Ngaanyatjarra Health Service (Aboriginal Corporation) T/A Ngaanyatjarra Health Service v Andrew Roberts

[2016] FWC 4875

[2016] FWC 4875

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
ss.400A, 401 611 - Application for costs

Ngaanyatjarra Health Service (Aboriginal Corporation) T/A Ngaanyatjarra Health Service
v
Andrew Roberts and Others
(U2015/17112; U2016/7400)

COMMISSIONER WILSON MELBOURNE, 27 JULY 2016

Application for costs orders against a party and legal representative involved in an application for an Unfair Dismissal Remedy.

INTRODUCTION

[1] On 22 December 2015, Andrew Roberts commenced an unfair dismissal application against his former employer, Ngaanyatjarra Health Service (Aboriginal Corporation) T/A Ngaanyatjarra Health Service. Mr Roberts’ application was subsequently discontinued by him on 18 May 2016 after conciliation was unsuccessful and before a scheduled arbitration of his matter was due to take place. Subsequent to Mr Roberts’ discontinuance of his application, the Respondent, Ngaanyatjarra Health Service, made an application to the Fair Work Commission for an order for costs pursuant to sections 400A, 401 and 611 of the Fair Work Act 2009 (the Act) both against Mr Roberts and his solicitors, Cosgriff Lawyers. This decision concerns the costs application.

[2] Having received the application for costs, the Commission issued directions for the provision of written submissions from both parties and proposed to them that the matter would be determined by me on the papers, unless either party requested a hearing. Neither party requested a hearing. A perusal of the submissions does not indicate that the question now before me involves disputed fact and so I am of the opinion that I am not required, because of s.397 of the Act, to conduct a conference or hearing in relation to the matter. The costs application has, therefore, been determined by me on the papers.

[3] For the reasons set out below, I decline to exercise my discretion to make a costs order against Mr Roberts or Cosgriff Lawyers.

BACKGROUND TO THE COSTS APPLICATION

[4] Prior to dismissal, Mr Roberts had been employed by Ngaanyatjarra Health Service to work as a Pharmacy Manager at the Jameson Community in remote Western Australia, approximately 920 km from Alice Springs. Mr Roberts had been engaged at the community since April 2006. Initially that engagement was as an independent contractor, however it became an employment arrangement from 1 June 2014.

[5] At a meeting on 28 August 2015, and subsequently confirmed in correspondence, Mr Roberts was advised that the “land based component” of the pharmacist position was abolished and he was informed that there was to be a new position for him based in Alice Springs at the Ngaanyatjarra Health Service’s head office which would also involve regular rotation into the community’s lands. The reference to abolition of the “land based component” is apparently a reference to a desire by Ngaanyatjarra Health Service that the position no longer be based in the community’s lands at the Jameson Community.

[6] Mr Roberts took the advice to mean that his position had been abolished and made redundant and there was then a dialogue between the parties regarding his claim for redundancy payment. That dialogue was unsuccessful.

[7] On 25 November 2015 Mr Roberts was given a written direction by the Ngaanyatjarra Health Service to relocate to Alice Springs with effect from 7 December 2015. On 9 December 2015 Ngaanyatjarra Health Service again wrote to Mr Roberts advising that it had neither terminated his contract of employment nor abolished his current position but rather that it required him to undertake his employment in Alice Springs. The correspondence noted that Mr Roberts had not presented to work as directed at the Alice Springs office and that, in the absence of an explanation from him as to why he had not presented as directed, it considered Mr Roberts to have breached his employment contract justifying a termination of his employment for misconduct. The same correspondence gave Mr Roberts an opportunity to provide any explanation he may wish to be taken into account by them, with an indication that he needed to provide any such explanation by 10 December 2015.

[8] Mr Roberts did not respond to that correspondence and on 17 December 2015 Ngaanyatjarra Health Service again wrote to Mr Roberts terminating his employment because of his failure “to attend to your employment as directed in serious breach of your employment”.

[9] Mr Roberts’ application to the Commission says in respect of the correspondence from Ngaanyatjarra Health Service on 9 December 2015 that he had not read the letter dated 9 December 2015, having earlier put his employer on notice on 16 September 2015 that he had engaged a lawyer at which time he had requested that all future communications be sent through that person “as he was suffering work-related stress”.

[10] Mr Roberts says that the correspondence dated 17 December 2015 was brought to his attention when a person from his employer inquired of him on 21 December whether he had read his emails.

[11] Both in its Employer Response Form as well as its submissions for these proceedings, Ngaanyatjarra Health Service raised various objections about the competence of the application saying that Mr Roberts’ application was lodged after the 21 day period allowed for the making of such applications; that his employment did not meet the minimum employment period; as well as arguing that his dismissal was not at the employer’s initiative.

[12] These objections are based on an argument that Mr Roberts’ employment came to an end in August or September 2015, even though such objections appear counterfactual to the other material contained within the file. Elsewhere within Ngaanyatjarra Health Service’s submissions on costs, drafted by its lawyers Ward Keller, it says that the proper construction of the circumstances is that Mr Roberts’ employment was in effect terminated for reason of redundancy either on 28 August 2015 in the course of a meeting with him or through the subsequent correspondence to him dated 3 September 2015, as well as it taking the view that at least from 2 October 2015 Mr Roberts was not complying with a lawful direction.

[13] A question arises of whether the two can even sit logically or legally together. If employment had ended in August or September it would be seem to follow that there was no direction, lawful or otherwise, to comply with in October.

[14] In any event, these are matters of fact that do not require determination in this decision.

[15] The Ngaanyatjarra Health Service’s costs submissions make the further arguments that assumptions apparently made by Mr Roberts about whether he could remain where he was in the Jameson Community and that he was not required to present to Alice Springs were not reasonably held, and that its termination of his employment was valid based as it was on the whole of the circumstances of Mr Roberts’ failures to comply with lawful directions over a period of some months. It also argues that Mr Roberts’ application was made for reasons other than seeking a remedy for an unfair dismissal.

[16] For his part, Mr Roberts argues that his application was made properly and reasonably and that there was a proper basis for doing so, including that he had prospects of success, that he genuinely sought a remedy through the process and that it cannot be said to have been instituted without reasonable cause.

LEGISLATION

[17] Section 400A of the Act provides as follows;

400A Costs orders against parties

(1) 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) 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) This section does not limit the FWC’s power to order costs under section 611.

[18] Relevantly, section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides;

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

[19] Section 401 of the Act provides as follows;

401 Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.

(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under this section only if the other party to the matter has applied for it in accordance with section 402.

(3) This section does not limit the FWC’s power to order costs under section 611.

[20] Section 611 of the Act provides as follows;

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).

CONSIDERATION

[21] Section 400A of the Act allows for costs orders to be made if the Fair Work Commission is satisfied that costs were incurred because of an unreasonable act or omission of a party in connection to the conduct of the case. The Commission’s power to award costs under this provision of the Act is discretionary. There is also a requisite causal link between the act or omission and the costs being incurred.

[22] Section 401 contains similar provisions to s.400A, insofar as it allows for a costs order to be made if the Commission is satisfied that an unreasonable act or omission of a representative causes costs to be incurred, with the additional allowance for costs in the event that a representative encourages proceedings in circumstances where it ought to be reasonably apparent there exist no reasonable prospects of success.

[23] Section 611 allows for an order to be made for the payment of costs if the Commission is satisfied that a party’s application or response to an application was vexatious, without reasonable cause or if the Commission is satisfied that the application or a party’s response to an application had no reasonable prospect of success.

[24] As a general rule each party must bear their own costs in proceedings before the Commission. 1 It has been held in respect of s.611(2)(a) that the legislative intention under the section was for the power to order costs to be exercised where there is clear evidence of unreasonable conduct and that the power to order costs under the section should be exercised with caution and only in clear cases.2 Further, a party cannot be said to have made an application “without reasonable cause” within the meaning of s.611(2)(a) simply because his or her argument proves unsuccessful. The Full Bench has indicated that the test imposed by the expression “without reasonable cause” is similar to that adopted for summary judgment, that is, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless” or “discloses a case which the Court is satisfied cannot succeed”.3 An application will have been made vexatiously “where the predominant purpose ... is to harass or embarrass the other party, or to gain a collateral advantage”.4

[25] The costs incurred and claimed by Ngaanyatjarra Health Service are in respect of its costs incurred after the commencement of Mr Roberts’ application and is advanced both against him and his solicitors on several grounds including;

• That the application was not made within the time prescribed under s.394;



• That it was not in respect of the termination of employment;



• That it was made for the collateral purpose of asserting an entitlement to redundancy pay and therefore not an application for an unfair dismissal remedy; and



• That Mr Roberts did not dispute the misconduct alleged against him.

[26] Having considered all the material filed in this application I am not persuaded either that the application made by Mr Roberts was commenced unreasonably or that it was made vexatiously or without reasonable cause, or that it had no reasonable prospect of success.

[27] Whether the arguments advanced by Ngaanyatjarra Health Service regarding the date of termination and the application being out of time have any merit could only be determined after a hearing on the subject. The face of the materials filed by each party would suggest that Mr Roberts’ contentions on these matters have reasonable prospects of success and that the claims of Ngaanyatjarra Health Service on these points at least have low prospects.

[28] Whether or not there was a termination at the initiative of the employer or whether the termination can properly be characterised as a redundancy or one for misconduct are matters that could reasonably and properly be dealt with in the course of the hearing that had been scheduled prior to the discontinuance of the application by Mr Roberts. There is nothing out of the ordinary, unreasonable, vexatious or lacking in prospects about that situation.

[29] Accordingly, I do not find in favour of Ngaanyatjarra Health Service’s applications for costs either pursuant to s.400A, s.401 or s.611 of the Act. An Order dismissing the costs application will be issued at the same time as these reasons for decision.

COMMISSIONER

 1   Fair Work Act 2009 (Cth) s 611(1); see also Church v Eastern Health[2014] FWCFB 810 [26].

 2   Keep v Performance Automobiles Pty Ltd[2015] FWCFB 1956 [13], [17].

 3   Ibid [17], with reference to Heidt v Chrysler Australia Limited (1976) 26 FLR 257 [272]–[273].

 4   Church v Eastern Health[2014] FWCFB 810 [29], with reference to Nilsen v Loyal Orange Trust [1997] 76 IR 180 at 181.

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