Ms Tynneal Justice v Certainty Property Pty Ltd, Simon Peisley

[2024] FWC 2097

[2024] FWC 2097

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.365 – General protections

Ms Tynneal Justice
v

Certainty Property Pty Ltd, Simon Peisley

(C2023/7621)

COMMISSIONER TRAN MELBOURNE, 7 AUGUST 2024

Application for costs under s 375B and s 611 – application for costs dismissed.

1. This decision is about an application for costs orders under s 375B and 611 of the Fair Work Act 2009 (the Act). Ms Tynneal Justice seeks costs against her former employer, Certainty Property Pty Ltd (the Employer).

1. On 5 December 2023, Ms Tynneal Justice applied to the Commission. She said that her former employer, Certainty Property Pty Ltd, dismissed her because she raised that her pay was less than the Award rate of pay. She included the director and co-owner of her former employer, Simon Peisley, in her application.

1. The Employer responded by saying that it had not dismissed Ms Justice. It said that it believed Ms Justice had resigned.

1. Because the application is one under s 365 of the Act, the Commission usually conducts a conference to assist the parties to try to resolve that matter. If the matter cannot be resolved, the Commission issues a certificate which allows an applicant to apply to the Court. However, because of the decision in Coles v Milford, the Commission cannot conduct a conference to try to resolve a matter without first determining that there was a dismissal. So, when a respondent objects on the basis that it did not dismiss an applicant, the Commission must first decide that there is a dismissal before the matter can proceed.

1. In this matter, the Commission did not decide whether there was a dismissal because the Employer withdrew its jurisdictional objection on the day of the hearing.

1. Ms Justice then applied for costs, saying that the Employer was vexatious and unreasonable when it raised and maintained its objection that it had not dismissed her. Ms Justice says the Employer therefore caused her to incur the costs of preparing for the hearing about whether the Employer had dismissed her. Ms Justice seeks her costs for the entirety of the proceedings from when I issued directions on 10 January 2024 to the time that the Employer withdrew its jurisdictional objection during the hearing on 22 February 2024. Ms Justice seeks costs on an indemnity basis, or alternatively, in accordance with the Schedule of Costs in Schedule 3.1 of the Fair Work Regulations 2009.

1. Ms Justice made a forceful argument that where a respondent prosecutes a jurisdictional objection in a matter under s 365, this increases an applicant’s costs as the objection prevents the matter from being listed for a conciliation. Despite this, I have not found that the Employer in this matter responded to the application vexatiously or without reasonable cause, nor that its response had no reasonable prospects of success. Also, I have not found that the Employer unreasonably caused Ms Justice to incur costs. I therefore dismiss the application. My reasons follow.

Background Facts

1. In her application, submissions and supporting evidence, Ms Justice says that the Employer dismissed her during a Teams call on Thursday 16 November 2023 between her and Simon Peisley, director and owner of the Employer. The Employer responded to the application on 2 January 2024. The response was that it had not dismissed Ms Justice as it believed she resigned, either during the call or shortly after.

1. On 12 January 2024, Ms Justice’s legal representative sent an email to Mr Peisley. In that email, Ms Justice invited the Employer to withdraw its jurisdictional objection and included a recording and transcript of the Teams meeting.

1. After the matter was allocated to me, I issued directions on 10 January 2024 and held a case management conference on 8 February 2024. The parties filed materials in accordance with my directions.

1. During the case management conference on 8 February 2024, I granted permission for Ms Justice to be represented under s 596(2) of the Act. The Employer was not represented in conferences or hearings before me.

1. The jurisdictional matter was listed for hearing via Teams on Thursday 22 February 2024.

1. Shortly after the hearing commenced, the Employer withdrew its jurisdictional objection.

1. On 1 March 2024, Ms Justice applied under s 375B and 611 for an order for costs against the Employer.

1. On 2 April 2024, I issued a certificate under s 368 of the Act, having formed the view after I conducted a conference that all reasonable attempts to resolve the matter were not successful.

Materials relied upon

1. Ms Justice relies upon the following material:

-     Form F6 Application for costs

-     Written submissions dated 17 April 2024 and 17 May 2024 (submissions in reply)

-     Witness statement of Ms Leanne Tacey, Solicitor, Anderson Gray Lawyers, dated 11 April 2024; and

-     Digital Hearing book prepared for the substantive matter.

1. The Employer relies upon the following material:

   -     Written submissions filed 10 May 2024.

1. I determined this matter on the papers, on the Employer’s request and with Ms Justice’s agreement.

Legislative Requirements

1. In matters before the Commission and for proceedings under the Fair Work Act, the general rule is that parties bear their own costs.[1] In order to recover their costs from another party, an applicant must persuade the Commission that there are grounds under either the general rule contained in s 611 or under another relevant section, in this case, s 375B.

1. The exceptions to the general rule are:

- That an application or response was made vexatiously or without reasonable cause under s 611(2)(a);

- That an application or response had no reasonable prospects of success under s611(2)(b); or

- That an unreasonable act or omission in connection with the conduct or continuation of the dispute caused the other party to incur costs under s 375B, where an application has been made under s 365 (as this matter is).[2]

1. A Full Bench of the Commission in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing has said that the power to order costs under s 611(2) “should be exercised with caution and only in a clear case.”[3]

1. The Commission’s power to order costs against a party is discretionary, provided that the exceptions to the general rule are made out.

611(2)(a) – Did the Employer respond to the application, vexatiously or without reasonable cause?

1. I am not satisfied that the Employer responded to the application vexatiously. There was no evidence before me that the Employer’s motive or predominant purpose of the Employer’s response was to harass or embarrass Ms Justice or to gain a collateral advantage. Full Bench and Court authority is clear regarding the meaning and requirement to narrowly construe ‘vexatiously’ in this context.[4]

1. I am also not satisfied the Employer’s response was without reasonable cause. I do not, and should not, take into account that the Employer later withdrew its jurisdictional objection in ascertaining whether the response was without reasonable cause.[5] I must instead consider whether, on the facts apparent to the Employer, there was no substantial prospect of success such that the argument should not have been made.[6]

1. There was a factual contest about what occurred during the Teams call of 16 November 2024 and immediately following. Ms Justice made a recording, which was filed in evidence without objection. Ms Justice also provided a transcript of the recording. Both parties filed exchanges of emails and text messages. Ms Justice also relies on the Employer’s argument that it heard her say, “I quit” during the Teams call of 16 November 2024, which does not occur during the recording or appear in the transcript.

1. I observe that the Employer did not have the benefit of legal advice or representation so as to raise any arguments about whether my receipt of the recording and transcript into evidence could have been objected to.

1. Nevertheless, the recording and transcript do not make abundantly clear that there was a dismissal. Also, the exchanges of emails and text messages demonstrate that the issue of whether the Employer had dismissed Ms Justice was live at that point in time. Last, the Employer’s reliance on hearing “I quit” was not the sole basis upon which it raised its jurisdictional objection.

1. Therefore, it cannot be said that the response lacked reasonable cause as there was a point of law to be determined – that is whether what had occurred (which was factually disputed) was a dismissal at the initiative of the employer within the meaning of s 385 of the Act.

611(2)(b) – Should it have been reasonably apparent to the Employer that their response had no reasonable prospect of success?

1. The Employer argues that it was unrepresented in the substantive matter (which it is within its rights to be) and it was not unreasonable for it to raise the objection or decide to continue its objections, given its lack of legal training, knowledge and experience.

1. The Full Bench in Baker v Salva Resources Pty Ltd makes clear that the words – “should have been reasonably apparent” – within s 611(2)(b) imports an objective test.[7] The Full Bench also said that the second concept in s 611(2)(b) – “no reasonable prospect of success” – requires that an application or response is manifestly untenable or groundless or so lacking in merit that it is not reasonably arguable. While lack of knowledge and experience due to self-representation may be relevant for the exercise of the Commission’s discretion to award costs, it is not relevant in considering whether there are grounds under s 611(2)(b), as this requires an objective, rather than a subjective, test.

1. As detailed above, there are disputed facts in this matter and depending on the resolution of those facts, a point of law needed to be resolved. For the same reasons that I have not found the Employer’s response was made without reasonable cause, I do not find that it should have been reasonably apparent to the Employer that their response was manifestly untenable, groundless or so lacking in merit that it was not reasonably arguable. The argument may have had limited prospects of success but was nevertheless available to the Employer on the Employer’s asserted facts.

375B – Did an unreasonable act or omission of the Employer’s cause Ms Justice to incur costs?

1. Ms Justice argues that the Employer caused her to incur costs in the substantive application when it refused to withdraw its jurisdictional objection. Ms Tacey’s evidence, on behalf of Ms Justice, was that the first refusal was after she sent an email on 12 January 2024, which included the recording and transcript of the Teams call. Ms Justice also relies on the unreasonable refusal of the Employer to engage in settlement discussions, even after it had withdrawn its objection on 22 February 2024, which caused her to incur the further costs of making this application.

1. The Full Bench in Keep v Performance Automobiles Pty Ltd[8] said that the Commission’s power to order costs should only be exercised where there is clear evidence of unreasonable conduct, and quoted from the Supplementary Explanatory Memorandum to the Fair Work Amendment Bill 2013 (Cth) (which inserted s 375B into the Act):

“The power to award costs under new section 375B is not intended to prevent a party from robustly pursuing or defending a general protections dispute before the FWC. Rather, the power is intended to address the small proportion of litigants who pursue or defend disputes in an unreasonable manner.”

1. Again, the Employer submits that its lack of training, knowledge and experience meant that it could not assess the merits of its argument, and Ms Tacey’s letter of 12 January 2024 did not point to any case law or explain the principles to make it clear to a non-lawyer that the Employer’s case lacked prospects of success. Ms Justice argues, persuasively, that ignorance of the law is not a reason to allow a self-represented party to prosecute proceedings however it sees fit. I agree, too, with Muir JA in Du Boulay v Worrell & Ors[9] when he said that the other party is entitled to be protected from “oppressive or vexatious conduct regardless of whether that conduct arises out of ignorance, mistake or malice.” But first, Ms Justice must show that the Employer defended its case in an unreasonable – rather than a robust – manner, and I am not persuaded of this.

1. Ms Justice does not point to any particular act or omission in how the Employer conducted or continued its case which was unreasonable. Examples of unreasonable acts or omissions include unreasonably failing to comply with directions[10] or attend hearings[11] or the timing of filing an appeal notice shortly before the commencement of a hearing.[12] The submissions go no further than a making and maintenance of the response, rather than the manner in which the response was prosecuted, and for the above reasons I do not consider the Employer’s response was unreasonable.

I am not empowered to exercise my discretion

1. As I have not found that there are grounds for ordering costs under s 375B or s 611, I cannot exercise my discretion to award costs. The application is dismissed.

COMMISSIONER

Matter determined on the papers.

[1] See s 611(1) and Keep v Performance Automobiles Pty Ltd[2015] FWCFB 1956 at [15].

[2] There are similar provisions in relation to unfair and unlawful dismissal applications in ss 400A and 780 respectively. The Commission can also make an order for costs against lawyers and paid agents under s 376 and 401, where they relate to applications under s 365 and 394 respectively. None are relevant in this matter.

[3] [2014] FWCFB 810 at [27].

[4] See Church at [29].

[5] See Church at [30] and at [32] citing Imogen Pty Ltd v Sandwin (1996) 70 IR 254 at 257.

[6] See Church at [30].

[7] [2011] FWAFB 4014 at [10].

[8] [2015] FWCFB 1956 at [12]-[13].

[9] [2009] QCA 63 at [69], although I observe that matter arose from a jurisdiction in which costs follow the event, unlike this matter in the Commission.

[10] Application by Classic Ceramics (Importers) Pty Ltd [2023] FWC 1511.

[11] Gugiatti v Solaris Care Foundation[2016] FWCFB 2478.

[12] Church v Eastern Health T/A Eastern Health Great Health and Wellbeing [2014] FWCFB 810.

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