Ms Roslyn Boyce v Arakella Pty Ltd T/A GNS Wholesale Stationers

[2013] FWC 2599

[2013] FWC 2599

FAIR WORK COMMISSION

DECISION

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

Ms Roslyn Boyce
v
Arakella Pty Ltd T/A GNS Wholesale Stationers
(U2013/6797)

COMMISSIONER SPENCER BRISBANE, 16 MAY 2013

s.404 of the Act and r.16 of the Rules — application for security for costs against an Applicant — Application for relief from unfair dismissal.

[1] This decision relates to an interlocutory application filed by Arakella Pty Ltd T/A GNS Wholesale Stationers (the Respondent) in proceedings instigated by Ms Roslyn Boyce (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 security for payment of costs in relation to the substantive proceedings (the costs application).

[3] This matter has been the subject of conciliation before the Commission as presently constituted, but was unsuccessful. The costs application was filed by the Respondent on 22 March 2013. Directions were issued for the filing of materials in relation to the costs application. The parties have filed materials in accordance with those Directions.

[4] The Directions required the parties to advise the Commissioner whether they consented to the costs application being decided on the papers. In the absence of consent or objection to such course the Directions advised that the matter would be determined 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. On that basis, the Commission considered it appropriate to determine the costs application on the papers, with the material filed in accordance with Directions.

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

Background

[6] As this is an interlocutory application it is not appropriate to go into the full detail of the circumstances surrounding the termination of the Applicant’s employment as these matters go to the substantive proceedings. However, a brief summary of the circumstances is necessary to determine the costs application. It is noted that the matters raised in this section of the decision are not findings of fact by the Commission, but are simply referred to by way of background and context to the costs application. The parties are of differing views as to the precise circumstances surrounding the termination of the Applicant’s employment and evidence of such has not been tested through formal proceedings.

[7] Generally speaking, however, the Applicant has had a number of workplace injuries involving her back. On prior occasions, when the injury occurred or was aggravated, the Applicant was cleared as fit for work by Dr Michael Hickey, her General Practitioner.

[8] In October 2011 the Applicant suffered a further aggravation of her back injury and required time off until April 2012. In April 2012 the Applicant was cleared for full duties by Dr Hickey.

[9] Following this aggravation, the Respondent grew concerned about the Applicant’s ability to undertake the inherent requirements of her position and requested that the Applicant be further assessed by independent medical specialists.

[10] A number of assessments occurred in the intervening months by various persons of differing specialties.

[11] In late 2012 a directive was given to the Applicant to attend a further specialist to obtain an opinion regarding her return to work. That appointment was scheduled for 12 December 2012.

[12] Various correspondences were entered into between the Applicant’s solicitor and the Respondent regarding the Applicant’s attendance at the medical appointment. The result was that the Applicant did not attend the appointment.

[13] The Applicant was issued a final warning regarding her failure to attend the appointment.

[14] The Respondent issued a further directive to the Applicant to attend a medical specialist on 23 January 2013.

[15] The facts regarding the circumstances of this appointment and what occurred at the appointment are in contention between the parties and will not be discussed in any detail. The result was that the Applicant was not examined by the medical specialist.

[16] Following from this further failed appointment the Applicant’s employment was terminated by way of letter dated 7 February 2013 for “failure to follow a lawful and reasonable directive [, which] constitutes serious misconduct”.

Relevant legislation

[17] The costs application has primarily been filed pursuant to s.404 of the Act which provides:

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.

[18] Rule 16 of the Fair Work Australia Rules 2010 provides:

16 Security for the payment of costs

16.1 FWA may, on application, make an order directing a person to furnish security for the payment of costs in respect of a matter or part of a matter arising under Part 3-2 of the Act.

Note :  FWA will not ordinarily make such an order before the conclusion of conciliation.

16.2 The security must be of such amount, and furnished at such time and in such manner and form, as FWA directs.

16.3 FWA may, on further application:

(a) reduce or increase the amount of security directed to be given; and

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

16.4 Without limiting any other power which FWA may exercise, if FWA directs a person to furnish security for costs in respect of a matter or part of a matter arising under Part 3-2 of the Act, it may order that the matter be:

(a) adjourned until security is furnished; or

(b) adjourned indefinitely.

[19] The Commission may order costs against a party pursuant to s.611 of the Act which provides:

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).

Respondent submissions

[20] The Respondent relied upon those matters, as to the background of the termination of the Applicant’s employment, outlined in the “Form F3 Employer’s Response to Application for Unfair Dismissal Remedy” filed by the Respondent in respect of the substantive proceedings.

[21] The Respondent submitted that the Applicant had no reasonable prospects of success in the substantive proceedings and it followed that the Respondent may be successful in obtaining an order for costs against the Applicant in the substantive proceedings pursuant to s.611(2) of the Act. The Respondent presumably relied specifically upon s.611(2)(b) of the Act in this regard although it did not specifically submit such.

[22] The Respondent did not refer the Commission to case authority regarding what it considered must be taken into account when considering issuing an Order for security of costs. The Respondent submitted primarily that it had a valid reason for dismissing the Applicant.

[23] It is again noted that as the substantive proceedings are on foot the following discussion is a summary of the Respondent’s submissions only and does not reflect a finding of the Commission.

[24] The valid reason submitted by the Respondent was, in summary, that the Applicant had wilfully breached two lawful and reasonable directives to attend the medical appointments. The Respondent submitted that the Applicant’s failure to attend the medical appointments was done so without reasonable excuse.

[25] The Respondent concentrated upon the reasonableness of the directions to attend the medical assessments and referred the Commission to a number of cases in this regard. This matter will form a part of the substantive application and conclusive determinations are not able to be drawn on these substantive matters without sworn evidence. It is relevant to say the Respondent submitted that the directives to the Applicant were reasonable and that following the alleged breaches of those directives the Respondent followed a fair and reasonable process in effecting the termination of employment.

[26] The Respondent submitted that it had become aware through correspondence between the Applicant and the Respondent that the Applicant was suffering from financial hardship. Indeed the Respondent submitted that the Applicant had not received a wage since in or around June 2012.

[27] The Respondent submitted that it has already been put to expense in the matter by responding to the Applicant’s failure to comply on two occasions, the “significant quantities” of correspondence between the parties, a previous general protections claim filed by the Applicant in relation to the show cause process, and the substantive proceedings.

[28] The Respondent sought an Order that the Applicant provide security in the amount of $10,000 or an amount as the Commission determines is appropriate.

[29] In addition the Respondent submitted that, as to the merits, it was a question of judgment rather than a question of fact. The Respondent relied upon the evidence already filed, in particular the various medical reports that were prepared in relation to the Applicant. The Respondent specifically relied upon the report of Dr Chris Cunneen as being of the “highest credibility” and as clarifying the point “beyond doubt”.

[30] In relation to the Applicant’s evidence (discussed below) the Respondent submitted that evidence of assets, in this case of property, should not be considered as evidence of an ability to meet a costs order. The Respondent submitted that if the intention of providing evidence of the Applicant’s assets, was to demonstrate the Applicant could sell her house in order to meet any costs order that, in the submission of the Respondent, was further evidence of the Applicant’s inability to meet a costs order against her.

Applicant submissions and evidence

[31] The Applicant sought to rely upon the originating application and the material contained and attached thereto.

[32] The Applicant submitted that the decision to order security for costs was a discretionary one. The Applicant submitted that the relevant principles were summarised in the matter of Harris v Home Theatre Group Pty Ltd t/a Home Theatre Group (Harris). 1

[33] The Applicant disputed the alleged reasonableness of the requests made by the Respondent for the Applicant to attend for the medical examinations, the subject of the warning and the dismissal. The dispute between the parties primarily relates to this issue and would be the subject of consideration in the substantive proceedings.

[34] The Applicant submitted that the nature of the proceedings may result in no costs order being issued by the Commission, in the event that the Applicant is unsuccessful, or that any such costs order may be limited in its terms.

[35] The Applicant submitted that she had the ability to satisfy a costs order in the amount of $10,000 in the event that such costs order was made by the Commission. In this regard the Applicant provided an affidavit sworn on 11 April 2013 to which was annexed a title search regarding a property registered to the Applicant. The title search does not reveal any encumbrances on the property; in particular there is no registered mortgage on the property. The Applicant does not declare in her affidavit any unregistered encumbrances of the property. The Applicant submitted that her equity in the property was sufficient to enable her to meet any costs order.

[36] The Applicant submitted that no Order for security of costs should issue.

Consideration

[37] In the matter of Harris Commissioner Asbury (as she was then known) stated: 2

“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. 3 The making of an order for security for costs should not be oppressive in that it would stifle a reasonably arguable claim.4

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. 5 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 appellant6.

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 7 or arises from the conduct the party is complaining of.8 In such circumstances the party against whom the order is sought should not be shut out of litigation.

The prospects of success 9 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.” 10

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. 11 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.12 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.13

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. 14 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.15 It may also be relevant that the parties, or some of them, are legally aided.”

Conclusion

[38] I have taken into account all of these considerations in the case authority as set out.

[39] In the current matter, the case as presented, prior to the substantive hearing, does not persuade against the Applicant, and is not so persuasive that an order for security for costs should issue.

[40] The hearing of the Applicant’s case does not appear so hopeless or lacking in merit as to provide a definite reason to make the order requested. Further, the Applicant has demonstrated the holding of an asset; but in any event, whilst the financial position is relevant, the “impecuniosity of a party” does not immediately disentitle an Applicant from running their case or reciprocally entitle the Respondent to an order for the security of costs.

[41] Other remedies on the hearing of the matter, dependent on the outcome, may be open to the Respondent.

[42] The application for the payment of security for costs pursuant to s.404 of the Act is dismissed for the aforementioned reasons.

[43] I Order accordingly.

COMMISSIONER

 1   [2011] FWA 2910.

 2   Ibid at [7]-[12].

 3   Meribee Pastoral v ANZ Banking Group 193 CLR 502 at 513.

 4   Soh v Commonwealth [2008] FCA 1524 per Moore J at [10] cited in Clack v Collins (No 1) [2010] FCA 513 at 13.

 5   Meribee Pastoral v ANZ Banking Group op. cit. at 513-514; Clack v Collins op. cit. at 8 per Jago J citing: Moore v Macks [2007] FCA 509 at [20] per Mansfield J; Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90 per Sundberg J; Skyring v Sweeney [1999] FCA 61 at [6] and Cowell v Taylor (1885) 31 Ch D 34 at 38 per Bowen LJ.

 6   Singh v Secretary, Department of Employment and Workplace Relations op.cit at [11], [13] and [14]; Tait v Bindal People [2002] FCA 322 at [3] and [4].

 7   Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd (1998) op. cit. at 515.

 8   Soh v Commonwealth [2008] FCA 1524 per Moore J at [10].

 9   Clack v Collins op.cit. at [13]; Soh v Commonwealth [2008] FCA 1524 per Moore J at [10]; Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd (1998) op. cit. at 514.

 10   Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd op. cit. at 514.

 11   Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd op. cit. at 515 citing Devenish v Jewel Food Stores Pty Ltd [1990] HCA 35; 94 ALR 664 at 666.

 12   ibid at 26; Clack v Collins (No 1) [2010] FCA 513 (21 May 2010) at [8] per Jago J citing Moore v Macks [2007] FCA 509 at [20] per Mansfield J; Singh v Secretary, Department of Employment and Workplace Relations [2007] FCA 90 per Sundberg J; Skyring v Sweeney [1999] FCA 61 at [6] and Cowell v Taylor (1885) 31 Ch D 34 at 38 per Bowen LJ.

 13   Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd op. cit. At 514.

 14   Devenish v Jewel Food Stores Pty Ltd [1990] HCA 35; 94 ALR 664 at 666.

 15   Merribee Pastoral Industries Pty Ltd v ANZ Banking Group Ltd op. cit. at 515 citing Webster v Lampard [1993] HCA 20; 112 ALR 174 at 175-176 and Devenish v Jewel Food Stores Pty Ltd [1990] HCA 35; 94 ALR 664 at 665 - 666.

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