing her claim after 23 October 2017, the Commissioner misapplied the objective test as to what the Appellant should have known by failing to acknowledge or refer to her unchallenged evidence that she acted on legal advice.
5. The Commissioner also erred in failing to acknowledge that the importance and relevance of material provided to the Appellant at that time had not been tested or argued at a hearing.
6. In finding that the Appellant’s application did not have any prospect of success at the time of lodgement and in the alternative from 23 October 2017, the Commissioner has committed the same errors as identified in 2 and 5 above.
7. The Commissioner erred finding that the Appellant’s conduct in continuing her application following the conclusion of her evidence was delinquent. At that time the evidence, including the credibility, of the Respondent’s witnesses had not been tested. The Commissioner’s finding as to what she should have known at that point went far beyond his own comments at the time, and did not take into account her unchallenged evidence that she acted on her legal advice.
8. The Commissioner erred in ordering the Appellant to pay the respondent’s costs on a party-party basis from 8 August 2017 and on an indemnity basis from the conclusion of her evidence on 29 November 2017. The circumstances contemplated by s611(2) and s400A have not been established in law or in fact in this matter.”
Principles
[6] An appeal under s.604 of the Act is an appeal by way of rehearing. The Commission’s powers on appeal are only exercisable if there is an error on the part of the primary decision maker.3 There is no right to appeal, and an appeal may only be made with the permission of the Commission. Section 604(2) of the Act states:
“Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).”
[7] Section 400 of the Act provides:
“(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.
(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact.”
[8] In Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 78, 207 IR 177, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under s.400 of the Act as “a stringent one”. 4 The task of assessing whether the public interest is met is a discretionary one involving a broad value judgement.5 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“…the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of Decisions at first instance so that guidance from an appellate court is required, or where the Decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent Decisions dealing with similar matters”. 6
[9] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 7 However, the fact that the Member at first instance made an error at first instance is not necessarily a sufficient basis for the grant of permission to appeal.8
[10] The appeal before us relates to a Decision made under ss.400A and 611 of the Act. Submissions were made as to the correct approach to the application of s.400 in this appeal.
[11] The Appellant filed an outline of submissions on 30 July 2018. The submissions noted that an application pursuant to s.611(2) is an application brought under Part 5-1 of the Act, and an application pursuant to s.400A is an application brought under Part 3-2 of the Act and accepted that the public interest test must be satisfied for permission to appeal on a finding pursuant to s.400A and the order for indemnity costs upon which it is based. 9
[12] A recent Full Bench decision in the matter of Healthcare Pty Ltd T/A Baxter Healthcare v Mr Andrew Portelli 10 (Baxter) said the following in an appeal of a decision to dismiss costs applications under ss.400A and 611:
“[45] The appeal before us relates to the Decision to dismiss the Appellant’s Amended Costs Application. The Amended Costs Application was made under ss400A and 611 of the FW Act. Section 400A is in Part 3-2 of the FW Act and hence the more stringent test in respect of permission to appeal, in s.400, applies. Section 611 is in Part 5-1 of the FW Act and both parties contend that, consistent with the view expressed in Holland v Nude Pty Ltd (t/as Nude Delicafe), the part of the Decision which dismissed the Appellant’s s.611 costs application is not ‘a decision made by the FWC under [part 3-2]’ within the meaning of s.400(1). Hence the more stringent test in respect of permission to appeal does not apply.
[46] It follows that the relevant test in respect of permission to appeal depends upon which part of the appeal from the Decision is being considered. Section 400 applies to the appeal in respect of the decision to dismiss the Appellant’s s.400A application and permission must not be granted unless we consider that it is in the public interest to do so. However that part of the appeal which concerns the decision to dismiss the Appellant’s s.611 application is not subject to s.400 and the general test in respect of permission to appeal applies (as set out in [42] to [43] above.)”
[13] The Full Bench in Baxter made reference to a number of earlier decisions in noting the matter was not free from doubt. 11 We have decided to adopt the approach of the Full Bench in the decision of Baxter.
[14] Section 611 of the Act reads as follows:
“611 Costs
(1) [Person must bear own costs]
A person must bear the person’s own costs in relation to a matter before the FWC.
(2) [FWC may order person to bear costs of another person]
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) [Person must not contravene costs order]
A person to whom an order for costs applies must not contravene a term of an order.
Note: This section is a civil remedy provision (see Part 4-1).”
[15] Section 400A of the Act reads as follows:
“400A Costs orders against parties
(1) [Where FWC may order costs against a party]
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) [Power exercisable only on application by other party]
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) [Section does not limit FWC’s powers under s 611]
This section does not limit the FWC’s power to order costs under section 611.”
Consideration
[16] Appeal grounds 1 to 6 argue there is error because the application was not vexatious, or without proper cause, and that it would not have been reasonably apparent to the Appellant that her application had no reasonable prospects. The grounds of appeal variously relied on her age, her length of service, her temperament, her status as a shareholder, her capacity to seek compensation rather than reinstatement, and also a claim that she had acted on legal advice to claim her application did not fall within the matters in s.611(2)(a) or (b), or s.400A.
[17] It is further claimed that the reasons for dismissal did not encompass all of the grounds ultimately supported by the Commission and the importance and relevance of material provided to the Appellant at that time had not been tested or argued at a hearing.
[18] Appeal grounds 7 and 8 submit the Commissioner erred in finding that the Appellant’s conduct in continuing her application following the conclusion of her evidence was delinquent because the Respondent’s witnesses had not been tested at that time. Again this ground of appeal relies on the Appellant having acted on legal advice. It is submitted that the Commissioner erred in ordering the Appellant to pay the Respondent’s costs on a party-party basis from 8 August 2017 and on an indemnity basis from the conclusion of her evidence on 29 November 2017.
[19] As is apparent from the grounds of appeal much of the basis for the appeal turns on a proposition that the Appellant was acting on legal advice from either Mr Minicozzi or later a barrister Ms Kirsty Stewart, and after terminating her instructions to Mr Minicozzi and Ms Stewart, Mr Blairs of WearingLaw. In support of that argument the Appellant relied on her affidavit of 10 April 2018 prepared for the costs hearing at first instance.
[20] It was put that the Commissioner did not take into account a relevant consideration that the Appellant was acting on legal advice. The Appellant referred a Full Bench decision in Livingstones Australia v ICF (Australia) Pty Ltd T/A IC Frith & Associates 12(Livingstones), and what it described as the interrelationship between section 400A and s.401 of the Act. The Appellant’s submission appeared to proceed on the basis that the Decision failed to consider that the conduct of the Appellant’s legal representatives had not been impugned, and it was not challenged that the Appellant followed legal advice.
[21] Unlike the facts in Livingstones where the substantive case was yet to be heard, the Decision to award costs in this matter was made after the Commissioner had the benefit of hearing the whole of the matter and making findings concerning the conduct of the Appellant and her role in the matter relevant to costs. This included correspondence the Appellant had caused to be sent to the banks and her conversation with Mr Bonomi of LJ Hooker St Peters (the representative of a prospective purchaser of Mr Parletta’s business).
[22] The affidavit of 10 April 2018 included that the information the Appellant provided to Mr Minicozzi and Ms Stewart was consistent with the evidence that she provided at the hearing, and the information provided to Mr Blairs was consistent with the evidence she gave at the hearing.
[23] The Appellant said that she was never advised by Ms Stewart, Mr Minicozzi or Mr Blairs that her case might be vexatious or without reasonable cause or that her application had no reasonable prospect of success.
[24] The Appellant said in the affidavit that due to the extensive and ongoing communication with Mr Minicozzi and Ms Stewart she did not request a formal assessment of the merits of her case.
[25] It was apparent from the unchallenged decision of the Commissioner in the substantive matter that he had made a wide range of adverse findings about;
• the evidence and credibility of the Appellant including the matter of her increasing her own wage;
• rejecting her contention that she had instructed her solicitor Mr Minicozzi to write to the Commonwealth Bank of Australia and the National Bank of Australia because she was a concerned shareholder;
• rejecting her contention that the communications she directed toward Mr Bonomi were for any reason other than to sabotage the sale of the business; and
• the Appellant’s evidence not being credible in relation to her working relationship, because by the time she was dismissed the working relationship had been poisoned to the point of being totally dysfunctional.
[26] The Commissioner found the Appellant’s communication with the two banks was a breach of the specific terms of the Appellant’s contract of employment; there was no plausible explanation for the communication with Mr Bonomi other than to prevent or impede the sale of the business. The conduct of the Appellant in this regard was “treacherous, a breach of the express terms of her employment contract and fatally damaged her working relationship with Mr Parletta”. 13
[27] The Commissioner also found that the Appellant had unilaterally reduced another employee’s remuneration in a punitive manner; increased her own salary without express permission; the Appellant’s own conduct resulted in the complete breakdown of the working relationship between the Appellant and Mr Parletta; and the Appellant’s conduct in instructing Mr Minicozzi to communicate with the Banks and Mr Bonomi was antithetical to further the business and reputation of LJ Hooker Glynde.
[28] The Appellant’s affidavit of 10 April 2018 did not provide specific detail as to the nature of the instructions she gave to the various lawyers she instructed, including her correspondence to the banks and communication with Mr Bonomi. The affidavit only makes general statements about her instructions such as that it was consistent with the evidence that she provided at the hearing, or at the hearing. Whilst the affidavit is general in its terms about the nature of legal instructions given and advice received, it is clear the Appellant’s evidence at the hearing varied significantly from her earlier statements provided before the hearing.
[29] It is apparent from the Decision that the Commissioner took into account that the Appellant was legally represented, however also made clear findings concerning discrepancies between the Appellant’s evidence prepared for the hearing, what she knew to be the facts at the relevant times and what she said in her oral evidence. A lawyer’s advice can only be as good as the instructions received. The mere assertion that a party has acted on legal advice of itself cannot be a shield against a costs order when all indications are instructions to lawyers did not fairly represent the facts of the case as found. It is also wrong for the Appellant to suggest that the Commissioner did not have regard to the 10 April affidavit as it is clearly referred to in the Decision. 14
[30] As to the other grounds of appeal, none of those matters disclose an arguable case of appealable error. The conclusion that the application was vexatious does not rely on conduct on the part of Mr D’Ortenzio’s legal advisers as the findings were made based on the Appellant’s own conduct.
Conclusion
[31] The task of assessing whether the public interest test is met is a discretionary one involving broad value judgement. We have had regard to the considerations which may attract the public interest and we are not satisfied that it is in the public interest to grant permission to appeal. It follows that in respect of the appeal from the Decision to grant the Respondent’s s.400A application, permission to appeal must be refused.
[32] We are also not persuaded that the Appellant has established an arguable case of error in respect of the Commissioner’s Decision, or that a substantial injustice may result if permission is refused. We are also not persuaded that the Decision is attended by sufficient doubt so as to warrant its reconsideration. Accordingly, we do not propose to grant permission to appeal in relation to that part of the appeal which concerns the Decision to grant costs under s.611 of the Act.
[33] Permission to appeal is refused.
VICE PRESIDENT
Appearances:
Ms K Eaton, of Counsel, instructed by Mr D Blairs (WearingLaw) for the Appellant
Mr A Short, solicitor for the Respondent (MinterEllison)
Hearing details:
2018,
Sydney:
August 6
Printed by authority of the Commonwealth Government Printer
<PR620116>
1 [2018] FWC 3286; an Order (PR608100) was also issued to give effect to that Decision.
2 Maria D’Ortenzio v Charles Parletta Real Estate Pty Ltd T/A LJ Hooker Glynde[2018] FWC 1002.
3 Coal and Allied Operations Pty Limited Australian Industrial Relations Commission and others (2000) 203 CLR 194; 99 IR 309 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
4 Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 78, 207 IR 177 at [43].
5 O’Sullivan v Farrer (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 243 CLR 506 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 78, 207 IR 177 at [44] – [46].
6 [2010] FWAFB 5343, 197 IR 266 at [27].
7 Wan v Australian Industrial Relations Commission (2001) 116 FCR 481 at [30].
8 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343, 197 IR 266 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd T/A Mt Thorley Operations/Warkworth [2010] FWAFB 10089, 202 IR 388 at [28] affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 78, 207 IR 177; New South Wales Bar Association v McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office[2014] FWCFB 1663, (2014) 241 IR 177 at [28].
9 Appellants Outline of Submissions at paragraph [6].
10 [2017] FWCFB 3891.
11 [2017] FWCFB 3891 at [47].
12 Livingstones Australia v ICF (Australia) Pty Ltd T/A IC Frith & Associates[2014] FWCFB 1276 at [74].
13 Maria D’Ortenzio v Charles Parletta Real Estate Pty Ltd T/A LJ Hooker Glynde[2018] FWC 1002 at [219].
14 Decision at [24]-[25].
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