Nina Kolevski v Unique Building Services
[2022] FWC 1873
•25 JULY 2022
| [2022] FWC 1873 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Nina Kolevski
v
Unique Building Services
(U2021/8457)
| COMMISSIONER MIRABELLA | MELBOURNE, 25 JULY 2022 |
Application for costs – unfair dismissal.
On 14 April 2022, I dismissed the unfair dismissal application of Ms Nina Kolevski against Unique Building Services (Unique Building) on the basis that Ms Kolevski was not dismissed (the Decision).[1]
Unique Building has applied for costs against Ms Kolevski under sections 400A and/or 611 of the Fair Work Act 2009 (Cth) (Act).
In summary, in support of its application, Unique Building submits that:
1. It should have been reasonably apparent to Ms Kolevski that her unfair dismissal application had no reasonable prospect of success, because of the following findings of fact in the Decision:
a. Ms Kolevski resigned from her employment;
b. Ms Kolevski regretted her decision and attempted to backtrack on the resignation by denying that it occurred;
c. Ms Kolevski attempted to create self-serving evidence by sending emails on 10 September 2021 and recording the 13 September 2021 meeting;
d. Ms Kolevski, knowing that she resigned, made an application to the Commission alleging unfair dismissal; and/or
2. Ms Kolevski caused Unique Building’s costs to be incurred because of an unreasonable act or omission in connection with the continuation of the matter by continuing her unfair dismissal application following a conciliation conference conducted by the Commission on 22 October 2021, during which Unique Building says it should have been reasonably apparent to Ms Kolevski that Unique Building objected to Ms Kolevski’s application on the basis that she had resigned from her employment, and that she should have withdrawn her application at that point. Further, that because Ms Kolevski did not withdraw her application, this caused Unique Building to engage legal representation for the purposes of the determinative conference.
Unique Building seeks the making of an order for costs on an indemnity basis. Unique Building submits that in circumstances where it expended $42,411.00 in legal costs, an award of costs on a party/party basis is not sufficient to compensate Unique Building. Unique Building submits that if the Commission is not minded to award indemnity costs but does award party/party costs, it seeks costs fixed at $15,935.00.
Relevant legal principles
Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs.
There are a number of provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Sections 400A and 611(2) of the Act are two such exceptions.
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.”
The Full Bench of the Commission said in Gugiatti v SolarisCare Foundation Ltd[2] (Gugiatti) that s.400A of the Act “is concerned with unreasonable acts or omissions in connection with the “conduct or continuation” of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.”[3]
It is apparent that s.400A(1) of the Act requires the Commission to be satisfied of two matters before making any order for costs:
(a) Firstly, that the party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and
(b) Secondly, that such act or omission caused the other party to incur costs.
Satisfaction as to both matters enlivens the Commission’s discretionary power to order the payment of costs under s.400A of the Act.
While s.611(1) of the Act provides for each party to bear their own costs in matters before the Commission, s.611(2) of the Act provides as follows:
“(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.”
Principles relevant to the interpretation of s.611(2)(b) of the Act were summarised by the Full Bench in Baker v Salva Resources Pty Ltd[4] as follows (footnotes omitted):
“[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.”
Consideration
Section 611 of the Act
Unique Building does not rely on or make submissions addressing s.611(2)(a) of the Act and instead relies on s.611(2)(b). As to s.611(2)(b) of the Act, the issue I have to determine is whether I am satisfied that in all the circumstances it should have been reasonably apparent to Ms Kolevski that her claim had no reasonable prospect of success. I am required to exercise caution in determining whether to exercise the power to order costs pursuant to s.611(2)(b) of the Act and consider whether it would have been apparent to a reasonable person that Ms Kolevski’s application “had no reasonable prospect of success”, giving full weight to this expression as a whole.
In this application for costs under s.611(2)(b), Unique Building seeks to rely on my factual findings that Ms Kolevski “regretted her decision” and that she recorded the 13 September 2021 meeting. For the reasons below, I accept Ms Kolevski’s submissions that these are not relevant to the consideration of s.611(2)(b) in this matter.
I have considered whether upon the facts known to Ms Kolevski at the time she filed her application there was no reasonable prospect of success. In her application, Ms Kolevski denied that she resigned, either voluntarily or because she was forced to do so because of her employer’s conduct. Ms Kolevski contended instead that her employment was terminated at the employer’s initiative on 13 September 2021 when she was refused permission to attend her workplace by Unique Building. I am not persuaded that at this point or during proceedings on Ms Kolevski’s own version of the facts, it was clear to her that the application would fail. Nor am I persuaded that her case was so obviously untenable that it could not possibly succeed. This is because in the Form F2 Application Ms Kolevski filed and during proceedings, she made it clear that she relied on the contention that she had been dismissed and that she had not resigned.
The Decision turned on findings of the evidence before me, including of what occurred at the 10 September 2021 meeting and the conduct of the parties. I preferred the evidence of Mr Pickles to Ms Kolevski on key issues, including on the matter of whether Ms Kolevski resigned. That was central to my findings that concluded that Ms Kolevski resigned and was not dismissed.
Ms Kolevski felt wronged by what she saw as unfair and unreasonable treatment at work. I am satisfied that her case was at least arguable. It may have failed to meet the necessary evidential threshold, but there is not a sufficient basis for which to find that it should have been reasonably apparent to Ms Kolevski that her application had no reasonable prospect of success.
Section 400A of the Act
Section 400A of the Act provides that costs may be awarded to Unique Building if I am satisfied that the costs it claims were incurred as a result of an unreasonable act or omission of Ms Kolevski in connection with the conduct or continuation of her unfair dismissal application. However, even if I am satisfied that the relevant circumstances exist, I am not obliged to order costs. It is a discretionary decision.
Adopting the approach to s.400A of the Act in Gugiatti, I am not persuaded that Ms Kolevski engaged in unreasonable acts or omissions in connection with the conduct or continuation of the application. Unique Building contends that at the 22 October 2021 conciliation conference, it objected to Ms Kolevski’s application on the basis that she had resigned and submits that at this point, Ms Kolevski should have withdrawn her application. That Ms Kolevski was aware of Unique Building’s objection is not enough to satisfy the requirements of s.400A of the Act.
I am not satisfied that Ms Kolevski acted unreasonably in continuing with her unfair dismissal application after the 22 October 2021 conciliation conference, or that her not discontinuing the application at that time was an unreasonable act or omission. I consider it not unreasonable at this point for Ms Kolevski to have waited for the material to be filed by Unique Building to support its contention that she resigned and had not been dismissed, and to have such material tested through arbitration. The key factual matter in dispute was whether Ms Kolevski resigned or was dismissed, and this had yet to be resolved. It was not any unreasonable act or omission that caused Unique Building to incur costs.
Conclusion
For the reasons set out above, I am not satisfied that I should make an order for costs against Ms Kolevski pursuant to either s.611 or s.400A of the Act.
Accordingly, Unique Building’s application for costs filed on 28 April 2022 seeking costs against Ms Kolevski is dismissed.
COMMISSIONER
Hearing details
Decided on the papers.
[1] Nina Kolevski v Unique Building Services Pty Ltd[2022] FWC 530.
[2] [2016] FWCFB 2478.
[3] Ibid at [61].
[4] [2011] FWAFB 4014; (2011) IR 174.
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