Retic Water Pty Ltd v Alan Petersen

[2016] FWC 4808

[2016] FWC 4808

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Retic Water Pty Ltd
v
Alan Petersen
(U2015/14925)

COMMISSIONER WILSON MELBOURNE, 19 JULY 2016

Application for costs orders against party involved in an application for an Unfair Dismissal Remedy.

INTRODUCTION

[1] A decision dismissing Alan Petersen’s application for an unfair dismissal remedy was published on 2 May 2016. 1 Subsequent to the decision, the Respondent in that matter, Retic Water Pty Ltd, made an application to the Fair Work Commission for an order for costs pursuant to s.400A of the Fair Work Act 2009 (the Act) against Mr Petersen. This decision concerns that costs application.

[2] As stated above, Mr Petersen’s application for unfair dismissal was dismissed by me, upon application by Retic Water, pursuant to s.399A of the Act, because I was satisfied that Mr Petersen had unreasonably failed to attend a hearing of the Fair Work Commission in relation to his application. The decision which sets out the reasons for dismissal of Mr Petersen’s application is referred to as the Dismissal Decision.

[3] Having received the application for costs, the Commission issued directions for the provision of written submissions from both parties and proposed to them that the matter would be determined by me on the papers, unless either party requested a hearing. Neither party requested a hearing. A perusal of the submissions does not indicate that the question now before me involves disputed fact and so I am of the opinion that I am not required, because of s.397 of the Act, to conduct a conference or hearing in relation to the matter. The costs application has, therefore, been determined by me on the papers.

[4] For the reasons set out below, I decline to exercise my discretion to make a costs order against Mr Petersen.

BACKGROUND TO THE COSTS APPLICATION

[5] On 10 November 2015 Alan Petersen made an application for unfair dismissal remedy under section 394 of the Act. Mr Petersen’s employment was terminated by Retic Water on 28 October 2015 for alleged serious misconduct. Prior to dismissal, Mr Petersen had been employed by Retic Water as its Plant Manager, at Echuca, Victoria.

[6] The matter was the subject of conciliation on 9 December 2015, however the matter was not resolved, including for the reason that Retic Water contested the Commission’s jurisdiction to deal with the application on the grounds that Mr Petersen was not a person protected from unfair dismissal remedy. In particular, it was argued by Retic Water that the Applicant was not covered by a modern award; that an enterprise agreement did not apply to him; and that Mr Petersen’s earnings exceeded the high income threshold.

[7] The matter progressed with a hearing being listed for Friday, 22 January 2016. Late on 21 January 2016, Mr Petersen’s solicitors, Petherick Cottrell Lawyers, sought an adjournment, which was granted, with the Dismissal Decision recording the following about the circumstances in which the adjournment was granted;

“[8] Because of the time the above was sent, and having been emailed to the Unfair Dismissal Case Management Team, it was not seen by me until 22 January 2016, the day on which the hearing was listed. Correspondence from the Respondent’s solicitors sent at about the same time, and to the same email address, advised the Respondent did not object to the matter being adjourned.

[9] The Commission as presently constituted, upon being appraised of the request, initially indicated a disinclination to accede to the Applicant’s adjournment request, joined, as it was, by the Respondent. Endeavours were made in the course of the morning of Friday, 22 January 2016 to contact the Applicant’s solicitors, seeking a commitment to attend a listed hearing. No contact with a person in charge of the file from the Applicant’s solicitors was able to be had, and so the Commission determined the matter should be adjourned.

[10] The matter was relisted for hearing on 19 February 2016, and Directions were issued to the parties on 27 January 2016 for the compilation of an Agreed Statement of Facts.”

[8] The matter was then part-heard by me on 19 February 2016. Because the matter was not finished, it was adjourned to a date to be fixed after consideration of the views the parties wished to put forward about their availability. In finality, the Commission listed the resumption of the matter for 8 March 2016.

[9] On Monday, 7 March 2016, Petherick Cottrell Lawyers, solicitors for Mr Petersen, sought an adjournment to the listing, to which Retic Water agreed. Because of the lateness of the application it was not seen by me until Tuesday, 8 March 2016. The application was refused and the parties were directed that the matter would proceed as listed.

[10] When the hearing commenced through a video conference between Melbourne and Perth, neither Mr Petersen nor Petherick Cottrell Lawyers attended, whereas Counsel for Retic Water attended in Melbourne. In that hearing, Retic Water made an application for dismissal of Mr Petersen’s unfair dismissal application pursuant to the provisions of s.399A of the Act.

[11] After notice was given to Mr Petersen of the application and an opportunity provided to file material for the Commission to be taken into account, Retic Water’s application for dismissal of the substantive unfair dismissal application made by Mr Petersen was granted on 2 May 2016.

[12] Retic Water’s application for costs was made on 16 May 2016 and seeks costs pursuant to the provisions of s.400A of the Act on three grounds. Firstly, “because of an unreasonable act or omission of Petersen in connection with the conduct or continuation of the matter”, being his failure to attend the hearing on 8 March 2016. Retic Water’s costs application also puts forward that an order for costs should be made for reason that he failed to discontinue his application after 8 January 2016 despite the nature and force of Retic Water’s jurisdictional objections, going to the claim that he was not a person protected from unfair dismissal remedy for reason of not being covered by modern award or enterprise agreement and that his earnings exceeded the high income threshold. Finally, Retic Water claim costs for reason of Mr Petersen’s continuation of his application after the part-heard hearing conducted on 19 February 2016.

LEGISLATION

[13] Section 400A of the Act provides as follows;

400A Costs orders against parties

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if the FWC is satisfied that the first party caused those costs to be incurred because of an unreasonable act or omission of the first party in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

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

[14] Relevantly, section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides;

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

CONSIDERATION

[15] Section 400A of the Act allows for costs orders to be made if the Fair Work Commission is satisfied that costs were incurred because of an unreasonable act or omission of a party in connection to the conduct of the case. The Commission’s power to award costs under this provision of the Act is discretionary. There is also a requisite causal link between the act or omission and the costs being incurred.

[16] The costs incurred and claimed by Retic Water are in respect of its costs incurred after 8 January 2016 and are advanced for the three grounds referred to above, namely;

• Mr Petersen’s failure to attend the hearing on 8 March 2016;



• His failure to discontinue his application after 8 January 2016 despite the nature and force of Retic Water’s jurisdictional objections; and



• Mr Petersen’s continuation of his application after the part-heard hearing conducted on 19 February 2016.

[17] In support of the first ground of its costs application, Retic Water submit that Mr Petersen's unreasonable failure to attend the hearing on 8 March 2016 was therefore an unreasonable act or omission of the kind contemplated by s.400A and that the Commission can be comfortably satisfied that this circumstance caused it to incur costs. Retic Water submit in relation to the second ground that Mr Petersen ought to have discontinued his application after the filing of the witness statements on behalf of Retic Water which should have led him to believe ”that his case, that his salary was below the relevant threshold, was very weak, with no reasonable prospects for success” 2. Finally, in relation to the third ground, Retic Water submit that the matters drawn out within the hearing conducted on 19 February 2016 ought to have lead Mr Petersen to the reasonable belief that maintenance of his application was without merit.

[18] Mr Petersen’s submissions in relation to costs restate much of the grounds submitted by them in the course of the proceedings considering dismissal of his application. In relation to Retic Water’s first ground, Mr Petersen “disagrees wholly with the merit” of the Dismissal Decision, and advances that the decision “was not in-line with the principles of s557” of the Act dealing with the principles of the Commission performing its functions and powers in a manner that is fair and just. In relation to the second and third ground, Mr Petersen does not demur from the position, originally put by him, of him being a person protected from unfair dismissal and his application therefore being within jurisdiction.

[19] To the extent that Mr Petersen disagrees with the Dismissal Decision, I place no weight on those submissions in making this decision. Mr Petersen’s disagreement with the reasoning of the Dismissal Decision is a matter for another forum.

[20] The first ground for the costs application is that Mr Petersen’s failure to attend the hearing on 8 March 2016 caused Retic Water to incur costs. I am satisfied that it was an unreasonable act or omission by him, in connection with the conduct or continuation of the matter, and that costs were incurred by Retic Water as a result.

[21] The second and third grounds of Retic Water’s costs application relate to whether or not Mr Petersen had reasonable prospects of success at two relevant points.

[22] The first of those points is 8 January 2016, the time at which materials were filed in the Commission by Retic Water. It is claimed in respect of that material that Mr Petersen ought to have known at that point that the strength of the jurisdictional argument made against him was such that his case had no reasonable prospects of success. The second point is after the evidence was led in the part-heard hearing on 19 February 2016, with it also being claimed that after the leading of that evidence Mr Petersen ought to have known that the weight of the jurisdictional argument against him meant that his own case had no reasonable prospect of success.

[23] After consideration of the material before the Commission in relation to the substantive matter, both in respect of the documents filed by each party as well as the evidence led on 19 February 2016, I am not satisfied that it ought reasonably have been known to Mr Petersen at that time that his case had no reasonable prospect of success. To the contrary, my reflection on material before the Commission to that point is that Mr Petersen’s prospects of success were above the level claimed by the Respondent. While I considered after hearing such oral evidence as was led that Retic Water’s evidence was likely to lead to the findings it sought, I had not heard Mr Petersen’s evidence (and still have not done so) and my belief at the time is that it was possible his evidence may provide a sufficient rebuttal. In all, his prospects might not have been strong, but they were above there being no reasonable prospect of success.

[24] Accordingly, I do not find in favour of Retic Water for its second and third grounds.

[25] As noted above, the making of a costs order under s.400A is a discretionary one.

[26] Since I have found that the basis of the first ground of the costs application is made out, I must now consider whether it is appropriate to make an order for costs. In doing so, I note the provisions of s.400A which allow for orders for costs incurred by one party if I am satisfied those costs were incurred because of an unreasonable act or omission of another party in connection with the conduct or continuation of the matter.

[27] In this matter, the unreasonable act or omission was Mr Petersen’s failure, and that of his solicitors, Petherick Cottrell Lawyers, to attend the Commission as directed. The scheduled hearing proceeded in their absence at which time Retic Water made its application to dismiss. Those proceedings lasted 3 minutes, with the transcript recording that the hearing commenced at 12:31 PM and that it concluded at 12:34 PM.

[28] The costs incurred because of the unreasonable conduct of Mr Petersen and Petherick Cottrell Lawyers therefore relate to Retic Water’s attendance before the Commission as directed, and the costs after that date, including the costs of making the s.399A application.

[29] In considering whether I exercise my discretion to make a costs order, I take into account that Mr Petersen’s application for an adjournment of the proceedings listed for 8 March 2016 was joined in by Retic Water.

[30] On Monday, 7 March 2016 at 8:51 PM, Mr Petersen’s solicitors, Petherick Cottrell Lawyers, forwarded correspondence to the Commission seeking the adjournment of the hearing otherwise listed for 8 March 2016.

[31] Retic Water’s solicitors, Redvers Read, forwarded an email to the Commission on Monday, 7 March 2016 at 9:19 PM advising their consent to the application for adjournment. When that advice was provided, it included the statement that “[w]hilst we appreciate the late stage of this request, to avoid wasting the Commission's time we would appreciate if the matter could be adjourned to allow the parties time to ascertain if settlement can be reached.”

[32] When the Commission had circulated a Notice of Listing, on 24 February 2016, it had included an explicit direction that the date would not be rescheduled and that any party seeking an adjournment may seek a Mention Hearing. Retic Water have not explained why it joined in the adjournment request. I consider that when it joined in the adjournment request, it was plainly prepared, for unknown reasons, to continue the matter, and to take the risk that settlement discussions failed, in which case the hearing would be brought back on.

[33] In all the circumstances I am not satisfied I should exercise my discretion.

[34] For these reasons I decline the costs application of Retic Water.

COMMISSIONER

 1   [2016] FWC 2203.

 2   Retic Water’s Outline of Submissions – Costs Application, 10 June 2016, [9].

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