Nalbandian v Commonwealth of Australia (Australian Bureau of Statistics)
[2015] FCCA 2094
•7 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NALBANDIAN v COMMONWEALTH OF AUSTRALIA (AUSTRALIAN BUREAU OF STATISTICS) | [2015] FCCA 2094 |
| Catchwords: PRACTICE & PROCEDURE – Security for costs – principles to be applied – considerations where the applicant is a natural person – applicant ordered to give security. |
| Legislation: Fair Work Act 2009 (Cth), ss.361, 368, 370 Federal Circuit Court of Australia Act 1999 (Cth), s.80 |
| Ariss v Express Interiors Pty Ltd (in liq) [1996] 2 VR 507 Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 Bryan E Fencott Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 Elshanawany v Greater Murray Area Health Service [2004] FCA 1272 Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972 Jazabas Pty Ltd v Haddad (2007) 65 ACSR 776 Kiefel v State of Victoria [2014] FCA 604 Madgwick v Kelly (2013) 212 FCR 1 Ryan v Primesafe [2015] FCA 8 Sheather v Staples Waste Removals Pty Ltd [2012] FCA 998 Waters v Commonwealth of Australia (Australian Taxation Office) [2014] FCA 1107 Waters v Commonwealth of Australia (Australian Taxation Office) [2015] FCAFC 46 Woodhouse v McPhee (1997) 80 FCR 529 |
| Applicant: | ANTHONY NALBANDIAN |
| Respondent: | COMMONWEALTH OF AUSTRALIA (AUSTRALIAN BUREAU OF STATISTICS) |
| File Number: | SYG 1380 of 2015 |
| Judgment of: | Judge Smith |
| Hearing date: | 27 July 2015 |
| Date of Last Submission: | 27 July 2015 |
| Delivered at: | Sydney |
| Delivered on: | 7 August 2015 |
REPRESENTATION
| The Applicant appeared in person |
| Solicitor for the Respondent: | Ms V. Masters, Australian Government Solicitor |
ORDERS
Pursuant to s.80(2) of the Federal Circuit Court of Australia Act 1999, the applicant be ordered to give security for the payment of costs that may be awarded against him in this proceeding (“the order”).
Pursuant to s.80(3) of the Federal Circuit Court of Australia Act 1999, within 30 days of the order, and before taking any further step in prosecuting the application, the applicant give security to the respondent in the amount of $15,000 for the respondent’s indemnity costs of the proceeding.
Pursuant to s.80(5) of the Federal Circuit Court of Australia Act 1999, in the event that the applicant fails to give security within 30 days of the order, the Applicant’s application filed 20 May 2015 be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1380 of 2015
| ANTHONY NALBANDIAN |
Applicant
And
| COMMONWEALTH OF AUSTRALIA (AUSTRALIAN BUREAU OF STATISTICS) |
Respondent
REASONS FOR JUDGMENT
Mr Nalbandian is a former employee of the Australian Bureau of Statistics (“ABS”). His employment was terminated following the completion of a protracted performance review. He has now brought proceedings in this Court alleging that the ABS had terminated his employment because he exercised a workplace right, and that it has breached, amongst other statutes, the Racial Discrimination Act 1975.
The ABS seeks an order that Mr Nalbandian provide security for costs and, if such security is not given within 14 days, that Mr Nalbandian’s application be dismissed.
It is necessary to set out a brief background to these proceedings in order to understand the arguments that were raised by the parties in connection with the application.
Background
Mr Nalbandian started working at the ABS on 10 April 2010. On 31 January 2014 he was given a written warning about unsatisfactory work performance and informed that the ABS would implement a performance assessment process for him. On 24 March 2014 Mr Nalbandian filed an application in the Fair Work Commission for an order to stop bullying. As a result of that application the ABS deferred any further action in respect of the performance assessment pending resolution of the application.
The Fair Work Commission heard the application over a number of days in 2014 and, in a decision handed down on 31 October 2014, dismissed the application. The performance assessment process resumed on that day. Mr Nalbandian appealed against the decision. That appeal was heard on 20 January 2015 by the Full Bench of the Fair Work Commission and the decision was reserved.
On 7 November 2014, without informing the ABS, Mr Nalbandian complained to Comcare that the ABS had breached its primary duty of care under s.19 of the Work Health and SafetyAct 2011.
On 2 February 2015 Mr Nalbandian was told that an interim report had been prepared, that he had not attained the required standard of work performance and, for that reason, the assessment process had ceased. On 24 February 2015 the ABS notified Mr Nalbandian that he was being considered for termination under sub-s.29(3)(c) of the Public Service Act 1999 on the ground of unsatisfactory work performance.
On or about 27 February 2015 Comcare advised Mr Nalbandian that it did not consider that the ABS had breached its duty of care under the Work Health and Safety Act 2011. Mr Nalbandian sought review of that decision but, once again, did not inform the ABS.
On 4 March 2015 Mr Nalbandian again applied to the Fair Work Commission alleging that the ABS had contravened the General Protections Provisions of the Fair Work Act 2009 (“FW Act”) in respect of its management of his work performance.
On or about 5 March 2015 Mr Nalbandian complained to the Australian Human Rights Commission (“AHRC”) alleging that the ABS had contravened the Disability Discrimination Act 1992, the Age Discrimination Act 2004 and the Australian Human Rights Commission Act 1986 in relation to his work performance assessment. Mr Nalbandian subsequently abandoned the March 2015 Fair Work Commission proceedings after being told that he could not maintain those at the same time as the AHRC complaint.
On 25 March 2015, Mr Cocks of the AHRC conducted a conciliation conference between the parties. Mr Nalbandian was represented by Marrickville Legal Centre (MLC) for the purposes of that conference. Just before the end of that conference the ABS made a written settlement offer to Mr Nalbandian in the form of a Deed of Agreement which was said to be open for acceptance until 5pm that day by execution and delivery of the Deed. That offer was not accepted prior to the expiry of the deadline.
The offer was repeated on the following day, this time with the expiry of midday on 27 March 2015. Once again, the applicant did not accept the offer prior to the expiry of the deadline. Shortly after midday on 27 March 2015 the solicitors acting for ABS emailed to the applicant and the MLC a letter notifying Mr Nalbandian of the termination of his employment under sub-s.29(3)(c) of the Public Service Act 1999.
Shortly after 2pm on the same day Mr Cocks emailed, to the solicitors for the ABS, a copy of the Deed executed by the applicant but with no witness signature. At 2:44pm Mr Cocks emailed the ABS’s solicitors a copy of the Deed executed by the applicant and apparently witnessed by Bill Wong. At 4:10pm ABS’s solicitors emailed a copy of the Deed executed on behalf of the ABS to both MLC and AHRC.
The effect of the Deed was, in brief, that in return for Mr Nalbandian withdrawing all of his complaints concerning or relating to his employment with the ABS, the ABS would terminate his employment as being in excess of requirements and pay him a voluntary redundancy. It was a term of the Deed that the Deed would operate as an absolute bar and defence to any further action, suit, claim or demand commenced or made by the employee or the employer in respect of the relevant matters.
On 31 March 2015 Mr Nalbandian withdrew his claim to the AHRC and later on the same day the ABS sent him a notice of termination. At some point thereafter the ABS paid Mr Nalbandian his accrued leave and salary entitlements together with the voluntary redundancy payable under the Deed.
However, on 8 April 2015 Mr Nalbandian made a statutory declaration contesting the validity of the Deed. He said, amongst other things:
3.I was given extremely limited time to decide on the day. However, having received the termination of employment letter on 27 March 2015, caused an overwhelming feeling of panic and extreme fear of our sudden dire financial situation. When I was given the opportunity for a short term relief by signing the redundancy deed urgently, I wasted no time signing it for the sake of survival of my family, at least for the time being.
4.The deed to be completed required someone who can witness my signature. I walked outside my unit but could not find anyone who could help me. Due to the urgency of this deed to be signed and completed in time, and having tried my very best to find someone who could do this, in desperation I also signed the name Mr Bill Wong who does not exist.
5.My primary concern was our immediate survival being the sole breadwinner in my family. The fact was my employer put me in this catastrophic situation in the first place, and this depressive predicament coupled with extreme stress and overwhelming panic at the time, forced me to commit this act of desperation. Nevertheless, this makes the deed null and void.
In spite of the allegations in that statutory declaration Mr Nalbandian did not, and still has not, repaid the amount paid to him in respect of the voluntary redundancy. Instead, on 13 April 2015 he made another application to the Fair Work Commission under the General Protections provisions of the FW Act.
On 22 April 2015 the Full Bench of the Commission dismissed Mr Nalbandian’s appeal from the first Fair Work Commission judgment.
On or about 12 May 2015 the Fair Work Commission issued a certificate under s.368 of the FW Act in respect of the application filed on 13 April 2015 and on 20 May 2015 Mr Nalbandian commenced these proceedings.
Consideration
The Court has discretion under s.80 of the Federal Circuit Court of Australia Act 1999 to order an applicant to give security for the payment of costs that may be awarded against him or her. That discretion is essentially the same as that of the Federal Court under s.56 of the Federal Court of Australia Act 1976. It is broad and unfettered and must be exercised according to the merits of each case without any particular predisposition: Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3; Bryan E Fencott Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 511; Woodhouse v McPhee (1997) 80 FCR 529 at 533; Madgwick v Kelly (2013) 212 FCR 1 at 4 [6]; Waters v Commonwealth of Australia (Australian Taxation Office) [2014] FCA 1107 (“Waters”) at [36] affirmed on appeal [2015] FCAFC 46.
The following six matters are relevant for consideration in deciding whether security for costs are to be awarded, although relevant matters are not restricted to these (Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972):
a)the prospects of success;
b)the quantum of risk that a costs order will not be satisfied;
c)whether the making of an order would be oppressive in that it would stifle a reasonably arguable claim;
d)whether any impecuniosity arises out of the conduct complained of;
e)whether there are aspects of public interest which way in the balance against such an order; and
f)whether there are particular discretionary matters which are peculiar to the circumstances of the case.
Further considerations are relevant where a litigant is, as here, a natural person. The general approach in that respect appears to be that a natural person who has commenced litigation will not be required to provide security for costs merely because he or she is impecunious: Elshanawany v Greater Murray Area Health Service [2004] FCA 1272 at [11]; Kiefel v State of Victoria [2014] FCA 604 at [51]. In Kiefel, Mortimer J noted, at [34], that an individual impecunious litigant would rarely be order to provide security. In Sheather v Staples Waste Removals Pty Ltd [2012] FCA 998 Nicholas J noted at [18] that, as a general rule, there is a very strong disinclination to make an order requiring individuals to provide security for costs. However, as noted by Griffiths J in Waters at [43], each case necessarily turns on its own particular facts and circumstances and the fact that a litigant is a natural person does nothing to circumscribe the breadth of the Court’s discretion.
It is very difficult to make any assessment of the prospects of success of an application where all that has been filed is the application itself (or, as here, an amended Form 2 claim form) and a reply to that application. In these circumstances it is difficult to go beyond considering whether there was a bona fides and arguable claim: Waters v Commonwealth of Australia (Australian Taxation Office) [2015] FCAFC 46 at [59] per Katzmann J, North J agreeing, referring to Equity Access at 50,636, Jazabas Pty Ltd v Haddad (2007) 65 ACSR 776 at [18] per Basten JA and Ariss v Express Interiors Pty Ltd (in liq) [1996] 2 VR 507 at 514.
The complaints made in the amended claim form are, without intending any criticism, numerous and discursive. There are two essential strands in the application: first, that the ABS took adverse action against him because of Mr Nalbandian’s race and disability in breach of s.351 of the FW Act; and secondly, that it took an adverse action against him because he had exercised a workplace right, namely to bring proceedings in the Fair Work Commission and the AHRC and to bring complaints to Comcare. On the material before me I cannot properly assess the merits of those claims. However in light of the reverse onus that applies pursuant to s.361 of the FW Act in respect of proceedings brought under pt.3.1 of that Act, there must be at least a prima facie case.
The ABS relies on two matters to argue that there are no prospects at all in these proceedings: first, the provision in the Deed which effectively bars the bringing of these proceedings; and secondly, in the alternative, that contrary to the applicants case, his employment was not in fact terminated on 27 March 2015 as alleged, but on 31 March 2015 in accordance with the Deed.
In response, Mr Nalbandian argues that the Deed is in effective because, to put it bluntly, he did not know what he was doing when he signed it. It may be that, on the evidence that might be eventually led at trial, Mr Nalbandian will establish that he was in no position to understand the Deed. That does not necessarily mean that the Deed had no effect or even that the parties would not be held to be bound by its terms. Indeed, it might be difficult for Mr Nalbandian to escape the fact that at least for a short period, both he and the ABS acted on the basis that the Deed was effective. For example, Mr Nalbandian withdrew his claims and he accepted the payment of money to him by the ABS under the terms of the Deed. When I asked him about this at the hearing of the application, Mr Nalbandian was very coy. While not expressly admitting to have received a sum in excess of $22,000 from the ABS, he never denied it and his argument that that sum was considerably less than the loss he suffered amounted, in my opinion, to an implicit admission.
Another difficulty for Mr Nalbandian is that, on his own version of events, he falsely indicated to the ABS that his signature to the Deed was witnessed. If that be the case, there would be a strong basis to refuse any relief that might otherwise be available.
That said, I cannot say, as the ABS urged, that there are no prospects of this application succeeding even though, as presently advised, there must be only limited prospects for Mr Nalbandian in these proceedings.
The second relevant consideration is the quantum of risk that a costs order will be satisfied. This matter entails two separate considerations. The first is that s.370 of the FW Act operates to limit this Court’s powers to award costs in proceedings under that Act. Relevantly, a party may be ordered to pay costs of proceedings only if the Court is satisfied that the party instituted the proceedings vexatiously without reasonable cause or is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs.
The policy behind this provision is to ensure that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings. It is an access to justice provision: Ryan v Primesafe [2015] FCA 8 at [64].
The matter will have been instituted without reasonable cause if it has no real prospects of success, or was doomed to failure in that it is clear that it must fail the applicant’s own version of the facts: Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 at [8] approved in Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166 at [9].
The question of whether costs will be awarded in light of that provision is more difficult to answer at this stage of the proceedings than it is to determine the probability of the application succeeding. The mere fact that a party loses is an insufficient basis to award costs. In light of that, I can only conclude that there is some prospect that there may be a costs order against Mr Nalbandian but that, unlike in other types of litigation, there is no certainty in that respect.
The second consideration here is Mr Nalbandian’s financial circumstances. Very little direct evidence of those circumstances has been put before the Court. It was once common, in my experience, for a respondent or defendant to proceedings who suspected that the applicant or plaintiff was impecunious to write to the claimant making that assertion and asking for evidence that it was not so. A failure to reply to such a request could be then taken as sufficient basis to find that the claimant was impecunious or at least as a justifiable basis for applying for an order for security for costs. No such step was taken by the ABS in these proceedings.
The only evidence before me is to the effect that Mr Nalbandian has fallen behind in his rent and his landlord has given notice of termination and threatened proceedings in the New South Wales Civil and Administrative Tribunal to terminate that lease. There is other evidence that in early April 2015 Mr Nalbandian had received from the ABS a sum in excess of $22,000. He has not explained what he has done with that sum.
However, Mr Nalbandian himself does not dispute that he has no money. While he did not give evidence about that, his written submissions make repeated reference to it and he said from the bar table that he would be able to pay costs if he were to get a job. In light of those concessions, it appears to me there are some prospects that if Mr Nalbandian loses these proceedings and there were to be a costs order against him that he would be unable to meet that costs order.
The ABS has estimated the amount of its costs by reference to the schedule of costs in the Federal Circuit Court Rules 2001. Ordinarily, a party seeking an order for security for costs would have evidence of an experienced litigator as to the steps required in the proceedings and the cost that would be incurred in respect of each step together with an opinion of the reasonableness of those costs and the basis for that opinion. However, the costs estimated by the ABS are only in the sum of $15,000. That estimate is based solely on the amount of costs set out in the Schedule to the Rules. In light of the volume of material that has been produced in these proceedings already and the likelihood of considerably more material being presented, I cannot see that that is an unreasonable estimate.
The next question is whether the making of any order would have the effect of stifling the proceedings. In this respect it is well-established that, although the party moving for an order for security for costs carries the normal onus, the onus of establishing that the making of an order would stultify the proceedings rests on the party who resists security: Bell Wholesale at [4]; and Madgwick at [81].
Here, although Mr Nalbandian asserted that he was impecunious, the evidence did not go so far as to show that an order for security would bring the proceedings to an end. Taking into account the fact that Mr Nalbandian has not explained what he has done with his redundancy payment, I am not satisfied that an order for security would stultify the proceedings.
The next question is whether Mr Nalbandian’s impecuniosity has been brought about by the conduct complained of. At first glance, it is easy to infer that that is the case: the ABS terminated Mr Nalbandian’s employment and he remains unemployed. However, it will be recalled that upon termination of his employment, Mr Nalbandian received a lump sum payment in excess of $22,000. That was only four months ago. If that money has in fact been dissipated then Mr Nalbandian’s impecuniosity will not have been caused by the termination of his employment but rather by the fact that he has spent all his money. In light of that, I do not give much weight to this factor.
The next factor is whether there are any public interest considerations to take into account. I cannot see any. These proceedings are between a private individual and his former employer. There is nothing to suggest that, even if Mr Nalbandian’s assertions are correct, the ABS has conducted itself in any similar way towards any other person or might in the future do so such as to give rise to a relevant public interest.
The final relevant matter is whether there are any other relevant discretionary considerations to take into account. In my view there is one very important discretionary consideration, namely, that in spite of claiming that the Deed is ineffective, Mr Nalbandian has obtained and kept for himself the benefit of entry into that Deed. On one view, he obtained that benefit by deception, namely by falsely signing the name of a witness to his own signature. I view this as a strong factor in the exercise of the discretion as to whether or not to make an order for security for costs.
Having considered all of the above matters, separately and together, I give the greatest weight to the issues surrounding the entry into the Deed and the payment of redundancy money to Mr Nalbandian and his subsequent failure to repay it. On the one hand, he might have some prospects of succeeding in his application if the Deed were to be found to be ineffective and to some extent his impecuniosity might have been brought about by the termination of his employment. However, those matters are outweighed by Mr Nalbandian’s own conduct and the prospect that, in any event, if the Deed is effective it will be a complete bar to these proceedings and will justify a costs order being made against him. On the current evidence Mr Nalbandian would be unable to meet that costs order and that would amount to an injustice to the respondent.
For those reasons, I am satisfied that an order for security for costs should be made and that $15,000 security is sufficient to meet any prejudice to the respondent and is neither oppressive nor likely to stultify the proceedings.
Conclusion
The proceeding should be stayed until security is given and, if it is not given within thirty days, the proceeding should be dismissed.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 7 August 2015
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