Oncall Group Australia Pty Ltd v Unfair Dismissal Experts Pty Ltd, Andrew Strachan
[2022] FWC 827
| [2022] FWC 827 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
ss.400A, 401 and 611 - Application for a costs order against a party, representative
Oncall Group Australia Pty Ltd
v
Unfair Dismissal Experts Pty Ltd, Andrew Strachan
(C2022/1288)
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 11 APRIL 2022 |
Applications for costs under ss 400A, 401 and 611 – failure to discontinue application after settlement reached – failure to attend hearing – unreasonable act or omission – costs awarded against applicant’s representative
Oncall Group Australia Pty Ltd (company) has made an application for costs orders against Mr Andrew Strachan and his representative, Unfair Dismissal Experts Pty Ltd (UDE), pursuant to ss 400A, 401 and 611 of the Fair Work Act 2009 (Act).
Mr Strachan was dismissed from his employment with the company and lodged an application for an unfair dismissal remedy under s 394 of the Act. On 9 December 2021, I issued directions and listed the matter for hearing on 10 February 2022. Later on 9 December 2021, the company advised my chambers that it believed the matter had settled. Through my associate, I wrote to the parties noting that if a settlement had been reached, the application should be discontinued. I received no reply.
On 7 January 2022, my associate wrote to the parties requesting an update. On 13 January 2022, UDE advised that the parties were in the final stages of negotiating a settlement and that it expected the matter to be resolved shortly.
On 28 January 2022, my associate again wrote to the parties requesting an update. On 1 February 2022, UDE advised that the signed agreement would be provided to the company that day and that a notice of discontinuance would be filed in due course. The same day, the company advised my chambers that it had received the signed deed of settlement from UDE and that it would attend to the deed as soon as possible.
On 8 February 2022, through my associate, I wrote to the parties and stated that although the matter appeared to have settled, no notice of discontinuance had yet been filed. I reminded the parties that the matter was listed for hearing on 10 February 2022, and that in the absence of a notice of discontinuance, they were required to attend the proceeding. UDE responded that day, confirming that a settlement had been reached, but requesting that the hearing date of 10 February 2022 be vacated, and that Mr Strachan be allowed to file a notice of discontinuance once he had received all four instalments of the settlement sum, in accordance with the settlement agreement. The same day, I declined the request, noting that it was not the Commission’s role to supervise the parties’ performance of their settlement obligations or to stand matters down until performance had been completed. I stated that unless a notice of discontinuance was filed, I would proceed to hear the matter on 10 February 2022 as scheduled. I noted that if an agreement had been reached to resolve the matter, there would likely be a settlement and accord, such that Mr Strachan’s application under s 394 of the Act would no longer have any reasonable prospects of success, in which case s 587 of the Act would be engaged, allowing the Commission to dismiss the application. I advised the parties that they should be prepared to address s 587 at the proceeding on 10 February 2022.
On 8 February 2022, the company sent an email to my chambers, copied to Mr Strachan and UDE, stating that the parties had executed a deed of settlement and that it was the responsibility of Mr Strachan and UDE to file a notice of discontinuance. The message stated that failure to do so may be an unreasonable act or omission and that the company reserved the right to make an application (clearly, a costs application) in the event that it was required to attend the proceeding on 10 February 2022.
No notice of discontinuance was filed on 8 or 9 February 2022.
The hearing of Mr Strachan’s unfair dismissal application commenced at 10.00am on 10 February 2022, as listed. The company and its representative attended the proceeding. There was no attendance by Mr Strachan or UDE. The company produced a copy of the terms of settlement signed by both parties. I then delivered an ex tempore decision and dismissed Mr Strachan’s unfair dismissal application under s 587(1)(c) of the Act. The proceeding concluded at 10.10am. An edited version of my reasons was published the following day (Strachan v Oncall Group Australia Pty Ltd [2022] FWC 279).
At 10:14 am on 10 February 2022, after the proceeding had concluded, UDE filed a notice of discontinuance.
The costs application
The company contended that the failure of Mr Strachan and UDE to discontinue the application after executing the terms of settlement constituted an unreasonable act or omission in connection with the conduct or continuation of the unfair dismissal application, and that the Commission may and should award costs against Mr Strachan under s 400A and against UDE under s 401. The company submitted that Mr Strachan and UDE had been put on notice by the Commission that if the matter had settled, the application would not have any reasonable prospects of success. The company had also warned Mr Strachan and UDE that it reserved its right to seek costs if it was required to attend the hearing, and that it should have been clear to Mr Strachan and UDE that the application had no reasonable prospect of success once the settlement agreement had been executed and that it should be discontinued.
The company submitted that Mr Strachan and UDE had failed to take any steps to file the notice of discontinuance and that as a result, the company was required to attend the hearing before the Commission on 10 February 2022, which caused the company to incur unnecessary costs. Moreover, Mr Strachan and UDE had not bothered to attend the hearing of their own application. The company contended that costs should be awarded on an indemnity basis because the behaviour of the costs respondents had entailed delinquency justifying the exercise of the Commission’s discretion to award such costs.
Mr Strachan contended that he had not acted unreasonably, because he had believed that UDE had filed the notice of discontinuance on his behalf and that he therefore did not need to attend the proceeding on 10 February 2022. Mr Strachan produced a text message dated 8 February 2022 from Mr Stephen Gaffney, a consultant and director of UDE, who was his adviser. The text stated:
“Hi Andrew, just letting you know that we have to lodge the F50 for your case. The Commission has set a date for a hearing on the 10th, since no F50 has been lodged and therefore the claim is still active. This hearing will be compulsory for all parties to attend. Submissions will also be required. If the other side has to attend this hearing they can conceivably claim a cost order, as the matter has already settled through an agreement signed by both parties and it is therefore an unnecessary expense for them to attend. There is really no option here but to lodge the F50, and I’m just flagging this with you that we will lodge it tomorrow.”
Mr Strachan said that he is inexperienced in legal matters and for this reason had engaged UDE to represent him. He contended that it was reasonable for him to rely on his representative to act diligently and professionally on his behalf.
Mr Strachan also contended in his written submissions that a notice of discontinuance was in fact filed by UDE by email on 9 February 2022, at 23:14pm, which was the evening before the hearing. He said that the same notice of discontinuance appeared to have been filed again the next morning, at 10:14am on 10 February 2022. Mr Strachan submitted printouts of two emails, in the same terms, but bearing two different dates and times. However, the Commission received only a single email from UDE attaching the notice of discontinuance, at 10.14am on 10 February 2022. UDE does not claim to have filed the notice of discontinuance on the evening of 9 February 2022. It is clear that the email dated 9 February 2022 filed by Mr Strachan is the same email that was received by the Commission at 10:14am on 10 February 2022; the time and date on the first-mentioned printout supplied by Mr Strachan reflects the date and time as at Greenwich Mean Time (GMT), that is, London time. In this regard, the notation ‘+0000’ appears on the printout following the time ‘23:14’. I note that 23:14pm GMT on 9 February 2022 was 10:14am Australian Eastern Daylight Time (AEDT) on 10 February 2022. There was only one email sent by UDE to the Commission attaching the notice of discontinuance. The first printout of this email is from a device or system recording time as at GMT, rather than local time. I raised these matters in correspondence with the parties. Mr Strachan advised that he accepted that this is what occurred.
UDE submitted that it had not acted unreasonably, and that even if it had done so, its conduct had not reached the high threshold for an order of costs. UDE said that it was unable to file a notice of discontinuance earlier because it had not received instructions to do so from Mr Strachan. It submitted that in a text message of 3 February 2022, Mr Strachan had specifically instructed Mr Gaffney in the following terms: ‘We aren’t pulling out of the Fair Work until I’ve been fully paid …’ In this regard, the settlement agreement provided for payment in four instalments, the first of which occurred on 3 February 2022. UDE noted that on 8 February 2022 it had requested the Commission to vacate the hearing on 10 February 2022 and to allow a notice of discontinuance to be filed in due course, but that the Commission had declined the request. UDE submitted that Mr Gaffney had then sent a message to Mr Strachan on 8 February 2022 explaining that a F50 needed to be lodged, but that Mr Strachan’s response to Mr Gaffney shortly afterwards had been equivocal. It said that Mr Gaffney had intended to contact Mr Strachan the following day to explain the matter further and obtain conclusive instructions, but that late on 8 February 2022, Mr Gaffney fell ill, and remained unwell for several days, such that he was unable to attend to administrative tasks.
Mr Gaffney submitted a witness statement in which he said that he had been ill throughout January 2022 and had attended a hospital on several occasions from mid to late January. He said that on 9 February 2022 he became especially ill and was unable to attend to his administrative tasks around that time. Mr Gaffney said that when it came to his attention that the proceeding listed on 10 February 2022 had begun, he decided to file the notice of discontinuance, despite the absence of clear instructions from his client.
Consideration
I will first consider the costs application as it relates to Mr Strachan. Section 400A provides that the Commission may make an order for costs against a party to an unfair dismissal proceeding if it is satisfied that the party ‘caused those costs to be incurred because of an unreasonable act or omission … in connection with the conduct or continuation of the matter.’ I do not consider that Mr Strachan acted unreasonably. He had retained the services of UDE, which was acting on his behalf. In his text of 8 February 2022, Mr Gaffney had told Mr Strachan that a F50 had to be filed, and that UDE would file it the next day. But UDE failed to do this. I do not consider that Mr Strachan acted unreasonably by failing to confirm his instructions to UDE. Mr Gaffney’s text on 8 February 2022 did not seek his instructions. It advised him that UDE would file the notice of discontinuance the following day. Mr Strachan was entitled to believe what he had been told. There was no unreasonable act or omission on the part of Mr Strachan. Accordingly, I have no power under s 400A to award costs against him.
As to the company’s application under s 611, even if it should have been reasonably apparent to Mr Strachan that his application had no reasonable prospect of success following the signing of the agreement, it was reasonable for Mr Strachan to rely on the advice of his representative that a notice of discontinuance would be filed. I would decline to exercise my discretion to award costs against Mr Strachan under s 611.
This brings me to the company’s application under s 401 for costs to be awarded against UDE. Section 401(1A) provides:
“(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.”
In my view, UDE unreasonably failed to file a notice of discontinuance on 9 February 2022. Mr Gaffney had told Mr Strachan that he would do so. Contrary to UDE’s submissions, Mr Strachan’s response to Mr Gaffney’s text of 8 February 2022 was not ambiguous. In reply to Mr Gaffney’s statement that ‘we will lodge it tomorrow’, Mr Strachan said: ‘I’m happy to do this as long as they pay my remaining money?’ The question mark at the end of this sentence might connote that Mr Strachan wanted UDE to confirm that indeed he would be paid in full, as the settlement agreement plainly required. But in my view, it is clear that Mr Strachan was no longer insisting that all of the instalments be made before the F50 was filed. If Mr Gaffney had believed that Mr Strachan’s response was ambiguous, he should have asked Mr Strachan to clarify his statement. But no clarification was required. Again, Mr Gaffney had not sought instructions. He had told Mr Strachan what UDE was going to do. What is more, it is clear from Mr Gaffney’s text that he understood perfectly well that it would be untenable to press the unfair dismissal application at the hearing on 10 February 2022. That is why UDE needed to file the F50 beforehand. But Mr Gaffney did do not so.
I accept Mr Gaffney’s evidence that he was unwell but I do not accept that this is a reasonable explanation for his failure to lodge the F50 prior to the proceeding at 10.00am on 10 February 2022. No acceptable explanation is offered as to why Mr Gaffney could not have sent a brief text to a colleague to attend to this matter. Even if Mr Gaffney was so unwell that he was unable to text a colleague on 9 February 2022 to file the F50, he was evidently not in such a state on the morning of 10 February 2022, because at 10:14am he lodged the notice of discontinuance. It has not been explained why Mr Gaffney was able to lodge the F50 at 10:14am, but not earlier in the morning, so as to allow the hearing to be cancelled.
UDE submitted that Mr Gaffney was unable to attend to ‘administrative matters’. Filing the F50 was not a mere administrative matter. It was the subject of a representation that UDE had made to its client, the fulfilment of which would have avoided a hearing which the parties were otherwise required to attend.
There was an unreasonable act or omission on the part of Mr Gaffney, and therefore his firm, UDE, in connection with the conduct or continuation of the matter. While it was reasonable for Mr Gaffney to confer with or contact Mr Strachan on 8 February 2022, it was unreasonable not to file, or have a colleague file, the F50 on 9 February 2022. He unreasonably failed to file the F50 before the commencement of the proceeding on 10 February 2022. And he also acted unreasonably by failing to attend the proceeding on 10 February 2022. Having not lodged the F50 by 10.00am that morning, Mr Gaffney ought to have attended the video hearing. He had been provided with a link. He need only have clicked on it. But there was no appearance by UDE. Instead, a F50 was lodged only after the proceeding had concluded. This is unacceptable.
I note that the deed of settlement did not require the applicant to file a notice of discontinuance until after the settlement monies had been paid, and that several instalments remained to be paid as of 10 February 2022. But the fact that the applicant had no contractual obligation to file the notice of discontinuance prior to the proceeding on 10 February 2022 does not affect the conclusion that there was an unreasonable act or omission by UDE. Once the deed was signed, there was a settlement and accord. The application could not succeed. The Commission is not required to stand matters over until such time as the parties have complied with their settlement obligations. UDE recognised, and in fact told Mr Strachan on 8 February 2022, that there was ‘no option’ but to discontinue the matter, because the matter had settled.
Having concluded that there was an unreasonable act or omission of UDE in connection with the conduct or continuation of the matter, the next question is whether UDE caused those costs to be incurred by the company because of that unreasonable act or omission. The company claims indemnity costs in the amount of $5,150, including $2,000 for preparing the costs application, and an estimated $2000 in the event that the costs application were listed for hearing. As to the latter two items, I have some difficulty in accepting that the unreasonable act or omission of UDE caused the company to prepare the costs application; in any event I would not be inclined to exercise my discretion to award costs in respect of the preparation of the costs application itself. Further, there has been no costs hearing, as the parties agreed for the matter to be determined on the papers. This leaves three items of costs claimed by the company in its itemised schedule. The first of these is an amount of $150.00 in respect of email attendances on the Commission, as well as telephone and email attendances on the company on 8 February 2022. The second is an amount of $500 in respect of telephone and email attendances on the company and general preparation for the hearing on 9 February 2022. The third item claimed is an amount of $500 for attending the hearing on 10 February 2022 and forwarding the terms of settlement to the Commission.
The first amount was not incurred because of the unreasonable act or omission. The fees for this work were incurred on 8 February 2022. The unreasonable act or omission occurred (or commenced) on 9 February 2022. The fees referable to the second itemised amount however were in my view caused by the unreasonable act or omission of UDE. From 9 February 2022, it was reasonable for the company’s representative to undertake preparation for the hearing of the unfair dismissal application on 10 February 2022. The company had been represented by Mr Addison to that point. UDE knew this. If the matter was to run, it was reasonable to expect that Mr Addison would have carriage of the matter, subject to the company being granted permission to be represented. It is true that the likely outcome of the proceeding, in light of the signed deed of settlement and the correspondence that I had sent to the parties directing their attention to s 587, was that the application would be dismissed. The matter had settled. It had no reasonable prospect of success. But the company was not to know whether the applicant would resist the dismissal of his application under s 587. It was reasonable for the company’s representative to prepare for the hearing, even if only to be able to provide advice to the company in the event that permission for representation was not granted under s 596 and the company had to represent itself. I consider that it is reasonable in all the circumstances to allow an amount for general care and conduct in the preparation for the hearing, and that the $500 claimed is a reasonable amount.
The hearing on 10 February 2022 lasted only ten minutes. It was not necessary for me to hear argument from the company’s representative, once the executed settlement agreement had been produced. Of course, UDE had not told the Commission or the company that it would not be appearing at the hearing. The Commission and the company had to proceed on the basis that, because no notice of discontinuance had been filed, the applicant might contest the dismissal of his application under s 587. Nevertheless, the disposition of the application was ultimately a simple matter. Item 1302 of Schedule 3.1 of the Regulations provides that the Commission may grant an amount that it considers to be fair and reasonable for solicitor’s fees if a solicitor appears as counsel, as Mr Addison did on 10 February 2022. Given the brevity of the proceeding, I consider an amount of $250 would be reasonable in the circumstances.
I consider that it is appropriate in all the circumstances to exercise my discretion to award costs against UDE. I reject the submission of UDE that it is not appropriate to do so because the company is ‘much better placed’ to bear the costs that were unnecessarily expended in connection with its attendance at the hearing. UDE should bear the costs I have identified. Mr Gaffney knew, and said in his text to Mr Strachan on 8 February 2022, that the company would be put to unnecessary expense if it had to attend the hearing. I also reject the suggestion that it is inappropriate to award costs because UDE would not have disputed at the hearing that the application had no reasonable prospect of success. If this was UDE’s position, it should have said so in advance of the hearing, in which case the application might have been determined on the papers.
Conclusion
I am satisfied that an order should be made pursuant s 401 that requires UDE to pay the company’s costs in the amount of $750. An order giving effect to this decision is issued separately in PR740242.
DEPUTY PRESIDENT
Determined on the papers
Printed by authority of the Commonwealth Government Printer
<PR740241>
0
1
0