Nilsen v Loyal Orange Trust
[2011] FWA 5656
•23 AUGUST 2011
[2011] FWA 5656 |
|
DECISION |
Fair Work Act 2009
s.611 - Application for costs
Maria Legaz
v
Northern Beaches Community Services Pty Ltd
(U2010/13938)
COMMISSIONER GOOLEY | MELBOURNE, 23 AUGUST 2011 |
Application for costs.
[1] This is an application made pursuant to section 611 of the Fair Work Act 2009 (FW Act) by Northern Beaches Community Services Pty Ltd (the employer) for costs against Ms Maria Legaz.
[2] On 8 November 2010 Ms Legaz made an application for an unfair dismissal remedy pursuant to section 394 of the FW Act.
[3] On 26 November 2010 the employer filed the employer’s response to the application and advised in answer to question 1 that Ms Legaz had not been dismissed. The employer did not indicate any other jurisdictional objections to the application. The employer advised that it employed two employees.
[4] On 16 November 2010 the employer filed an objection to the application on the following grounds:
1. The Respondent submits Fair Work Australia does not have jurisdiction to consider the application (as the Respondent is a company limited by guarantee but is a community based organisation principally funded by government agencies and not a trading corporation) the Respondent being a legal entity to which the Fair Work Act 2009 does not apply.
2. Further and in the alternative, the Application was filed out of time.
3. Further and in the alternative the employment of the Applicant was not terminated.
4. Costs be paid by the Applicant to the Respondent on the basis that:
(a) the Application was made without reasonable cause; and/or
(b) the Application had no reasonable prospects of success.
[5] A conciliation was conducted on 1 December 2010 but the matter was not settled.
[6] Directions were issued on 3 March 2010 requiring Ms Legaz to file submissions in support of her application for an extension of time and for the employer to file its submissions in support of its jurisdictional objection. Material was to be filed by 17 March 2011.
[7] On 17 March 2011 the employer filed its outline of submissions on its jurisdictional objection. Ms Legaz did not file any material to support her application for an extension of time.
[8] On 31 March 2011 Ms Legaz filed a notice of discontinuance.
[9] On 15 April 2011 the employer filed an application for costs.
[10] At the hearing Mr Gerard Boyce of Counsel appeared with permission for Ms Legaz and Mr James Dupree of Counsel appeared for the employer.
[11] Ms Legaz filed a statutory declaration 1 but she was not cross examined. Mr Dupree objected to parts of Ms Legaz’s evidence. I ruled that paragraphs [4] and [13] were not admissible. I ruled that the remaining paragraphs were admissible.
[12] In determining to admit the evidence I had regard to the fact that Fair Work Australia is not bound by the rules of evidence.
[13] Mr Dupree objected to Ms Legaz’s evidence about her complaint against Mr John Gillham, the Chief Executive Officer of the employer. 2 He submitted that this material was irrelevant. Attached to the submissions of the employer were letters exchanged about these matters. It is difficult to see how the documents the employer read in this matter were relevant and Ms Legaz’s description of events is irrelevant. It has, however, been unnecessary in this decision for any findings to be made in relation to this evidence. Mr Dupree objected to Ms Legaz’s evidence about her ability to return to work.3 Again no findings were made in relation to this evidence.
[14] Mr Dupree also objected to paragraphs [15] - [19] of Ms Legaz’s statutory declaration on the basis of relevance. He submitted that they were “self-serving propositions that do not have any relevance to any fact in issue and have prejudicial value. If any value is to be taken from them, it has no connection to anything probative.” 4
[15] I admitted these paragraphs into evidence. The evidence at paragraphs [15]-[19] is not relevant to an objective assessment of whether the application had reasonable prospects of success. These paragraphs are a statement of Ms Legaz’s uncontested reasons for discontinuing her application and would be relevant to the exercise of my discretion in this matter.
Background
[16] Ms Legaz was employed as a Spanish Facilitator by the employer. She alleges she was dismissed by email on 26 October 2010. 5
[17] There was no evidence before me about the terms and conditions of Ms Legaz’s employment. While Mr Dupree made statements from the bar table in his final submissions about the nature of Ms Legaz’s employment however there was no evidentiary basis for those submissions.
[18] On 10 August 2011 Ms Legaz had written to the Board of the employer outlining her concerns about Mr Gillham. 6 On 20 August 2010 Mr Gillham’s solicitors wrote to Ms Legaz seeking a retraction, an apology and the payment of legal fees. In addition Mr Gillham reserved his rights to claim damages and interest.7
[19] On 16 September 2010 the Board advised Ms Legaz that her allegations were not substantiated. 8
[20] On 26 October 2010, the Acting Co-ordinator, Ms Robyn Brooks sent Ms Legaz an email in which she said “further to our telephone conversation yesterday I would like to inform you that due to changes that have evolved in the Multicultural Carer’s Program we do not have any work for you at present. However should a need arise for an additional facilitator sometime in the future I will be in touch. Thank you for your support in the past.” 9
[21] By return email Ms Legaz advised Ms Brooks that she required a signed letter on company letterhead signed by her employer. 10 No such letter was forthcoming.
[22] On 28 October 2010 Ms Barbara Ingersole, the Administration Manager, sent Ms Legaz a letter asking her to return her office keys. 11
[23] On 25 November 2010 Ms Ingersole sent Ms Legaz an email in which she advised Ms Legaz of the summer shutdown and advised her that “we anticipate your reattendance for work will be required on Tuesday 1 February 2011. Would you please report to the me at our Cromer office at 9am to recommence your duties. Your duties will be at the same level as those provided previously and your grading, skill requirements and pay rate will be at the same level.” 12
[24] On 1 February 2011 Ms Ingersole sent Ms Legaz a further email noting that Ms Legaz had not attended work on 1 February 2011 and sought her “confirmation that you do not wish to continue your employment at Northern Beaches Community Services Ltd. In the event that you may be unable to attend for personal reasons we will hold the position open until close of business, tomorrow, 4pm Wednesday 2nd February 2011. However due to operational demands we will not be able to maintain our offer past that deadline.” 13
The Legislative Framework
[25] Section 611 of the FW Act provides Fair Work Australia with the power to award costs in certain circumstances:
“611 Costs
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.”
Out of time application
[26] The employer submitted that the unfair dismissal application was out of time. Mr Dupree submitted that if Ms Legaz was terminated on 25 October then the application was not made within 14 days.
[27] The employer submitted that Ms Legaz was not entitled to have awarded in her favour any extension of time and therefore costs should be awarded against Ms Legaz.
[28] This submission assumed Ms Legaz’s application required an extension of time.
[29] If, as Mr Dupree submitted, the evidence had established that Ms Legaz was dismissed on 25 October 2010, then contrary to his submissions the application was lodged within 14 days of the dismissal. If as Ms Legaz submitted, the evidence established that she was terminated on 26 October 2010, she lodged her application within time.
[30] The Acts Interpretation Act 1901 (Cth) at section 36 provides as follows:
“Reckoning of time
(1) Where in an Act any period of time, dating from a given day, act, or event, is prescribed or allowed for any purpose, the time shall, unless the contrary intention appears, be reckoned exclusive of such day or of the day of such act or event.
(2) Where the last day of any period prescribed or allowed by an Act for the doing of anything falls on a Saturday, on a Sunday or on a day which is a public holiday or a bank holiday in the place in which the thing is to be or may be done, the thing may be done on the first day following which is not a Saturday, a Sunday or a public holiday or bank holiday in that place.”
[31] There is no contrary intention in the FW Act and therefore section 36 of the Acts Interpretation Act 1901 (Cth) applies.
[32] In Robert Moon v JLG Industries (Australia) Federal Magistrate Lucev discussed in detail the construction of the expression “within 14 days” when considering whether an application made on 26 November 2010 was within 14 days of the issue of the section 369 certificate on 12 November 2010. His Honour determined that such an application was made within 14 days.
[33] Applying this reasoning to this application, there is therefore no basis to conclude that Ms Legaz’s application for an extension of time was bound to fail as no such application was necessary. Even if Mr Dupree’s submissions are correct and Fair Work Australia cannot make any factual findings about when Ms Legaz was dismissed, it cannot be said that a submission, that the application was made within time, is unarguable.
Not a National System Employee
[34] The employer did not admit that it was a trading or a financial corporation formed with the limits of the Commonwealth. Further it did not admit that the Applicant is a national system employee or it is a national system employer.
[35] This contention was one of the grounds relied upon by the Respondent in its jurisdictional objection to Ms Legaz’s application.
[36] I raised with Mr Dupree the referral of powers from New South Wales to the Commonwealth in relation to the dismissal of employees of non-constitutional corporations. The referral took effect on 1 January 2010. 14
[37] Mr Dupree submitted that what I must have regard to, is the state of Ms Legaz’s mind and he submitted that it was accepted by Ms Legaz that Fair Work Australia did not have jurisdiction to hear the application and in support of that submission he relied upon the submission made by Ms Legaz in opposition to the costs application.
[38] I do not accept Mr Dupree’s submissions. It is true that in its submissions in opposition to the costs application, Ms Legaz’s legal representative conceded that the employer was not a constitutional corporation 15 and therefore submitted that there was no power for Fair Work Australia to make a costs application. It appears that like Mr Dupree, Mr Boyce had no regard to the referral of powers from NSW to the Commonwealth. However in this matter I am being asked to award costs against Ms Legaz in part because it is argued she had no reasonable prospects of success because she knew there was no jurisdiction for Fair Work Australia to determine her application.
[39] Even if Ms Legaz was advised by her legal representative, at the time of the costs application that there was no jurisdiction, Ms Legaz was self represented until 27 July 2011.
[40] No submissions made by her representative on the costs application can have any bearing on whether Ms Legaz instituted these proceedings vexatiously or without reasonable cause or whether it should have been reasonably apparent to her that she had no reasonable prospects of success.
[41] There is no basis for concluding that at the time of making her application or during the time her application was on foot, Ms Legaz knew that there was no jurisdiction in Fair Work Australia to hear her application.
[42] Mr Dupree submitted that a finding that Fair Work Australia had jurisdiction to determine the application because of the referral from New South Wales to the Commonwealth could not be made in this proceeding because Fair Work Australia does not have the “underpinning matrix of facts to support the presumption of law.” 16 While I do not accept this submission, even if this were the case, it cannot be said that on any objective assessment, a submission that Fair Work Australia had jurisdiction to hear her case was bound to fail.
Legaz’s employment was not terminated
[43] The employer submits that Ms Legaz’s employment was not terminated. The evidence in support of this was the evidence of the Ms Ingersole’s email of 25 November 2010. 17
[44] This email was of course sent after Ms Legaz had filed her unfair dismissal application. Of course, if Ms Legaz had been dismissed on 26 or 25 October 2010, no email sent by her employer can alter the fact of dismissal. Once an employer has dismissed an employee the employer cannot unilaterally withdraw the dismissal.
[45] There is of course insufficient material before Fair Work Australia to determine if Ms Legaz was in fact dismissed on 26 or 25 October 2010.
[46] However in a costs application it is not necessary for Fair Work Australia to resolve the factual dispute between the parties.
[47] What Fair Work Australia must determine is whether when Ms Legaz made the application, she did so vexatiously or without reasonable cause or whether subsequently it was reasonably apparent that there was no reasonable prospect of success.
Section 611(1)(a) - without reasonable cause
[48] The concept of without reasonable cause was considered by Chief Justice Wilcox in Kanan v Australian Postal & Telecommunications Union 18. Wilcox CJ said:
“It seems to me that the way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospects of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatize the proceeding as being ‘without reasonable cause.’ But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
[49] Given that this application was discontinued prior to the hearing of the substantive application or even the jurisdictional objection it is not possible on the material before Fair Work Australia to determine that on the facts alleged by Ms Legaz that she instituted the proceedings without reasonable cause.
Section 611(1)(a ) - vexatiously
[50] It was submitted that Ms Legaz instituted the proceedings vexatiously. Mr Dupree submitted that “it is reasonable to infer that in truth that the Fair Work Australia matter was a defensive mechanism in an attempt to put Mr Gillham to the sword, because she knew he was CEO of an organisation that was well know to her, in an endeavour to say “Well you pull your horns in and I’ll pull my horns in” if I can use a colloquial cliché.” 19
[51] The term vexatious goes to the motive or intention of the party making the application. 20 North J in Nilsen v Loyal Orange Trust21 said:
“A proceeding is instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party or to gain a collateral advantage. “
[52] Mr Dupree submitted that Ms Legaz herself linked her termination of her employment with the dispute with Mr Gillham in a letter sent by her solicitors to Mr Gillham’s solicitors on 17 November 2010. 22
[53] Ms Legaz was in attendance at the hearing and she gave evidence. The allegation of the employer about Ms Legaz’s motivation for bringing the action was not put to Ms Legaz in cross examination.
[54] I reject the submissions that there was no cogent reason for Ms Legaz lodging an unfair dismissal application. 23 Ms Legaz formed the view that her employment had been terminated. That contention was not so untenable that it was bound to fail.
[55] I do not consider that the sequence of events relied upon by the employer, nor the letter sent by Ms Legaz’s solicitors, support a conclusion that Ms Legaz brought her application vexatiously.
[56] It was clearly Ms Legaz’s view that she was terminated for lodging a grievance against Mr Gillham. It was that grievance which led to the allegations of defamation. Clearly there was a connection between the matters but that does not support a conclusion, without more, that Ms Legaz instituted the unfair dismissal application to gain leverage in the defamation matter.
[57] There is insufficient evidence to support a finding that the application was brought for an improper or collateral purpose. I therefore find that the application was not made vexatiously.
Section 611(2)(b) - reasonably apparent that there was no reasonable prospect of success
[58] After Ms Legaz filed her application and before she filed her notice of discontinuance should it have been reasonably apparent to her that her application had no reasonable prospects of success?
[59] In A Baker v Salva Resources Pty Ltd 24 the Full Bench provided a useful summary of the approach to be taken to section 611(2)(b) of the FW Act and I adopt that approach:
“[10] The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:
• “should have been reasonably apparent” must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and
• a conclusion that an application “had no reasonable prospect of success” should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable.”
[60] The test is objective.
[61] The employer submitted Ms Legaz filed her notice of discontinuance after she received the jurisdictional objection filed by the employer in December 2010 and the outline of submissions filed in support of that objection filed on 17 March 2010. Ms Legaz did not comply with the directions and file her submissions in support of an extension of time. The employer submitted that Ms Legaz was on notice of the change in the employer’s position in relation to the question of whether the application was within the jurisdiction of Fair Work Australia 25 as the employer no longer denied it was a national system employer it now “did not admit” it was a national system employer. I however fail to see how an unrepresented litigate is expected to understand the legal difference between a bare denial and a non admission.
[62] The employer submitted that Ms Legaz when faced with this lesser hurdle, filed a notice of discontinuance.
[63] I do not consider that any objective assessment of the matters raised in the submissions of the employer filed on 17 March 2010 would have caused Ms Legaz to conclude that her application had no reasonable prospects of success. As outlined above, Ms Legaz would have been able to establish that Fair Work Australia had jurisdiction to hear her application and that her application was lodged within 14 days. Further that she had been dismissed was arguable.
[64] Even if the submission of the employer are correct and there is no factual basis for these finding it cannot be argued that on any objective assessment of the facts alleged by Ms Legaz that her application was manifestly untenable or groundless or so lacking in merit or substance as to not be reasonably arguable. Further her contention that she had been dismissed was not manifestly untenable or groundless or so lacking in merit or substance as to not be reasonably arguable.
[65] Ms Legaz explained her reasons for discontinuing the proceedings. Her explanation went to illness in her family and her stress as a result of those illnesses and the unfair dismissal proceedings and the threatened defamation action. 26
[66] She was able to be cross examined on these reasons. It was not put to her in cross examination that the real reason she discontinued the proceedings was because having seen the material of the employer it was apparent to her that she had no reasonable prospects of success.
[67] On the material before me it is not possible to conclude that Ms Legaz continued her application in circumstances where it should have been reasonably apparent that she had no reasonable prospects of success.
Conclusion
[68] I have concluded that costs should not be awarded against Ms Legaz because of the finding set out above and therefore the application for costs is dismissed.
COMMISSIONER
Appearances:
G Boyce of Counsel for the Applicant.
J Dupree of Counsel for Northern Beaches Community Services Pty Ltd.
Hearing details:
2010.
Melbourne:
5 August.
1 Exhibit R2
2 Ibid at [5]-[11]
3 Ibid at [12] and [14]
4 Transcript PN 187
5 Exhibit R2 at [1]
6 Ibid at [5]
7 Exhibit A7
8 Ibid
9 Ibid
10 Ibid
11 Exhibit R2 at A
12 Exhibit A6
13 Exhibit A7
14 See Industrial Relations (Commonwealth Powers) Act 2009 (SW), the Industrial Relations (National System Employers) Order 2009 and the Fair Work (State Referral and Consequential Other Amendments) Act 2009
15 Exhibit R1 at (a)
16 Transcript PN 332
17 Ibid PN 366
18 (1992) 43 IR 157 at 264-265
19 Transcript PN 362
20 Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd [2002] FCA 1406, 15 November 2002
21 Unreported Industrial Relations Court of Australia 1 September 1997 Decision No 267/97
22 Transcript PN 361
23 Ibid PN 415
24 [2011] FWAFB 4014
25 Transcript PN 352
26 Exhibit R2 at [15]-[19]
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