Muzzicato v New Aged Cleaning Services Pty Ltd - [2011] FMCA 1044

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MUZZICATO v NEW AGED CLEANING SERVICES PTY LTD

[2011] FMCA 1044

INDUSTRIAL LAW – Dismissal – contravention of general protection – workplace right – dismissal for serious misconduct – summary dismissal.

COSTS – Rejection of offer an unreasonable act attracting costs under s.570(2)(b) of Fair Work Act 2009.

Fair Work Act 2009, s.570(2)(a) & (b)
Federal Court Act of Australia Act 1976, s.31A
Federal Magistrates Court Rules 2001, Rule 13.10(a)

Spencer v Commonwealth 241 CLR 118

Applicant:

GIUSEPPE MUZZICATO

Respondent:

NEW AGED CLEANING SERVICES PTY LTD

File Number:

MLG 894 of 2011

Judgment of:

O'Dwyer FM

Hearing date:

1 December 2011

Date of Last Submission:

1 December 2011

Delivered at:

Melbourne

Delivered on:

1 December 2011

REPRESENTATION

Counsel for the Applicant:

Ms Vogel

Solicitors for the Applicant:

Hymans Solicitors

Counsel for the Respondent:

Mr McKenney

Solicitor for the Respondent:

Mr Colquhoun of Victoria Employers Chamber of Commerce and Industry

THE COURT ORDERS THAT:

The application filed 28 June 2011 is dismissed pursuant to Rule 13.10(a) of the Federal Magistrates Court Rules 2001.
Pursuant to s.570(2)(b) of the Fair Work Act 2009, the Applicant pay the Respondent’s costs from 7 November 2011 to date as agreed and failing agreement such costs to be taxed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 894 of 2011

GIUSEPPE MUZZICATO

Applicant

And

NEW AGED CLEANING SERVICES PTY LTD

Respondent

REASONS FOR JUDGMENT

(ex tempore)

This matter comes before me today on a final hearing of an application by Mr Muzzicato for compensation arising out of an alleged dismissal in contravention of a general protection. In support of his application, he has filed an affidavit setting out his understanding of the circumstances that lead to his dismissal on 17 May 2011. Before the matter proceeded by way of a final hearing the Respondent made application for summary dismissal under Rule 13.10(a) of the Federal Magistrates Court Rules 2001 on the basis that there is no reasonable prospect of success on the part of the Applicant’s case.
In support of that application, the Respondent highlights a number of aspects. First of all the Respondent highlights that this is an application that bases its claim on adverse action on the exercise of workplace rights by the Applicant. The history given of the Applicant of those workplace rights has a significantly long history, where he outlines in both the Statement of Claim, supported in his affidavit, of incidences that go back as far as 9 December 2009, on which occasion there was an allegation and complaint made by the Applicant about racist comments made to him by a fellow employee to the extent of referring to his Italian ethnicity, calling him ‘a wog’ and telling him ‘to go home’. That’s my modification of the language used.
Thereafter, there are a number of other incidents, significantly centred around the complaint made by the Applicant of smoking in the workplace, or indeed the trucks of the employer, in breach of the employer’s own no smoking ban in trucks.
Those complaints, as I say, have a fairly long history. There’s one where there’s some confusion as to when it happened - one alleged to be in March 2010, but in the Statement of Claim referred to as

March 2011. There’s the “Williams smoking” complaint which was

5 August 2010, and there was a further smoking complaint made in January of 2011. These complaints were made under his entitlement to a workplace right; but what happened thereafter is significant.

What happened thereafter is that on 29 April 2011, an incident took place in the offices of the Respondent where the director and manager of operations, Mr Newman was confronted by the Applicant in circumstances where there were certainly raised voices from the evidence presented by Mr Newman and all those who were present, and to the extent that two other employees, on the face of the material, lodged independent complaints about the conduct of the Applicant on that occasion. They expressed concerns about their welfare.
In response to that incident on 29 April 2011 there was an attempt by Mr Newman to arrange an appointment for 11 May 2011 to discuss what happened on that day with the Applicant, but the Applicant believed he was still on holidays and didn’t make that particular appointment. Thereafter, however, a further appointment was made for 16 May 2011, on which occasion there is affidavit material provided by the Respondent indicating that there was a significant incident at that appointment whereby personal concerns for safety were raised about safety to an employee of the Respondent, namely Mr Newman, and also an independent person who was there as a witness, Mr Hollander.
Now, the basis of the application before me for summary dismissal is that the Statement of Claim is deficient in that it certainly outlines the exercise by the Applicant of workplace rights, but fails to draw the necessary causal nexus between that exercise and his dismissal on

17 May 2011. In my view, an examination of the Statement of Claim shows it to be certainly deficient in that regard. In addition, the Respondent says that the affidavit material provided to the Court in support of the Applicant’s claim is similarly deficient in drawing the necessary nexus between the dismissal and the exercise of workplace rights.
It is interesting to note that in the affidavit material of the Applicant he has exhibited his letter of dismissal which is dated 16 May 2011 and a reading of that letter clearly spells out the reasons given by the Respondent for dismissing him in some considerable detail. That is exhibited to the Applicant’s affidavit, but there is no attempt by the Applicant in any of his material, but particularly his affidavit, to contest the grounds that are set out in any way. Indeed, he does not seem to dispute the nature of his own conduct on that occasion when the opportunity was there for him to do so.
In those circumstances the Respondent says that the Applicant has failed to at least set out the objective facts for a claim. The Respondent also goes further to say that on the face of facts set out in its affidavit material and that of the Applicant, when compared, show a significant factual basis for the position adopted by the Respondent relative to the almost non existent factual basis for the grounds for the dismissal alleged by the Applicant. It is clear from the material filed that the dismissal was based upon serious misconduct on the part of the Applicant, and he has not addressed that in any way in his material by way of reply or answer.
The question of whether there is a “reasonable prospect of success” and the meaning of that phrase has been addressed in Spencer v Commonwealth[1] and the Court, in some detail, gave the history of the development of the law by comparing it to the old understanding of summary dismissal applications where cases would have to show that they were hopeless before they were actually dismissed, noting it was a very rare event that such summary dismissals were granted. But in determining that phrase the High Court was, of course, considering s.31A of the Federal Court Act of Australia Act 1976. It is in the same terms as the Federal Magistrates Court Rules 2001, Rule 13.10(a). The High Court said as follows:
Section 31A(2) requires a practical judgment by the Federal Court as to whether the Applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissals should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue.
[1] [2010] HCA 28
But here in this particular case there is not a great deal of dispute on the factual issues, and indeed the Applicant seems to have foregone the opportunity readily presented to him to take some issue with the nature of the grounds given by the Respondent as to the circumstances of his dismissal. What he has done is focus on the exercise of his workplace rights in years past and then jumped without necessarily drawing the link to it being the grounds for his dismissal and in doing so has not challenged at all the evidence that has been presented by the Respondent in support of the reasons for dismissal; namely serious misconduct.
All told, I am persuaded that there are very serious deficiencies in the presentation of the Applicant’s claim and I’m also persuaded that in all of those circumstances, there is no reasonable prospect of the Applicant succeeding and I intend to dismiss summarily the application.

COSTS

Having dismissed the substantive application summarily, the Respondent to the substantive proceeding sought costs pursuant to section 570(2)(a) and (b). It is to be noted that subsection 570(2) reads:
The party may be ordered to pay the costs only if:
(a) the court is satisfied that the party instituted the proceeding vexatiously or without reasonable cause; or
(b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs;
By that terminology there is obviously a discretion in the Court as to whether costs should be ordered, but the terminology also infers, in my view, that the question of costs in these sort of proceedings under the Act are meant to be a rare event and the exercise of that section stipulates various grounds for its exercise.
The Respondent argues that it qualifies for an order for costs under subparagraph (a) of that section where it is said that if the Court is satisfied that the parties issued proceedings vexatiously or without reasonable cause. The Respondent equates my dismissal for no reasonable prospect of success as also equating with the expression without reasonable cause, and in doing so the Counsel for the Respondent highlights that the facts have always been the same throughout, known always from the very beginning before proceedings were instituted and up to this day have not changed in any way, and therefore a critical assessment of the Applicant’s case could, and should, have disclosed that there was no reasonable cause for making the claim.
The other subparagraph (b) provides that if the Court is satisfied that the parties unreasonable act or omission caused the other party to incur the costs I can make an order for costs. What is said to be an unreasonable act by the Respondent is that on 7 November 2011 an offer was made to the Applicant in the sum of $15,000, to be considered as an eligible termination payment, which offer obviously was rejected and that was an unreasonable act on the part of the Applicant, and therefore the Respondent qualifies for an order for costs under that subparagraph, if not the first.
As I said before, it is a discretionary power that I have and as a general imperative, as I see it or a general thrust of the Act is to avoid costs where normally costs follow the event. That is not obviously the way costs are considered under the Act. Whilst there is merit, in my view, about an argument under subparagraph (a) that the proceedings were issued without reasonable cause, I’m more persuaded that the rejection of the offer which appears to have been rejected out of hand, is what attracts costs in this particular proceeding because at that time a critical examination of the strength of the Applicant’s case should have disclosed that the offer was generous in all of the circumstances, and the unreasonable act of not accepting that offer, in my view, does attract an order for costs from that day inclusive to today. So I will make an order that the Applicant pay the Respondent’s costs as and from 7 November 2011 and in default of agreement those costs will be taxed.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of O'Dwyer FM

Date: