Phelim Quinn v Sassellas Bar & Tavern T/A Sassellas Tavern

[2016] FWC 8146

[2016] FWC 8146

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Phelim Quinn
v
Sassellas Bar & Tavern T/A Sassellas Tavern
(U2016/6197)

COMMISSIONER WILLIAMS PERTH, 15 NOVEMBER 2016

Application for costs.

[1] This decision concerns an application made by Sassellas Bar and Tavern T/A Sassellas Tavern (Sassellas or the Costs Applicant) for an order for costs pursuant to section 611 of the Fair Work Act 2009 (the Act). The Costs Respondent is Mr Phelim Quinn (Mr Quinn or the Costs Respondent).

Background

[2] Mr Quinn made an application for an unfair dismissal remedy, U2016/6197, (the Unfair Dismissal Application). The Commission as currently constituted issued a decision in that matter on 26 August 2016 1 (the Decision) upholding Sassellas’ objection that the dismissal of Mr Quinn was a case of genuine redundancy and so by virtue of section 385 of the Act could not be an unfair dismissal. Consequently Mr Quinn’s application was dismissed2.

[3] With respect to this application for costs, directions were issued to the parties first requiring Sassellas to file and serve materials in support of its application and then for Mr Quinn to file and serve any materials in reply. Sassellas complied with these directions however Mr Quinn did not file any materials in reply and has not in any other way responded to this costs application or contacted the Commission regarding this matter. Accordingly this matter will be determined based on the materials filed by Sassellas.

Submissions on behalf of Sassellas, the Costs Applicant

[4] Sassellas submit that according to section 611(2)(a) of the Act Mr Quinn lodged a vexatious or without reasonable cause Unfair Dismissal Application and that according to section 611(2)(b) Mr Quinn knew or should have known the Unfair Dismissal Application had no reasonable prospect of success.

Section 611(2)(a) – “vexatious or without reasonable cause”

[5] In the matter of Nilsen v Loyal Orange Trust 3, North J stated that an application will be made vexatiously “where the predominant purpose…is to harass or embarrass the other party”.

[6] The Costs Applicant submits Mr Quinn’s two written statements submitted as evidence to the unfair dismissal proceedings were accentuated with unsubstantiated claims against Mr Sassella of sexual assault, physical assault, racial vilification and fraud.

[7] Mr Quinn’s case provided little to no information as to why he thought he had been unfairly dismissed or why Sassellas’ jurisdictional objection should not be upheld and was void of any supporting evidence or witness statements.

[8] It is submitted the predominant purpose of the Unfair Dismissal Application was to embarrass Mr Sassella with a barrage of unsubstantiated claims.

[9] In the matter of Kanan v Australian Postal and Telecommunications Union 4, Wilcox J said that “where, on the applicant’s own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lack reasonable cause”.

[10] With regard to the above case, the Costs Applicant refers to the Decision, in particular the following paragraphs:

“[22] Mr Quinn was provided with a letter dated 24 March 2016 which explained that his employment was terminated by reason of redundancy due to the downturn in revenue.

…

[27] Mr Quinn agrees that under the direction of Mr Sassella he had earlier terminated the employment of Ms Sully because the respondent could no longer afford her.

…

[33] … under cross-examination Mr Quinn acknowledged that he was aware the respondent’s business was in financial difficulty.”

[11] Based on Mr Quinn’s own evidence, the Costs Applicant submits he should have been aware his application was filed without reasonable cause and it was clear the proceeding would fail.

Section 611(2)(b) – “no reasonable prospect of success”

[12] Mr Quinn’s two written statements provided little to no information as to why he thought he had been unfairly dismissed and were void of supporting evidence and witness statements.

[13] Mr Quinn’s claim was hopeless and/or a nuisance, with no reasonable arguments or evidence put forward in support of his case. The Costs Applicant submits that the case put forward by Mr Quinn had no reasonable prospect of success.

[14] The Costs Applicant asks the Commission to find in favour of its submission for costs and order Mr Quinn to reimburse Sassellas the amount claimed.

The legislation

[15] The relevant provision, section 611 of the Act, is set out below.

“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

[16] In terms of the elements of section 611 of the Act the Courts have previously considered the concepts of applications that are vexatious or without reasonable cause and applications that had no reasonable prospect of success and have provided guidance as to the interpretation of these concepts.

[17] The case law is clear that an assessment of whether an application was made “vexatiously or without reasonable cause” or had “no reasonable prospect of success” should be undertaken with caution, particularly where there are disputed issues of fact or questions of law involved.

[18] In Nilsen v Loyal Orange Trust 5, North J considered the meaning of “vexatious” as follows:

“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage: see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.”

[19] A Full Bench of the Commission in E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 6 considered where proceedings are instituted “without reasonable cause”. The Full Bench said:

“[30] We now turn to the expression 'without reasonable cause'. 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 test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union, Wilcox J put it this way:

“It seems to me that one 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 prospect 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 stigmatise 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.”

...

[33] In construing s.570 and its legislative antecedents courts have observed that the test imposed by the expression 'without reasonable cause' is similar to that adopted for summary judgement, that is 'so obviously untenable that it cannot possibly succeed', ‘manifestly groundless' or 'discloses a case which the Court is satisfied cannot succeed’.” (References omitted)

[20] The test of “no reasonable prospect of success” found in section 611(2) of the Act is an objective test. A Full Bench of the Commission in Baker v Salva Resources Pty Ltd said that a finding of “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. 7

[21] Considering first the submission that the Unfair Dismissal Application was vexatious, the Costs Applicant has submitted a number of allegations were made against Mr Sassella by Mr Quinn which I accept was the case, however it should be remembered the context for this was that Mr Quinn was a relatively unsophisticated self-represented applicant without a clear understanding of what was required of him in the hearing process. Further at first instance the Commission did conclude that in all likelihood Mr Sassella had behaved inappropriately towards Mr Quinn on one occasion. In addition there was no evidence other than the fact that Mr Quinn made a number of allegations about Mr Sassella that his motives in instituting the Unfair Dismissal Application was anything other than to challenge the fairness of his dismissal. In these circumstances I do not accept Mr Quinn’s Unfair Dismissal Application was vexatious.

[22] Secondly considering the submission that the Unfair Dismissal Application was made without reasonable cause, much of the evidence on which Sassellas relied to demonstrate that the dismissal was a genuine redundancy was not information Mr Quinn was privy to at the time his application was made. He for example was unaware of the full details of the trading difficulties in terms of the financial losses Sassellas had been incurring or for how long this had been going on. Mr Quinn was also unaware of the multiple consultations between Mr Sassellas and his accountant Mr Cross as to the actions the business could take to deal with its financial problems. And finally Mr Sassella had not shared with Mr Quinn the details of the forward-looking review that indicated the business was forecast to lose $60,000 over the remaining four months of that financial year if no further action was taken.

[23] Mr Quinn’s knowledge was limited to the fact that prior to being dismissed he was aware that another employee had been dismissed because Sassellas could no longer afford her and as he acknowledged he was generally aware the business was in financial difficulty.

[24] Mr Quinn had also been given a letter saying his employment was terminated by reason of redundancy due to the downturn in revenue and that his position was no longer required. However, because upon being told he was dismissed he became verbally aggressive, no discussions occurred between him and Mr Sassella for there to be a fuller explanation of the situation that had led to his dismissal.

[25] Finally Mr Quinn knew that the day before he was dismissed there had been a clash between him and Mr Sassella. In this case there were also a number of disputed facts.

[26] Consequently in my view on Mr Quinn’s own version of the facts there was a substantial prospect of success. This was not a case where he had instituted the unfair dismissal remedy proceedings without reasonable cause.

[27] Mr Quinn’s evidence sought to demonstrate a pattern of past inappropriate or poor treatment of him by Mr Sassella. Mr Quinn’s evidence also suggested that the real reason Mr Sassella had decided to dismiss him was because of a clash the two men had and that Mr Sassella acted to disguise that true reason by asserting the dismissal was because he could no longer afford Mr Quinn.

[28] At paragraph [33] of the Decision the Commission concluded “Having considered the evidence of both Mr Quinn and Mr Sassella I am persuaded that as Mr Quinn said there had been a clash between the two men on Wednesday, 23 March 2016 and that Mr Sassella may in all likelihood have behaved inappropriately towards Mr Quinn on that evening.” Notwithstanding this finding the evidence however of Mr Cross and Mr Sassella, which was not previously known to Mr Quinn and so was not challenged, as to the historical financial difficulties of the business persuaded the Commission that the true reason for dismissing Mr Quinn was Sassellas’ need to reduce its staff costs in response to a dire financial situation. For these reasons the Commission concluded that the dismissal was a redundancy.

[29] In this case there was a factual dispute as to what had occurred in the lead up to the dismissal. At first instance there was also a finding that there had been a clash between the men immediately prior to Mr Sassella dismissing Mr Quinn which Mr Quinn believed was the real reason for his dismissal. Given these circumstances it could not be said that the Unfair Dismissal Application was obviously untenable or could not possibly succeed if the factual findings on the disputed issues had supported Mr Quinn’s belief. I do not accept that Mr Quinn’s Unfair Dismissal Application had no reasonable prospect of success.

[30] Sassellas have failed to satisfy me that Mr Quinn’s Unfair Dismissal Applicaiton was made vexatiously, was made without reasonable cause or that it should have been reasonably apparent to him that he had no reasonable prospect of success.

[31] There is no basis for the Commission to order Mr Quinn to pay costs under section 611 of the Act. Consequently Sassellas’ application for a costs order will be dismissed.

[32] An order to that effect will now be issued.

COMMISSIONER

Final written submissions:

The Costs Applicant, 26 September 2016.

 1   [2016] FWC 6037.

 2   PR584660.

 3 (1997) 76 IR 180.

 4 (1992) 43 IR 257.

 5 (1997) 76 IR 180.

 6   [2014] FWCFB 810.

 7  [2011] FWAFB 4014.

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