Peter Hennigan v Rocla Pty Ltd T/A Rocla Pipeline Products

[2014] FWC 2290

[2014] FWC 2290

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Peter Hennigan
v
Rocla Pty Ltd T/A Rocla Pipeline Products
(U2013/15600)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 7 APRIL 2014

Application for relief from unfair dismissal – application for costs.

[1] On 14 February 2014 I dismissed Mr Peter Hennigan’s application for relief from unfair dismissal. 1

[2] In reaching that decision I found that Mr Hennigan and Rocla Pty Ltd (Rocla) settled his unfair dismissal claim and that Mr Hennigan failed to discontinue his application after the settlement agreement had been concluded.

[3] At the same time as it filed its application to dismiss Mr Hennigan’s unfair dismissal application, Rocla filed an application for costs. I am satisfied that the application for costs was served on Mr Hennigan and that he received the notice of listing advising him that both the application for dismissal and the application for costs were to be heard on 12 February 2014.

[4] Mr Hennigan did not attend the hearing.

[5] Rocla submitted that Mr Hennigan’s failure to discontinue the preceding was an unreasonable act or omission which caused Rocla to incur costs including the cost of the application to dismiss, the cost of the costs application and the cost of correspondence sent to Mr Hennigan regarding his refusal to file the notice of discontinuance.

[6] On the evidence before me it is not disputed that Mr Hennigan signed a deed of release on 23 December 2013. That deed of release provided that, within seven days of the receipt of the settlement sum, Mr Hennigan was required to file a notice of discontinuance. Rocla complied with the deed and on 2 January 2014 paid the settlement sum to Mr Hennigan.

[7] On 9 January 2014, Mr Hennigan advised the Fair Work Commission (the Commission) that he wished to proceed to a hearing.

[8] Having received advice from the Commission that Mr Hennigan wished to proceed to a hearing, the solicitors for Rocla sent Mr Hennigan an email advising him that he was required to discontinue the application. Mr Hennigan replied to that email but did not file a notice of discontinuance.

[9] On 22 January 2014, the solicitors for Rocla wrote to Mr Hennigan setting out their contention that the settlement agreement reached between the parties was a complete answer to his claim for unfair dismissal and that his application may be dismissed on the basis that it was frivolous or vexatious and/or had no reasonable prospects of success. They referred to various decisions of the Federal Court and the Commission to that effect. That letter advised Mr Hennigan that his refusal to discontinue the proceedings would cause Rocla to incur costs. The solicitors advised Mr Hennigan that if he did not discontinue the application they would apply for costs on an indemnity basis. That letter required Mr Hennigan to file the notice of discontinuance by 4 pm on 24 January 2014.

[10] Mr Hennigan responded to that letter in the following terms:

“Dear Mr Pill, this is the second threatening intimidating email you have sent me in the last week. Whilst your argument is flawed, please don’t let me stand in the way of your clients proposed actions.”

[11] On 24 January 2014 the solicitors again wrote to Mr Hennigan advising him that it was their client’s preference to avoid further costs, time and effort in making an application to have the preceding dismissed and seeking his agreement to file the notice of discontinuance.

[12] Mr Hennigan did not file a notice of discontinuance and provided no explanation as to why he did not file.

[13] Section 400A empowers the Commission to award costs against a party:

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.

[14] Section 400A was included in the Fair Work Act 2009 from 1 January 2012 and applied to dismissals that occurred after that date.

[15] The Explanatory Memorandum stated that:

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.

Conclusion

[16] Mr Hennigan signed the deed of release and accepted the monies payable under the deed of release but failed to comply with his obligation to discontinue his unfair dismissal application. He has provided no explanation to the Commission that would justify that conduct.

[17] He was given fair notice by Rocla of the consequences that would flow from his decision not to comply with his obligations under the deed. Rocla provided him with numerous opportunities to discontinue the application. He did not do so.

[18] This is indeed one of those occasions referred to in the Explanatory Memorandum that warrants an order for costs. Had Mr Hennigan complied with his obligations, Rocla would not have been put to the expense of seeking his compliance and making these applications.

[19] The solicitors provided the Commission with a schedule of costs, one calculated on an indemnity basis, the other calculated in accordance with schedule 3.1 of the Fair Work Regulations 2009.

[20] Commissioner Jones in Stanley v QBE Management Services Pty Limited 2 discussed the circumstances in which indemnity costs may be awarded. In this case I have decided that there is no special or unusual feature in the case to justify the awarding of costs on an indemnity basis.

[21] I will therefore award costs according to Schedule 3.1 of the Fair Work Regulations 2009. Rocla sought an order that Mr Hennigan pay $14,849.99 in costs. I have reviewed the bill of costs and I have decided not to award costs for researching the law in this matter. The law in this area is well settled and one would expect lawyers practising in this field to be familiar with the law. I am also not prepared to include the amount claimed for the general care and conduct associated with preparing the form F1 and form F6. These applications are straight forward and require no special skill to complete.

[22] I have therefore decided to order that Mr Hennigan pay Rocla’s costs of $9,450.60 within 21 days of the making of this order.

DEPUTY PRESIDENT

 1   [2014] FWC 1066 and PR547711

 2   [2012] FWA 10164

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