Reece Storme Ferrara v Medical Rescue Pty Ltd
[2021] FWC 6523
•6 DECEMBER 2021
| [2021] FWC 6523 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Reece Storme Ferrara
v
Medical Rescue Pty Ltd; 24-7 Assistance Pty Ltd
(C2021/3009)
| COMMISSIONER MCKINNON | MELBOURNE, 6 DECEMBER 2021 |
Application for costs – general protections application involving dismissal.
On 10 August 2021, I dismissed a general protections application made under section 365 of the Fair Work Act 2009 (Act) by Reece Ferrara (the Decision).[1] The application was made against 24-7 Assistance Pty Ltd and Medical Rescue Pty Ltd (together, Medical Rescue). It was unable to proceed because of my finding that Mr Ferrara had not been dismissed. Mr Ferrara applied for permission to appeal the Decision and permission was refused (the Appeal Decision).[2]
On 24 August 2021, Medical Rescue applied for costs against Mr Ferrara under section 375B of the Act. The application was not made in accordance with the procedural rules. I waived compliance with the rules at the hearing of the application on 2 December 2021.
In summary, Medical Rescue seeks costs against Mr Ferrara for six reasons:
The application made by Mr Ferrara in matter C2021/3009 had no reasonable prospect of success. This was explained to Mr Ferrara during conciliation on 16 June 2021 and in writing on 8 July 2021.
Mr Ferrara made an unreasonable monetary offer to settle the claim and did not accept Medical Rescue’s counter-offer of a statement of employment and undertaking not to seek costs against him.
Mr Ferrara’s application was unsuccessful.
Mr Ferrara’s appeal of the decision at first instance was unsuccessful.
Mr Ferrara has separately commenced vexatious processes with 6 other federal and state agencies as well as foreshadowing a report to the Law Society about the lawyers for Medical Rescue. Mr Ferrara has no regard for the significant cost and time involved in responding to this matter and those.
Mr Ferrara has been involved in unrelated matters with his previous employers.
On 18 November 2021, Mr Ferrara responded to the costs application. The response includes a counter‑claim for costs against Medical Rescue for two reasons:
Medical Rescue’s deceit, withholding of information in connection with the hearing of the jurisdictional objection and victimisation.
Medical Rescue’s failure to communicate directly with him in the course of the proceeding meant that he had to engage legal representatives to assist.
Relevant legal principles
Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are exceptions to this rule, including those found in sections 375B and 611(2) of the Act. A decision to order costs is discretionary and the discretion can only be exercised if the conditions for making a costs order are met.
Section 375B permits an order for costs to be made against a party to a dispute under section 365 of the Act if I am satisfied that the party caused another party to incur costs because of their unreasonable act or omission in connection with the conduct or continuation of the dispute. An order for costs under section 375B may only be made on application by a party to the dispute in accordance with section 377, which requires the application to be made within 14 days after the Commission finishes dealing with the dispute. Each of the pre‑conditions for an order for costs under section 375B have been met in this case.
Section 611(2) provides another exception to the general rule. Under section 611(2), the Commission may order a person to bear some or all of another person’s costs in relation to an application to the Commission if satisfied either that:
611(2)(a): The person made or responded to an application vexatiously or without reasonable cause, or
611(2)(b): It should have been reasonably apparent to the person that their application or response had no reasonable prospects of success.
Principles governing section 611(2) were discussed in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing[3] and are relevantly summarised as follows:
· 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 it failed.
· 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.
· An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, or is manifestly groundless, or discloses a case where the tribunal is satisfied it cannot succeed.
Principles relevant to the interpretation of s.611(2)(b) were further considered by a Full Bench of the Commission in Baker v Salva Resources Pty Ltd[4] as follows (footnotes omitted):
“[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.”
Mr Ferrara’s application for costs
It is convenient to deal firstly with Mr Ferrara’s application for costs, which was made under section 375B. The application was not made in accordance with the procedural rules because it was not made using the prescribed Form F6. I waive compliance with the rules in this respect. However, there is a more fundamental problem with the application. As noted above, an application for costs under section 375B of the Act must be made within 14 days after the Commission finishes dealing with the dispute. I finished dealing with the dispute under section 365 of the Act when the Decision was issued on 10 August 2021. Under section 375B, it was necessary for Mr Ferrara to apply for costs, if he wished to do so, by 24 August 2021. Mr Ferrara’s application for costs was made on 18 November 2021, well outside the 14-day timeframe.
It makes no difference to the outcome if I am wrong about when the Commission ‘finished dealing’ with the dispute and the time instead runs from the date of the Appeal Decision on 22 October 2021. In this scenario, the last day to apply for costs was 5 November 2021. As noted above, the application was made on 18 November 2021. It follows that the application was not made in accordance with section 377 and I cannot order costs as sought by Mr Ferrara under section 375B of the Act.
Medical Rescue’s application for costs
The application for costs made by Medical Rescue is also made under section 375B. The question is whether I am satisfied that Mr Ferrara caused Medical Rescue to incur costs because of his unreasonable act or omission in connection with the conduct or continuation of the dispute under section 365.
The grounds relied upon by Medical Rescue are not persuasive. Firstly, I do not accept that Mr Ferrara’s application had no reasonable prospects of success. I agree that it was made clear to Mr Ferrara that he was engaged by Medical Rescue on a fixed term contract of employment. Ordinarily, this would mean that there was no dismissal for the purposes of the Act when the contract came to an end. However, Mr Ferrara’s case turned on whether, despite his fixed term contract of employment, the parties had agreed to vary the contract to full-time, ongoing employment. It turned on findings of fact about conversations between them. The case was arguable both in that respect and in relation to whether adverse action was taken against Mr Ferrara for a prohibited reason.
Medical Rescue’s denial of the claim, and its advice to Mr Ferrara that his case had no reasonable prospects of success, does not change the position. It was in Medical Rescue’s interests to seek to persuade Mr Ferrara that his claim could not succeed, whether correctly or otherwise. Mr Ferrara saw things differently, and there was a dispute about the facts. I accept that Mr Ferrara did not agree with his barrister’s legal opinion that he had not been dismissed. However, I do not have the legal opinion or the materials upon which it was based and cannot know what facts were relied upon to reach that conclusion. A case may have prospects even if it is not a certainty, and the fact that Mr Ferrara’s case ultimately failed does not mean that it was so manifestly untenable or groundless or so lacking in merit or substance that it was not reasonably arguable.
I am also not satisfied that Mr Ferrara unreasonably failed to settle the matter. It seems to me that both parties adopted early and relatively intractable positions that prevented any reasonable prospect of settlement. This was regrettable, including because it exposed both parties to unnecessary legal costs. Responsibility for this lies equally at the feet of Medical Rescue and Mr Ferrara.
The separate processes and complaints made by Mr Ferrara are not relevant to the question of costs in the conduct of, or continuation of, the application in C2021/3009 and, if it were necessary to take into account, the related appeal. Mr Ferrara is entitled to report the conduct of a lawyer to the relevant law society if he wishes. That is a matter between Mr Ferrara and the law firm and has no bearing on costs incurred in this matter. It is equally irrelevant to the application for costs that Mr Ferrara may have been involved in other matters with his previous employers.
Overall, I am not satisfied of any unreasonable act or omission by Mr Ferrara in connection with the conduct or continuation of the dispute under section 365 that would warrant an order for costs being made against him.
Should costs be ordered under section 611?
I have separately considered whether to exercise the discretion to order costs against either party, or both, under section 611(2).
I do not accept that Mr Ferrara’s application was made vexatiously or that Medical Rescue acted vexatiously in responding to the application. Mr Ferrara made his application because he genuinely felt, and still feels, aggrieved by what he believes was unfair and unreasonable treatment by Medical Rescue. These concerns are not without any apparent foundation. Medical Rescue strongly disagrees with Mr Ferrara’s version of events and its response to the application was both to object and to do so robustly. While not conducive to the mutual resolution of the dispute, this was a course open to Medical Rescue and there is no basis to find that it had a purpose to harass or embarrass Mr Ferrara or to gain any collateral advantage separate to the legitimate pursuit of its defence.
For the reasons discussed above, I am also not satisfied that it should have been reasonably apparent to Mr Ferrara that his claim had no reasonable prospects of success. The Decision turned on my findings on the evidence before me. Mr Ferrara’s case was at least arguable in relation to whether, despite his fixed term contract of employment with Medical Rescue, the parties had agreed to vary the contract to provide for ongoing employment. It was also arguable in relation to whether adverse action was taken against Mr Ferrara for a prohibited reason. Mr Ferrara’s case was not strong, but it was not so devoid of merit that it must fail. It was not made without reasonable cause.
Disposition
Mr Ferrara’s application for costs under section 375B cannot succeed and is dismissed.
Medical Rescue’s application for costs under section 375B is dismissed.
No order for costs is made under section 611(2) of the Act.
COMMISSIONER
Appearances:
M Smith for Medical Rescue Pty Ltd; 24-7 Assistance Pty Ltd.
R Ferrara for himself.
Hearing details:
2021.
Melbourne (by video):
December 2.
<PR736477>
[1] Ferrara v Medical Rescue Pty Ltd; 24-7 Assistance Pty Ltd [2021] FWC 4913.
[2] Ferrara v Medical Rescue Pty Ltd, 24-7 Assistance Pty Ltd t/a Medical Rescue [2021] FWCFB 6014.
[3] [2014] FWCFB 810 at [23]-[33].
[4] [2011] FWAFB 4014; (2011) IR 174.
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