Polgampola Abeyratna v Iron Mountain Australia Group Services Pty Limited

[2021] FWC 5603

[2021] FWC 5603

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Polgampola Abeyratna
v
Iron Mountain Australia Group Services Pty Limited
(U2020/7733)

DEPUTY PRESIDENT DEAN CANBERRA, 7 SEPTEMBER 2021

Application for an unfair dismissal remedy – application for costs – s.400A and s.611.

[1] Mr Polgampola Abeyratna made an application pursuant to s.394 of the Fair Work Act 2009 (the Act) seeking a remedy for his alleged unfair dismissal by Iron Mountain Australia Group Services Pty Limited (Iron Mountain).

[2] In a decision issued on 14 December 2020 1, the Commission found that his dismissal was not harsh, unjust or unreasonable and dismissed the application.

[3] The Respondent now seeks an order for costs pursuant to ss.400A and 611 of the Act.

[4] The application for costs was listed for hearing initially on 30 April 2021 and later rescheduled for 11 May 2021. Directions were issued for the filing of written submissions and any documentary material by both parties. Iron Mountain filed its material in support of the application on 16 February 2021.

[5] On 8 March 2021 Mr Abeyratna wrote to the Commission seeking to amend the dates for the filing of submissions and provided in support of his request a Certificate of Capacity stating that he had no work capacity for any employment from 21 February to 20 March 2021. Mr Abeyratna also submitted a Medical Assessment Certificate dated 19 November 2020 issued by the Workers Compensation Commission.

[6] On 9 March 2021 the Commission issued Amended Directions requiring Mr Abeyratna to file submissions by 6 April 2021 and Iron Mountain to file its submissions in reply by 20 April 2021.

[7] Mr Abeyratna did not comply with the Amended Directions and on 4 May 2021 wrote to the Commission in the following terms:

“I am still psychologically unfit to write a response to applicant's application. Proof to my current medical condition depicts in the attached certificate of capacity.

If the FWC is unable to grant any further extension under medical grounds, I would prefer to be present at the tele hearing on 11th May at 11 am on the given conference entry permit and show my presence.

Finally please note that the request for patient approval for psychological treatment has now been received on 30 April 2021. It was verbally confirmed by my case manager at i care insurance … I am yet to receive instructions from the treating hospital for admission details.”

[8] Attached to this communication was another Certificate of Capacity dated 20 April 2021 which stated that Mr Abeyratna had no work capacity for any employment from 21 April to 20 May 2021.

[9] The Commission subsequently advised the parties that the hearing on 11 May 2021 would be conducted by telephone.

[10] At 10.01 am on 11 May 2021, about an hour before the hearing was scheduled to commence, Mr Abeyratna wrote to the Commission stating:

“Due to the increased medical condition prevailed I am unable to participate.”

[11] At the hearing, Ms S Price appeared with permission for the Respondent. I determined that the hearing should proceed in Mr Abeyratna’s absence on the basis that the medical certificates provided by Mr Abeyratna did not substantiate any incapacity which would explain his failure to provide a response to the application and to participate in the hearing.

[12] For the reasons set out below, I find that it is appropriate to make an order for costs against Mr Abeyratna.

Relevant legislation and principles

[13] The costs application is brought under s.400A and 611(2)(a) and (b) of the Act which provide:

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.

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.

…”

[14] The Act provides the general rule that parties must bear their own costs in proceedings before the Commission. 2 The Act also facilitates exceptions to this general rule and empowers the Commission to award costs in specific circumstances. However, such power is to be exercised with caution and in clear cases.³ It is only in rare and exceptional circumstances that costs will be awarded.

[15] In Hansen v Calvary Health Care Adelaide Limited 4 a Full Bench said in relation to s.611:

“[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1)

[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all.” 5

[16] The principles concerning the interpretation and application of s.611(2)(a) considered in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 6 were summarised by the Full Bench in Chapman v Ignis Labs Pty Ltd7:

“•  An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.

•  An application is not made without reasonable cause simply because the application did not succeed.

•  Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether 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 characterise the application as having been made without reasonable cause.

•  In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.

•  An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed.” 8

[17] In Baker v Salva Resources Pty Ltd 9, the Full Bench summarised the relevant principles in relation to s 611(2)(b) as follows:

“[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.” (Footnotes omitted)

[18] In Gugiatti v SolarisCare Foundation Ltd 10, the Full Bench noted that section 400A “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.”11

[19] In Roy Morgan Research v Baker 12, the Full Bench held that “a reasonable person will determine if and how to respond to an offer of settlement after considering all of the circumstances of the case including the terms of settlement in relation to the relief sought; the relative strength of the parties cases; the likely length and cost of proceeding to hearing if the matter does not settle; and adverse consequences of acceptance of a settlement rather than prosecuting or defending the primary application.”

Background to the costs application

[20] The relevant facts are largely uncontroversial.

[21] Mr Abeyratna was employed with Iron Mountain as a warehouse assistant until his employment ceased on 27 May 2020. At the time of his dismissal, he had not attended work for about 15 months on medical grounds and was notified that his employment was terminated as he had demonstrated no capacity to work in the foreseeable future.

[22] Prior to his dismissal, Mr Abeyratna had raised a number of grievances with Iron Mountain involving various complaints and requests. Those matters were addressed in a meeting on 10 April 2019 and a detailed written response was provided to Mr Abeyratna on 26 August 2019.

[23] In 2019 Mr Abeyratna was diagnosed with a major depressive disorder and took a period of sick leave in February 2019. Towards the end of February 2019 he commenced discussions with Iron Mountain concerning his return to work. Mr Abeyratna indicated that he would not return to work until all his workplace grievances had been addressed and resolved.

[24] Mr Abeyratna did not accept that his grievances were resolved and continued to be absent on paid leave. He made a workers compensation claim and received payments from the insurer until his claim was formally rejected in August 2019. He subsequently initiated a challenge in the Workers Compensation Commission (WCC) but the claim was later discontinued. In about June 2020 he renewed the claim with the WCC.

[25] In August 2019 Mr Abeyratna attended an independent medical examination (IME) on Iron Mountain’s direction. This was followed by a medical report indicating that Mr Abeyratna was medically fit to return to full time work. However, Mr Abeyratna indicated that he would not return to work until all his workplace grievances had been addressed and resolved.

[26] On 26 August 2019, Mr Abeyratna was advised that his position would be made redundant and Iron Mountain proposed to discuss redeployment options. Following negotiations, it was agreed that Mr Abeyratna would end his employment on 30 September 2019 by way of redundancy with payment of 5 weeks’ notice, 7 weeks’ severance and an ex gratia amount of $10,000. Iron Mountain later sent a signed deed to Mr Abeyratna’s then lawyers. Mr Abeyratna later resiled from the agreement and the deed was not executed.

[27] Mr Abeyratna continued to provide medical certificates attesting he had no capacity for work and commenced unpaid leave on 30 September 2019 after his paid leave entitlements had been exhausted.

[28] On 10 October 2019 he filed a general protections application in the Commission. In that application Mr Abeyratna sought orders to reopen the grievances arising out of his employment with Iron Mountain. The matter proceeded to conciliation but did not reach a resolution. The application was not pursued after the failed conciliation.

[29] By letter of 4 May 2020, Iron Mountain advised Mr Abeyratna that his employment was at risk if he did not provide evidence of being fit to return to work. Failing to provide any such evidence, Mr Abeyratna was notified on 27 May 2020 that his employment was terminated with effect on 3 July 2020. He filed the unfair dismissal application on 5 June 2020.

[30] Following a conciliation conference on 9 July 2020 Iron Mountain offered to resolve the unfair dismissal proceedings and made a further offer to pay Mr Abeyratna in order to avoid the cost and inconvenience of running the hearing. The offer put was 5 weeks’ paid notice and 8 weeks’ severance, totalling $12,542.75 gross. The offer was rejected.

[31] At a pre-hearing directions before Deputy President Sams, Iron Mountain offered to settle the matter to avoid the costs of a hearing for a sum of $15,000, representing 5 weeks’ notice, 8 weeks’ severance and an additional amount of take it to $15,000 net in Mr Abeyratna’s hands. Mr Abeyratna agreed to the offer and a deed of release was provided in similar terms to the first deed signed by him in October 2019. He then refused to sign the deed and so the matter came before Deputy President Sams for hearing.

[32] In dismissing the application, the Deputy President made the following observations:

To observe that the applicant was a very difficult employee to manage, is truly an understatement. He was uncooperative and demanding. He demonstrated little understanding or willingness to comply with the day to day ordinary expectations of his responsibilities and obligations as an employee, consistent with his contract of employment. He refused to work at certain company sites, or with other people who he perceived were not supportive of his views. Every reasonable workplace instruction he disagreed with was met with a formal complaint. When all of his numerous historic complaints and grievances were investigated and found to be either resolved or having no merit, he simply refused to accept any outcome with which he disagreed. In my view, not even the wisdom of King Solomon would have convinced him his grievances were, for the most part, without substance.

[45] Ultimately, of course, all of these matters are not terribly important or even relevant, as they were not the reasons for the applicant’s dismissal. Unfortunately, the applicant did not really engage with the real reason in any constructive or sensible way. In my view, the applicant has an utterly misplaced notion as to what his case is about and what he can achieve through the impermissible remedies he seeks; see: [1] above. Despite my frequent, clear reminders that his case is not about him seeking to reopen of all his numerous complaints (which he concedes were the subject of his earlier workers’ compensation proceedings, and now recommenced after closure in 2019, and in his General Protections application, which went nowhere), the applicant continues to maintain that he will not RTW (even when he was earlier declared fit to do so), unless all his grievances are resolved entirely to his satisfaction. To the extent the applicant may get to air his grievances, that opportunity may arise in the reopened workers’ compensation proceedings, but they are not relevant for present purposes.

[46] Regrettably, this persistent and unrealistic mantra has become so obsessive that the Doctor’s ongoing medical assessment is that he is totally unfit to RTW and there is no prognosis of when, or even if, he will be ever fit to do so. This is the gravamen of this case and the reason why the applicant was dismissed after having not worked for the respondent for 15 months. …”

[33] The Deputy President concluded that Mr Abeyratna was not unfairly dismissed.

The costs application

[34] Iron Mountain seeks costs against Mr Abeyratna on an indemnity basis pursuant to s.611(2) of the Act on the ground that the unfair dismissal application was made vexatiously and without reasonable cause; and that it should have been reasonably apparent to him that the application had no reasonable prospects of success.

[35] In the alternative, Iron Mountain seeks costs against Mr Abeyratna on an indemnity basis pursuant to s.400A of the Act on the ground that he caused Iron Mountain to incur costs because of of his unreasonable continuation of the proceedings.

[36] Iron Mountain filed written submissions in support of the costs application and a witness statement made by Ms Victoria Casey, a Senior HR Business Partner of Iron Mountain. Attached to the statement is a copy of the tax invoices that Iron Mountain had received from Susan Price Legal.

[37] The indemnity costs sought by Iron Mountain include:

a. For period 1 May 2020 to 13 July 2020 as to costs in the amount of $4,500;

b. For period 14 July 2020 to 28 August 2020 as to costs in the amount of $7,790

c. For period 29 August 2020 to 23 September 2020 as to costs in the amount of $5,940

[38] In addition, Iron Mountain seeks indemnity costs incurred by it in defending Mr Abeyratna’s general protections application for the period 11 October to 31 October 2019 in the amount of $3,960.

Submissions

Section 611(2)(a) and (b)

[39] Iron Mountain submitted that Mr Abeyratna’s unfair dismissal application was made without reasonable cause and had no prospect of success. It contended that Mr Abeyratna pursued relief that the Commission had no power to grant and indeed was misguided as to the nature of the claim he had brought. This was noted by the Deputy President in the decision: “In my view, the applicant has an utterly misplaced notion of what his case is about and what he can achieve though the impermissible remedies he seeks” 13. If Mr Abeyratna had properly assessed the material filed in the proceedings including his own, it would have led to the conclusion that his claim was unlikely to succeed.

[40] Further, a reasonable person would have determined the application had no reasonable prospects of success as the employment was terminated on the basis of his long term incapacity and refusal to work. This was supported by the medical evidence he filed in support of his own claim that he had no capacity for work. In addition, Dr Saad’s evidence, which Mr Abeyratna accepted, was that even if he was medically fit, he would not return to work until his past grievances had been resolved.

[41] In the alternative, Iron Mountain claimed that the application was brought vexatiously and for two collateral purposes, first being to punish and embarrass those employees of Iron Mountain he considered had aggrieved him in the course of his employment. The second is to assist him in his workers compensation proceedings.

[42] Iron Mountain said that Mr Abeyratna attempted to call a large number of witnesses who were employees involved in his many grievances and none of whom were involved in the decision to terminate his employment. It was also his evidence which was referenced by the Deputy President that “he said he would not be satisfied unless several members of staff, including senior managers, were ‘punished, made to suffer, and dismissed’.” These, Iron Mountain submitted, demonstrated that Mr Abeyratna ran his case vexatiously and for an ulterior purpose.

Section 400A

[43] In relation to s.400A Iron Mountain submitted that Mr Abeyratna engaged in unreasonable acts or omissions that caused it to incur costs. It relied on the statement of Ms Casey which set out the efforts made by the employer including a number of offers made to settle all employment claims with Mr Abeyratna.

[44] Iron Mountain submitted that Mr Abeyratna had acted unreasonably in his failure to:

a. release the signed deed to Iron Mountain’s lawyers in October 2019 before any proceedings commenced;

b. accept the offer made during the General Protections matter in October 2019;

c. accept the offer made after the conciliation conference in his unfair dismissal claim on 9 July 2020; and

d. sign the deed in the terms that he had agreed to at the directions hearing on 30 July 2020

[45] Further, Iron Mountain noted the following conduct of Mr Abeyratna which it claimed met the requirements of s.400A(1):

a. He filed voluminous material raising past grievances and attempted to call a significant number of witnesses that he said were relevant to those grievances.

b. He filed voluminous materials which were largely irrelevant to the matters in issue.

c. He tried to call a large number of witnesses where none of those persons were involved in the decision to terminate his employment on the basis of incapacity.

d. He asked for an interpreter when his command of English, both written and spoken, was very good.

e. He wasted the time of both Iron Mountain and the Commission, as was recognised by the Deputy President in his decision: “In the face of the applicant’s lack of cooperation and refusal to focus on the relevant issues, the respondent is to be commended for its patience and attention to trying, albeit unsuccessfully, to accommodate all of the applicant’s concerns. It has no doubt expended considerable time, resources and costsin doing so, in the face of unbelievable resistance, including in various other legal proceedings.” 14

[46] Iron Mountain asserted that the Commission can be satisfied that the conduct and behaviour of Mr Abeyratna, fitted the definition of unreasonable acts or omissions under s.400A(1).

[47] It was also submitted that Mr Abeyratna had been on notice from the beginning of the offer process that costs orders would be sought against him if Iron Mountain was successful in defending his application. Nonetheless, he continued to reject and resile from reasonable offers and caused Iron Mountain significant costs on time and money.

[48] Iron Mountain further contended that this is an appropriate case for the exercise of the discretion to award costs on an indemnity basis given the way Mr Abeyratna conducted in these proceedings and his sustained failure to engage in any meaningful assessment of his prospects of success. 15

Consideration

[49] I will not make an order for costs in relation to Mr Abeyratna’s general protections claim, however for the reasons set out below I will make an order for costs in relation to his unfair dismissal claim.

[50] Mr Abeyratna’s unfair dismissal claim was in my view manifestly untenable, and it ought to have been reasonably apparent to My Abeyratna that his application had no reasonable prospects of success.

[51] In my view, a reasonable person would have determined the application had no reasonable prospects of success as his employment was terminated on the basis of his long term incapacity and refusal to work. This was supported by the medical evidence he filed in support of his own claim that he had no capacity for work. In addition, Dr Saad’s evidence, which Mr Abeyratna accepted, was that even if he was medically fit, he would not return to work until his past grievances had been resolved to his satisfaction.

[52] Irrespective of Mr Abeyratna’s actual understanding or state of mind in bringing his application, the question of whether it should have been reasonably apparent to him that his application had no reasonable prospect of success must be viewed objectively, and from this viewpoint it is clear that the application was without prospect.

[53] Accordingly, I am satisfied that the condition in s.611(2)(b) has been met.

[54] It is unnecessary to determine whether the condition in s611(2)(a) is also satisfied given my finding that the jurisdictional prerequisite in s611(2)(b) has been established. Similarly, it is also unnecessary for me to consider s.400A

[55] I turn now to whether I should exercise my discretion in favour of awarding costs to Iron Mountain. Iron Mountain has incurred unnecessary expense in responding to this application. So much is clear based on the findings of Deputy President Sams and the matters addressed in the submissions set out above, particularly as to the offers made to resolve matters with Mr Abeyratna. Further, it is clear that Mr Abeyratna was motivated to continue his application because of his desire to ‘punish’ various employees of Iron Mountain and make them suffer.

[56] For these reasons, I am satisfied that this is a case where I should exercise discretion to award costs against Mr Abeyratna pursuant to s.611(2)(b) of the Act.

[57] There is a discretion to order ‘some or all’ of the relevant costs under s.611, taking into account what is fair and just (s577(a)). I consider that Mr Abeyratna’s pursuit of his application was clearly unreasonable, but I am not convinced that it meets the test of delinquency. Accordingly, I will make an order for costs on a party/party basis.

[58] Iron Mountain provided three invoices from Susan Price Legal in relation to the unfair dismissal claim totalling $18,680 but has not submitted an itemised schedule of costs in accordance with Schedule 3.1 of the Act.

[59] Iron Mountain is directed to provide an itemised schedule of costs in accordance with Schedule 3.1 within 14 days of the date of this decision, after which time I will finalise an order for costs.

DEPUTY PRESIDENT

Appearance:

S Price for Iron Mountain Australia Group Services Pty Limited.

Hearing details:

2021.
Sydney (By telephone):
May 11.

Printed by authority of the Commonwealth Government Printer

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 1   [2020] FWC 6657.

 2 Section 611(1) of Fair Work Act 2009.

3Roberts v Ngaanyatjarra Health Service[2016] FWC 4875.

 4   [2016] FWCFB 8162.

 5   Ibid at [15] and [16].

 6   [2014] FWCFB 810.

 7   [2021] FWCFB 932.

 8 Ibid at [14].

 9  [2011] FWAFB 4014.

 10   [2016] FWCFB 2478.

 11 Ibid at [61].

 12   [2014] FWCFB 1175.

 13 Ibid at [45].

 14 Ibid at [55].

 15   See Goffett v Recruitment National Pty Limited [2009] AIRCFB 626, Colgate-Palmolive Co v Cussons Pty Limited (1993) 46 FCR 225 at 233, Anthony Stuckey v Prosegur Australia Pty Ltd[2020] FWC 3586 at [80] and [81] and the principles set out in these decisions.