Sarah Wintle v Foothills Administration Centre Pty Ltd T/A Jim's Group

[2013] FWC 9407

[2013] FWC 9407

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sarah Wintle
v
Foothills Administration Centre Pty Ltd T/A Jim’s Group
(U2013/1249)

COMMISSIONER BISSETT MELBOURNE, 6 DECEMBER 2013

Application for costs.

[1] On 7 October 2013, after hearing argument from the parties, I issued a decision ex tempore in which I dismissed an application for relief from unfair dismissal by Ms Sarah Wintle (the Applicant) against her employer, Foothills Administration Centre Pty Ltd T/A Jim’s Group (the Respondent).

[2] The Respondent has now made an application for costs pursuant to s.400A and s.611 of the Fair Work Act 2009 (the Act).

[3] On receipt of the application or costs I issued directions for the filing of written submissions by the parties. The Respondent relied on the material it had filed with its application for costs, the Applicant was required to file her material in reply by 15 November 2013 and the Respondent was to file any reply material by 22 November 2013. A copy of the relevant provisions of the Act (s.400A and s.611) were attached to the directions.

[4] No material was received from the Applicant by the due date. I therefore had my associate send an email to the Applicant in which she was asked to advise if she wished to make or had made submissions on the matter. Further she was advised that if no reply was received from her by 25 November 2013 the Commissioner would make a decision on the basis of the material filed. No response was received from the Applicant.

[5] Given the lack of attention to this matter by the Applicant I have made the following decision on the basis of the material filed by the Respondent.

Section 400A - unreasonable acts or omissions

[6] Section 400A states:

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.

[7] The Respondent submits that the Applicant has caused costs to be incurred by the Respondent because of an unreasonable act or omission.

[8] In particular the Respondent submits that:

• The Applicant failed to attend two conciliation sessions without notice, causing the Respondent to incur costs in preparing for two conciliation conferences that did not occur;



• The Applicant failed to comply with directions of the Fair Work Commission causing the Respondent to incur costs in preparing for and attending a non-compliance hearing;



• The Applicant failed to respond to correspondence from the Respondent causing the Respondent to incur costs.

[9] The Respondent submits that, if the Applicant had attended the conciliation and/or attended to the correspondence of the Respondent she would have ‘been left in no doubt as to the likely outcome of the arbitrated hearing and could have withdrawn her application...’. 1

Consideration

[10] I note that s.400A is not about whether the Respondent unreasonably incurred costs but whether it incurred costs because of an unreasonable act or omission of the Applicant.

[11] Section 400A was inserted into the Act by virtue of Fair Work Amendment Act 2012. The concept of an ‘unreasonable act or omission’ in relation to a costs order has been in the Act since it came into effect in 2009 – albeit only in relation to lawyers and paid agents (see s.401(1)(b) of the Act as originally enacted) with s.401 reading as it does today by virtue of the Fair Work Amendment Act 2012. The ability to make a costs order where costs were incurred by an unreasonable act or omission of a party to the matter was included in the Workplace Relations Act 1996 by virtue of the Workplace Relations Amendment (WorkChoices) Act 2005.

[12] In Construction, Forestry, Mining and Energy Union v Benegalla Mining Company Pty Limited (No 2) 2 Katzman J found:

1. Before this amendment a costs order could only be made in a matter arising under the Act (and its predecessors) if the proceeding had been brought vexatiously or without reasonable cause. The Explanatory Memorandum to the Work Choices Bill provides little guidance on the proper approach to deciding whether an act or omission is unreasonable. It notes (in cl 2643) that a costs order under the subsection (initially s 347(1A)) can be made irrespective of the outcome of the proceeding. It provides an “illustrative example” of parties who continually disregarded the court’s directions by filing documents late and continually raised frivolous arguments during the proceedings. I see no reason, however, why the Court’s power should be limited to circumstances of this kind. Young J expressed a similar opinion in Paras v Public Service Body Head of the Department of Infrastructure(No 3) [2006] FCA 745; (2006) 152 FCR 534. The section refers to “an unreasonable act or omission”, not to a course of conduct.

1. “Unreasonable” can mean several things. The Macquarie Dictionary definition is:

1. not reasonable; not endowed with reason.

2. not guided by reason or good sense.

3. not agreeable to or willing to listen to reason.

4. not based on or in accordance with reason or sound judgement.

5. exceeding the bounds of reason; immoderate; exorbitant.

1. It seems to me that if the union’s conduct can be characterised as not endowed or guided by reason or good sense, or not based on or in accordance with reason or sound judgment, it would be unreasonable within the meaning of s 570. While the Court should not rush to the conclusion that a costs order should be made, neither should it baulk at the prospect if the circumstances warrant it. No party should assume that any old allegation may be made in proceedings arising under the FW Act because it is unlikely to be penalised in costs.

1. Certainly, the mere fact that the union made allegations of wrongdoing which it later failed to pursue does not mean that its actions were unreasonable. But this case does not simply concern the making of allegations which were not pressed. There was in my view no proper foundation for making the allegations in question in the first place or in pursuing them until the heel of the hunt, especially when the folly of doing so was exposed by the evidence Bengalla had served.

[13] The Explanatory Memorandum to the Fair Work Amendment Bill 2012 says of s.400A:

[169] ...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.

...

[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.

[14] The provisions of s.400A need to be read in the general context of costs matters provided for in the Act. Section 611 of the Act states that a ‘person must bear the person’s own costs in relation to a matter before the FWC.’ Whilst section 400A and s.587 allow for costs orders to be made the starting point for any consideration of an award of costs must be that each party bears its own costs.

[15] The Respondent’s claim for costs under s.400A is based on three matters.

[16] With respect to non-attendance at the conciliation conference I note that in her material filed with respect to her original application on 20 August 2013 the Applicant indicated that she had advised the Commission on each occasion that she was unable to participate in a telephone conference during working hours as she had another job. She says that this advice was provided by email at about 7.00am in the morning. Whilst the Respondent has this correspondence it has not addressed the claim in its submissions as to costs. A view of the Commission’s file indicates that, with respect to the conciliation conference scheduled for 17 May 2013 the Applicant did contact the Commission that morning and advise she could not attend. She asked that the matter be rescheduled. This was agreed to and the file indicates the Respondent was to be advised over the phone and received a notice of listing cancellation. There is no indication on the file that the Applicant provided similar advice with respect to the conciliation scheduled for 20 May 2013.

[17] The second matter the Respondent relies on for its costs is the failure of the Applicant to file material in accordance with directions causing the Respondent to attend a non-compliance hearing. I note that at that non-compliance hearing the Respondent made an application pursuant to s.399A of the Act that the matter be dismissed for failure to comply with directions of the Commission. Ultimately the Respondent withdrew that application.

[18] I note from the file that the non-compliance hearing went for four minutes. Arising from this hearing and the decision of the Gooley DP the Applicant indicated that she wished to pursue her application. She did comply with the subsequent directions issued by the Commission in regards to her unfair dismissal application.

[19] The third matter goes to the Applicant failing to respond to some correspondence from the Respondent. It is not clear from the Respondent’s submission what this correspondence was. It is not possible therefore for me to determine if this act was unreasonable.

[20] The acts complained of by the Respondent such that I should award costs because of some ‘unreasonable act or omission’ of the Applicant appear to be more in the nature of a lack of awareness, rather than a deliberate flouting, of the requirements of the Commission by the Applicant. When made aware that the matter would need to be brought to a conclusion either by her continuing her application or by it being dismissed I am content that the Applicant then took steps to comply. She may have been tardy and perhaps not as mindful as she should have been of the process she had set in train by her application. Her acts, whilst clearly annoying and inconvenient, were not unreasonable. I am not convinced that the Applicant’s conduct meets the test of ‘unreasonableness’ as defined in the decision above.

[21] Even if the acts of the Applicant were unreasonable I do not consider them to be of such a scale that the normal course of each party bearing its own costs should be disturbed in this instance. Further, the decision to award costs is discretionary even if the necessary conditions are met. Were the conditions met to award costs in this case I would exercise my discretion not to do so.

Section 611 application

Section 611 of the Act states:

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).

[22] The Respondent says that the Applicant acted vexatiously and without reasonable cause. It says that at the time of making her application the Applicant should have been aware that it was ‘doomed to failure’, that the Applicant was not relying on the Commission to determine one or more arguable points of law, and that, on receipt of the Respondent’s material the Applicant should have been aware that her application had no reasonable prospect of success.

Consideration

[23] In determining if an application has been made vexatiously it is the motive of the Applicant in instigating the proceedings which is relevant.

[24] An application may be vexatious where:

• they are instituted with the intention of annoying or embarrassing the person against whom they are brought;



• they are brought for collateral purposes, and not for the purpose of having the Court adjudicate on the issues to which they give rise;



• irrespective of the motive of the applicant, they are so obviously untenable or manifestly groundless as to be utterly hopeless. 3

[25] I am not inclined to a view that the Applicant instigated the proceedings for the purpose of annoying or embarrassing the Respondent, nor that the Applicant had any collateral purpose in instigating the application. I am satisfied that the Applicant thought that, having produced a statutory declaration for her absence on 13 March 2013, she was providing evidence necessary for her absence. This was a position the Applicant took at the time of lodging her application and was the central theme of the material she filed in support of her application. There was no evidence in the substantive proceedings of any other motive for her application. As I said in my decision:

The statutory declaration wording suggests that the applicant may be of the view that she can be absent from work for any reason and that as long as she produces a statutory declaration she is immune from any disciplinary action the respondent may wish to take... 4

[26] For these reason I reject that the application was made vexatiously. I am satisfied that

The question of what constitutes ‘without reasonable cause’ was considered by Justice Wilcox in Kanan v Australian Postal and Telecommunications Union 5 who said:

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 it appears that, 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.

[27] As I have said above the Applicant, in instituting these proceedings, believed that she had produced the evidence necessary for the leave she had taken. She was wrong about this but that does not mean the application was made without reasonable cause. On the Applicant’s version of events it was not clear that the application must fail. The Respondent’s view that the Applicant’s case could not succeed is based on its knowledge and view of the circumstances surrounding the leave taken by the Applicant, but it is not the Respondent’s view that is the test to be applied.

[28] For this reason I am not satisfied that the Applicant commenced proceedings without reasonable cause. No costs order should be made.

Conclusion

[29] I have found above that the Applicant did not cause costs to be incurred by the Respondent because of an unreasonable act or omission on her part. Even if there was an unreasonable act or omission it was open to the Respondent to proceed with its s.399A application if it so chose. It did not and withdrew that application.

[30] I have also found above that the application was not made vexatiously or without reasonable cause. The application may well have been misguided but this does not mean it is vexatious or without reasonable clause.

[31] For this reasons I decline to award costs.

[32] The application for costs is dismissed. An order to this effect will issue in conjunction with this decision.

COMMISSIONER

Final written submissions:

Respondent, 18 October 2013.

 1 Respondent Submission [28].

 2 [2013] FCA 362.

 3   Attorney-General v Wentworth (1988) NSWLR 481.

 4   Transcript PN319.

 5 (1992) 43 IR 257, 264-5; [1992] FCA 366 [29].

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