Raury Adams v J a Fillmore and Co

[2016] FWC 3681

[2016] FWC 3681

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.372—General protections

Raury Adams
v
J A Fillmore and Co
(C2015/7321)

COMMISSIONER LEE MELBOURNE, 15 JUNE 2016

Application for costs order - s.372 conciliation conference - voluntary participation in attendance conference - application for costs made under s.375B and s.611(2)(a) and (b) - whether it should have been reasonably apparent to the applicant the application had ‘no reasonable prospects of success’ - whether application was ‘vexatious’ or ‘without reasonable cause’ - application for costs dismissed.

Introduction

[1] This decision arises from a general protections application made under s.372 of the Fair Work Act 2009 (the ‘Act’). A s.372 application is one made where a person is not entitled to apply to the Fair Work Commission (the Commission) under s.365 for the Commission to deal with the dispute. That is, the dispute does not involve an allegation that the Applicant has been dismissed in contravention of Part 3-1 General Protections of the Act. In addition there is no time constraint specified under the Act in which to file a s.372 application.

[2] Mr Raury Adams (the Applicant) lodged his application by way of a Form F8C –General Protections Application Not Involving Dismissal (Form F8C) with the Commission on 13 November 2015 alleging that J A Fillmore and Co (the Respondent) had taken adverse action against him. The Applicant is an Australian Legal Practitioner and was employed by the Respondent, a law firm located in Melbourne.

[3] The alleged adverse action complained of was that the Applicant had sought bereavement leave due to the death of his brother in law and that it was sought for personal reasons as well as to support his wife. Further, that the bereavement leave request was declined and that he was not granted carers leave. The Applicant claimed that he took leave irrespective of not being granted carers leave and that during his absence from the workplace he received threatening emails and correspondence from his employer.

[4] The Applicant claims that the Respondent contravened s.340, 343, 344 and s. 355 of the Act when they took this action against him. The Applicant submitted that the alleged adverse action contravened the nominated sections of the Act by way of his employer not granting him or allowing him to take his legal entitlement to bereavement leave accompanied by harassment, coercion and bullying during carers leave. Further, the Applicant submitted the following: “failure to pay me my accrued entitlements, being superannuation entitlements, annual leave entitlements and pay entitlements which remain outstanding at the time of filing this application”. As to remedy, the Applicant sought “Adverse Action Orders”.

[5] On 24 November 2015 the Respondent filed a Form F8A - Response to a general protections application (Form F8A). The Respondent named Logie-Smith Lanyon Lawyers (LSL Lawyers) as their representative. In summary, the Respondent submitted that the proceeding had not been properly instituted and that the Applicant had failed to identify a proper basis for seeking the remedy of “Adverse Action Orders”. Further, that the Applicant appeared to have filed the application to seek a review of the payment and calculation of his wages and other entitlements and that the Respondent has properly paid all his entitlements.

[6] In responding to the contraventions, the Respondent submitted that the Applicant was entitled to and did receive 2 days of paid compassionate leave, 2 days of paid personal leave (carers leave) and 2 days of unpaid personal (carers leave) during the October/November 2015 period.

[7] During the Applicant’s absence from work on leave, the Respondent claimed that they accessed files managed by the Applicant and as a result, became concerned about the “conduct of certain client files”. An investigation ensued, the Applicant was stood down and then directed to return to work for an interview on 9 November 2015. At 8.15am on that day, the Applicant advised that he had resigned “with immediate effect” and was no longer employed by the Respondent. The Respondent further denied all of the allegations made, including the claims of threatening emails, coercion, and harassment or bullying.

[8] In response to Q6.1 of the Form F8A, which asks if the Respondent has a jurisdictional objection to the application the Respondent answered “no”. However, in the section where Respondent is asked to explain why they answered “yes”, the Respondent provided the following:

“Despite answering “no” to 6.1 above, the Respondent maintains that:

• there is no contravention of the relevant provisions of the Fair Work Act 2009 (Cth); and



• the remedies that the Applicant appear to be seeking is not an available remedy under those provisions.

The Respondent specifically reserves its rights to rely on these objections. However, if it pleases the Commission, the Respondent is prepared to participate in a conference in the first instance, to seek to resolve the factual dispute.”

[9] The Respondent also submitted that the filing of the application by the Applicant is unreasonable and that these proceedings have been instituted vexatiously and without reasonable cause.

[10] The matter was listed for attendance conference at 2.00pm on Monday 7 December 2015. The Applicant sought a change of date as he was commencing employment with his new employer that day. The matter was re-listed at 2.30pm on Friday 4 December 2015 in Melbourne.

[11] On the 3 December 2015, LSL Lawyers wrote to my associate repeating the claims made in the Form F8A that the application had not been properly instituted and was motivated by the desire of the Applicant to seek a review of his payment of entitlements. The correspondence confirmed the agreement of the Respondent to participate in a conference before the Commission, “…for the purpose of addressing the factual matters in dispute between the parties and as a courtesy to the Commission”. The correspondence noted that the Respondent’s Principal Mr Fillmore was not available to attend the conference as he is a sole legal practitioner operating a small business and not able to delegate his work and that Mr Kristopher Cook from LSL Lawyers would attend and seek leave to appear for the Respondent. The letter advised that Mr Fillmore would be available by phone to provide instructions as required.

[12] Also on 3 December 2015, the Respondent wrote to the Applicant in the following terms:

“Dear Mr Adams Without Prejudice

J A Fillmore Pty Ltd ats Raury Adams
Fair Work Commission
Proceeding No. C No. 201517321 (Your Application)

We refer to Your Application and advise that we are instructed to act for J A Fillmore Pty Ltd (JAF).

1. Your Application

1.1 In Your Application you have sought that the Fair Work Commission (Commission) make “Adverse Action Orders” (Remedy).

1.2 As you are aware, the Respondent maintains that Your Application has not been properly instituted and that you have failed to identify a proper basis for seeking the Remedy (or indeed, any remedy). Further, it appears that you commenced Your Application in order to seek a review of the payment (and calculation of) your wages, superannuation and other entitlements - matters which are not within the jurisdiction of the Commission in respect of Your Application.

1.3 In those circumstances, the Respondent says that the filing of Your Application is unreasonable and that you have instituted these proceedings vexatiously and without reasonable cause and Your Application has no reasonable prospects of success.

2. Your Allegations

2.1 In your Application you claim that “adverse action” arose due to:

(a) JAF not granting or allowing you to take your legal entitlements;

(b) JAF’s harassment, coercion and bullying during leave; and

(c) JAF failing to pay your accrued entitlements- superannuation, annual leave and personal leave.

(Your Allegations)

3. JAF’s position

3.1 JAF denies each of Your Allegations and says further:

(a) You were entitled to and did receive two (2) days of paid compassionate leave in respect of your absences from work on 22 and 23 October 2015.

(b) You were entitled to (and did receive) two (2) days of paid personal leave (carer’s leave) in respect of your absences from work over the period 26 to 30 October 2015 and 2 November 2015.

(c) You were entitled to (and did receive) at least two (2) days of unpaid personal leave (carer’s leave) in respect of your absences from work over the period 26 to 30 October 2015 and 2 November 2015.

(d) At 8:15am on 9 November 2015, you resigned from your employment with the Respondent with “immediate effect” and it is the Respondent’s position that you are not entitled to receive any further payments in connection with your resignation.

(e) The Respondent has made arrangements to ensure that your superannuation payments will be paid into your nominated fund, in accordance with the Respondent’s usual practices.

3.2 As an Australian Legal Practitioner, you will undoubtedly be aware that in respect of Your Application, the Commission has no jurisdiction to order the Remedy, or to review (or make orders in respect of) your wages, entitlements and superannuation.

4. Costs

4.1 Having regard to the issues you have raised in Your Application, the Remedy you have sought and the jurisdictional issues identified at paragraph 3.2 above, the Respondent says that the filing of Your Application was ill-conceived, was commenced vexatiously and without reasonable cause and has no reasonable prospects of success.

4.2 JAF has expended (and continues to expend) unnecessary time and resources in respect of Your Application and will continue to incur unnecessary costs associated with preparation for and attendance at the conference. JAF will seek to recover those costs from you.

4.3 In this regard, we refer you to sections 400A and 611 of the Fair Work Act 2009 (Cth) which provide, as follows:

“400A Costs orders against parties

(1) The Commission 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 Commission 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 Commission 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 Commission’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 Commission.

(2) However, the Commission 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 Commission if:

(a) the Commission 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 Commission 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.”

4.4 JAF demands that you withdraw Your Application and file and serve a Notice of Discontinuance by no later than 1.00pm on Friday 4 December 2015. In the event that you fail to do so, and continue with Your Application, JAF will seek to rely upon section 400A and 611 above to recover its costs against you.

4.5 It is unclear what you expect to achieve by continuing with Your Application, particularly in circumstances where Your Application must fail for the reasons outlined above at paragraph’s 1.2 and 3.2 above.

5. Without Prejudice Offer

If you withdraw Your Application and file a Notice of Discontinuance by the deadline, 1.00pm on Friday 4 December 2015, JAF will not pursue a costs application against you in the Commission.

We look forward to your urgent response.

JAF otherwise reserves all of its rights.

Yours faithfully
LOGIE-SMITH LANYON” 1

[13] The Respondent describes this correspondence in their submissions as a “first offer”.

[14] The conference took place on 4 December 2015. The Applicant failed to appear at the conference in person. Despite the notice of listing being clear that the conference was to be held at the Fair Work Commission in Melbourne, the Applicant claimed that he thought the conference would occur by telephone. The Applicant was contacted by telephone and participated in the conference by telephone. Mr Cook appeared for the Respondent, sought permission to appear and was granted permission to appear. Mr Cook was granted permission to appear, consistent with his submissions dealing with S. 596 of the Act.

[15] Less than 30 minutes prior to the conference, the Applicant emailed my chambers the following request:

“Dear Ms Lee,

In case I may need to make an amendment to my application, could you please direct me to the amendment form for filing.

Kind regards,
Raury”

[16] My associate, Ms Fijalski, did not respond to the email as the conference was less than 30 minutes from commencing. At the conference, the Applicant sought to amend the claim to one where he had been constructively dismissed, and that the purported dismissal was adverse action. As the Applicant claimed he was constructively dismissed he was entitled to make an application under s.365 of the Act. It follows that pursuant to s. 372(b) of the Act, the Applicant could not make an application under s. 372. Mr Cook made this point on the day of the conference and it is referred to in paragraph 3.13(c) of the Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016. It is possible that the Applicant could have taken steps to make an application under s.365. However, an application under s. 372 could not be validly made in circumstances where the Applicant was indicating that he was constructively dismissed. Consistent with s. 375 of the Act, I advised the parties that I considered the s.372 application presently before me had no reasonable prospects of success.

[17] At the conclusion of the conference, no settlement was reached. However, the Respondent agreed to prepare a reconciliation of the wages and entitlements of the Applicant and would do so by 18 December 2015. LSL Lawyers wrote to the Applicant on 11 December 2015 advising they had received relevant information from their client and were reviewing it. On 15 December 2015 the Respondent provided an email advising that there was some difficulty in providing the reconciliation. On 18 December 2015 LSL Lawyers wrote to the Applicant by email in the following terms:

“We refer to our email correspondence on 11 December and 15 December 2015 regarding the reconciliation of your wages and entitlements.

Further to the agreement reached between the parties at the conciliation conference before Commissioner Lee, for JA Fillmore & Co (JAF) to provide both you and the Commissioner’s chambers with a reconciliation of your wages and entitlements (Agreement), please see attached leave calculations for the term of your employment at JAF.

As you are aware, there has been some difficulty in applying your various leave entitlements to the term, due to uncertainly [sic] as to whether you applied for leave and the basis of your leave applications, on certain days.

Based on the attached calculations, there is a maximum of 1 personal leave day which you may have accrued, but in respect of which, it is not clear that you were entitled to payment, due to (amongst other things) notice and evidence issues.

Without any admission as to liability and in the interests of not incurring further costs, JAF is prepared to offer you [offer omitted], on a confidential and without prejudice basis, in full and final settlement of any claim for unpaid wages or entitlements.

Please let us know if this is acceptable to you. Alternatively, if you take issue with any aspect of the attached calculations, please let us know and we will seek further instructions.

We are also instructed that JAF made a final payment of $913.46 into your BT Super account on 15 December 2015. If you accept the above offer, JAF will make a further payment into your BT Super account, in accordance with its obligations under the superannuation guarantee legislation.

We trust that this resolves the substantive issues raised by you in your General Protections Application, and the remedy sought by you in the Application and at the conciliation conference before Commissioner Lee (noting however that JAF maintains that these issues and the remedy sought in the Application are unrelated to the relevant provisions of the Fair Work Act).

In accordance with the Agreement, we will now forward this email and the attached to Commissioner Lee’s chambers.

Our client’s rights are expressly reserved.” 2

[18] It is apparent from this correspondence that aside from providing the reconciliation agreed the Respondent provided an offer to the Applicant at this point to settle the matter.

[19] The Applicant replied to Mr Cook by email that same day and copied in my chambers. The email read as follows:

“Dear Associate -

You may close your files on this matter as I will not be continuing my application.

I will follow alternative avenues going forward. I would like to thank yourself and Commissioner Lee for your efforts in this matter.

Dear Mr Cook,
Thank you for your email.

I note that you’ve been unable to provide payment advice as I had requested.

Unfortunately your calculations fail to account for:

- Personal Leave (3 Days);
- Annual Leave (5 Days); and
- Public Holiday Leave (1 Day).

There is a substantial difference between what JAF has alleged to have paid and what his firm has actually paid to my bank account in respect of my entitlements (approximately $2200).

I will now lodge the necessary forms to engage the relevant bodies in respect of outstanding pay and superannuation.

I will be providing this email to the ATO and the Ombudsman in respect of your client’s withholding of my superannuation and entitlements.

Regards,
Raury Adams”

Application for Costs

[20] That same day being 18 December 2015, the Respondent filed a Form F6 - Application for Costs (Form F6). The application sought a costs order against the Applicant under s.611 (2)(a) and (b) and/or 375B of the Act. No grounds were set out in the application. Rather it was set out that the Respondent would file an outline of its submissions, affidavit material and details of legal costs in accordance with directions of the Commission.

[21] Shortly after the Form F6 was filed the Applicant filed a Form F50 – Notice of Discontinuance (Form F50) dated 18 December 2015. It is noted that the Applicant also filed a second Form F50 on 18 January 2016. To be clear, the application was taken by me to be discontinued on 18 December 2015 when the Applicant advised my chambers and the Respondent that “you may close your files on this matter as I will not be continuing my application”. Pursuant to s.377 of the Act an application for costs orders in relation to an application under s.365 or s.372 must be made within 14 days after the FWC finishes dealing with the dispute. The application for costs was filed shortly after the Applicant sent the above correspondence and was therefore made within the required statutory time period.

[22] On 23 December 2015, Directions were issued for the filing of materials in relation to the application for costs. Neither party sought that a hearing be convened. On 11 February 2016 my associate sought a response from the parties as to whether they consented to the matter being determined on the papers without the need for oral hearing. On 11 February 2016 the Applicant advised that he consented and on 18 February 2016 the Respondent’s representative advised that the Respondent consented, however, requested that the Commission issue directions for the Respondent to file submissions in reply to the Applicant’s submissions for various reasons. The Applicant objected to the Respondent’s request to file submissions in reply. Ultimately on 22 February 2016 I directed the Respondent to file and serve any submissions in reply by 5.00pm on Monday 29 February 2016. On 1 March 2016 the Applicant requested that the Commission issue directions for the Applicant to file submissions in reply to the Respondent’s submissions in reply for various reasons. Ultimately, my associate advised the parties that I had determined not to issue directions for the Applicant to file submissions in reply to the Respondent’s submissions in reply and noted that both parties consented to the costs application being heard on the papers.

Submissions of the Respondent

[23] The Respondent’s submissions set out the history of the matter which was broadly consistent with the chronology set out above and there is no need to repeat submissions already canvassed.

[24] The Respondent’s submissions acknowledge the understanding of the Respondent that it was not mandatory to attend the conference, however, that it was “reasonable and necessary for the Respondent to attend” for the following reasons:

“(a) to identify the alleged “adverse action” which enlivened the jurisdiction under s372
(and/or the General Protections provisions of the FW Act) (since it was not readily
apparent in the Application); and

(b) to avoid the matter proceeding to the Federal Court or Federal Circuit Court,
without first attempting to identify the factual and jurisdictional basis of the
Application.  3

[25] The Respondent’s submission set out a range of other events beyond the point on 18 December 2015, the date on which the Applicant advised he would not be continuing his application and the Respondent filed its application for costs. These events are not relevant to the consideration as they occurred after the Commission had finished dealing with the dispute. Consequently, I have not had regard to them.

[26] Relevantly, the Respondent submitted that:

• The Proceeding was instituted by the Applicant “vexatiously” and/or “without reasonable cause” and/or in circumstances in which it should have been reasonably apparent to the Applicant that the Proceeding “had no reasonable prospects of success”;



• The Proceeding was so obviously untenable that it could not possibly succeed and was “manifestly groundless”; and



• The Applicant caused the Respondent to incur costs because of an “unreasonable act or omission” in connection with the conduct or continuation of the proceeding.  4

[27] The Respondent made particular submissions directed at the Applicant personally as an Australian legal Practitioner. A copy of the Applicant’s LinkedIn profile was attached to the submissions which the Respondent submitted was publically available. The Respondent goes on to submit the following:

“6.3 Further, or in addition to paragraph 6.1 above, as to whether or not any act or omission by the Applicant, in connection with the conduct or continuation of the Proceeding, constitutes an unreasonable act or omission, the Respondent submits that, as an Australian Legal Practitioner, the Applicant:

(c) had the skills and capacity to identify the correct application to be filed with the Commission under the FW Act;

(d) had the skills and capacity to understand whether or not, upon receipt of the Notice of Listing, he would be required to attend the conciliation conference in-person (or at least to have made reasonable enquires regarding same);

(e) had the skills and capacity to identify the appropriate jurisdiction, authorities or bodies in Australia charged with handling complaints regarding unpaid wages, entitlements and superannuation;

(f) had the capacity to read and understand the both the content and implications of the First Offer, the First Letter, the Second Offer and the Second Letter and further, the Applicant should have exercised caution prior to notifying the Commission that the parties had agreed on terms of settlement and before attempting to file a Notice of Discontinuance;

(g) had the skills and capacity to determine if the Jurisdictional Objection had any reasonable basis (which it not) [sic];

(h) had the skills and capacity to read and understand the FW Act; and

(i) had the skills and capacity to understand basic legal concepts and terms, yet consistently engaged in conduct, throughout the Proceeding, that was unreasonable having regard to his skills and capacity and which put the Respondent to considerable cost and expense.” 5

Submissions of the Applicant

[28] The Applicant’s submissions also canvass the history of the proceedings. In general they accord with the history set out above as follows:

• The Applicant submits that the letter of 3 December 2015 from LSL Lawyers was to “subvert the role of the Commission in conducting the conciliation conference”.



• That he attended the conciliation conference by phone because he was in Sydney and he assumed he could call into the conference.



• That the Respondent was a capable legal professional and ought not to have engaged the solicitor.



• That the solicitor had unreasonably delayed proceedings and had missed other deadlines and costs should not be awarded for that reason.



• That adverse action can include steps taken or things done or threatened to be done by an employer in the course of an investigation or disciplinary proceedings against an employee.



• Legislative policy intends to protect parties to proceedings from orders for costs, so that parties with a genuine grievance do not abandon seeking a remedy due to fear.

The law to be applied

[29] The Respondent’s application for costs is made on the basis of s. 611(2)(a) and (b) and/or s. 375B of the Act. S. 375B of the Act sets out the requirements for the making of cost orders against parties:

“375B Costs orders against parties

(1) The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:
(a) an application for the FWC to deal with the dispute has been made under section 365; and
(b) 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 dispute.

(2) The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.

(3) This section does not limit the FWC’s power to order costs under section 611.”

[30] Section 611 of the Act sets out the making of cost orders generally:

“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).”

[31] Neither party has referred me to any costs orders granted by the Commission arising from s.372 applications. His Honour Vice President Catanzariti in the matter of Janet Holmesby v Strathavon Resort Pty Ltd T/A Strathavon Accommodation Home (Holmesby)  6 dealt with a costs application in a s. 372 matter. His Honour made the following observations as to the relevant law in considering a cost application under the relevant provisions of the Act:

“[26]In E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810 (Eastern Health), the Full Bench made the following observations concerning the operation of s.611 of the Act;

“[26] Section 611 sets out a general rule - that a person must bear their own costs in relation to a matter before the Commission (s.611(1)) - and then provides an exception to that general rule in certain limited circumstances. The Explanatory Memorandum confirms this interpretation of the section, it is in the following terms:

2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.

2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.

2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.

2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.”

[27] The Full Bench in Eastern Health defined what constituted a vexatious application in the following manner:

“[29] The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose ....is to harass or embarrass the other party, or to gain a collateral advantage’.”

[28] The Full Bench in Eastern Health relied upon the meaning given to the phrase “without reasonable cause” expressed by Gibb J in R v Moore; Ex Parte Miscellaneous Workers Union of Australia (1978) 140 CLR 470 at 473 where he stated;

“In my opinion a party cannot be said to have commenced a proceeding “without reasonable cause”, within the meaning of that section, simply because his argument proves unsuccessful.”

[29] In ReJoseph Michael Kanan v Australian Postal and Telecommunications Union [1992] FCA 366, Wilcox J gave further meaning to the expression ‘without reasonable cause’ in the following manner:

“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.”

[30] The Full Bench in Eastern Health made it clear that an award of costs should only granted in limited circumstances, given that the established position is that parties bear their own costs.

[31] In summary, the authorities demonstrate that as a general rule, each party must bear their own costs in proceedings before the Commission, indeed that is what s.611(1) provides. The power to award costs is to be exercised with caution and only in a clear case. A proceeding will be considered to have been instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.

[32] The approach to be taken to the meaning of “without reasonable cause” and whether it should have been reasonably apparent a proceeding had no reasonable prospect of success has recently been discussed in the Full Bench decision in Neil Keep v Performance Automobiles Pty Ltd in relation to a s.365 consent arbitration matter. The Full Bench stated that the Commission should exercise caution before arriving at the conclusion that an application had “no reasonable prospects of success.” The Full Bench decision in G.H. Deane v Paper Australia Pty Ltd was referred to where the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996:

“unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available”.”

[32] I will apply these principles as relevant in determining the matter.

Consideration

[33] The application in this matter is made pursuant to both s.611 and s.375B. The terms of s.375B are clear in as much as they specify that they can be invoked if an application for the Commission to deal with the dispute has been made under section 365. In this case, the application was clearly made under s.372 of the Act, not s.365. It follows that there is no basis to consider a costs application under s.375B. It is not clear why the Respondent has applied under this section when it clearly has no relevance to this matter. However, s.611 is clearly relevant to the matter to be determined.

[34] I will deal firstly with whether the application was made vexatiously or without reasonable cause. It is clear from the materials that there was a dispute over the rights of the Applicant to take personal and carers leave; an investigation process followed leading to allegations being made about the Applicants conduct. The Applicant was stood down and ultimately resigned. The Applicant sought to amend his application during the conference to say he was constructively dismissed. The Applicant claims that he was not correctly paid his entitlements. There are a large number of factual matters in dispute. The Applicant sought a remedy of “Adverse Action Orders”. The Respondent made much of the fact that the Applicant sought this as a remedy and I agree it is not clear what is meant by it. However, considering the application in total, there is nothing to suggest an intention to annoy or embarrass the Respondent. Nor is there anything to suggest that the application was untenable or manifestly groundless. There is nothing to indicate that the motive for the Applicant in lodging his application was other than for the reasons stated in his application. The Applicant advised that he would not be continuing his application after the Respondent provided the agreed reconciliation documents indicating he would pursue the matter in other jurisdictions. As His Honour noted in Holmesby a withdrawal of an application can be the outcome of a successful conciliation. 7

[35] Considering whether the application was brought for a collateral purpose, it is clear that a claim for correct payment of entitlements formed part of the application. The Respondent asserts that it appears that the application was made to seek a review of his entitlements. However, it is clear there is more to the application made than just this factor, including the disputed carers leave and associated claims of harassment, coercion and bullying. I am not satisfied that the application was brought for a collateral purpose. Overall, I am not satisfied that the Applicant’s case was one initiated “vexatiously or without reasonable cause” within the meaning of s.611(2)(a) of the Act. Therefore, the criteria for an application for costs under s.611(2)(a) has not been demonstrated.

[36] Considering s.611(2)(b) of the Act, whether it should have been reasonably apparent to the Applicant that the application had no reasonable prospects of success. As noted above, on the day of the conference, the Applicant claimed that the termination of employment was by way of constructive dismissal. The Respondent disputes that there was a constructive dismissal. In circumstances where the Applicant asserts he is dismissed then an application could have been made under s.365. This means that the application before me had no reasonable prospects in that it cannot be made given the factual circumstances now asserted by the Applicant. However, the Applicant did not hold to the view he was constructively dismissed at the time he made the s.372 application. At the time he made that application, there is no apparent basis for a finding that it had no reasonable prospects. Against a background where the Applicant, while legally qualified, appears to have little knowledge of workplace relations law, I am not satisfied that it should have been reasonably apparent to the Applicant that the application had no reasonable prospects of success.

Conclusion

[37] As His Honour noted in Holmesby, the Commission’s role in General Protection applications is to deal with a dispute by mediation or by making a recommendation or expressing an opinion. The Commission has no determinative powers in respect of the merits of a s.372 General Protections claim, although it must advise the parties if it believes there are no reasonable prospects of success. In the case of a s.372 application, the Respondent is not required to attend a conciliation/mediation conference and no certificate from the Commission is required before the Applicant can make a General Protections court application.

[38] The Respondent has at all relevant times held to a view that the application was groundless. As such, it could have saved itself from further costs by refusing to participate in the Commission conference. They understood participation was voluntary. The Respondent contends that they only attended for a particular purpose, particularly when it is evident, that irrespective of their intent, they decided it was in the interests of their client to participate in the conference and ultimately make an offer to the Applicant as part of the agreement to reconcile the wages and conditions. That offer was not accepted and the proceedings were discontinued.

[39] Section 375B has no relevance to this application and should not have been relied on in these proceedings. For the reasons set out above, I am not satisfied that the circumstances contemplated in s.611 (2) are present.

[40] The application for costs is dismissed.

COMMISSIONER

Final written submissions:

29 February 2016

 1   Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016, Annexure 4

 2   Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016, Annexure 3

 3   Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016, [3.15 (a) – (b)]

 4   Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016, [6.1 (a), 6.1 (a) (ii), 6.1 (b)]

 5   Respondent’s Outline of Submissions Regarding Application for Costs filed 21 January 2016, [6.3]

 6   [2015] FWC 2754

 7   [2015] FWC 2754 [35]

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