Sebastiyan Banks v Select Insurance Brokers Pty Ltd

[2013] FWC 5406

[2013] FWC 5406

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sebastiyan Banks
v
Select Insurance Brokers Pty Ltd
(U2013/6963)

DEPUTY PRESIDENT BOOTH SYDNEY, 8 AUGUST 2013

Termination of employment - alleged unfair dismissal - extension of time - whether extenuating circumstances - costs - whether reasonable prospects of success.

[1] On 26 February 2013, Mr Sebastiyan Banks, also known as Sebastiyan Fajka, (the applicant), lodged an application with the Fair Work Commission (the Commission) pursuant to s.394 of the Fair Work Act 2009 (the Act) to grant a remedy for unfair dismissal from his employment with Select Insurance Brokers Pty Ltd (the respondent).

[2] The applicant claimed in his Form F2 “[o]n 12 February 2013 the General Manager Craig Humphreys simply verbally communicated to me that I was dismissed because of my poor work performance.” The respondent claimed in its Form F3 “[c]ontract was ended due to self-confessed cocaine habit, purchasing drugs in front of company Employees, damage to company property, (rented company vehicle). Period of contract commenced 2/10/2009 ended 4th September 2012”.

[3] Jurisdictional objections were made by the respondent relating to the application being out of time, the applicant not having being employed for the minimum employment period for a small business employer, the applicant not being an employee and the application being frivolous, vexatious or having no reasonable prospects of success.

[4] The matter came on for hearing before me on 31 May 2013 and I directed the parties to confine their submissions to the date the dismissal took effect. The applicant contended that the date the dismissal took effect was 12 February 2013 whereas the respondent contended that it was 4 September 2012. This was the subject of an ex tempore decision. I found that the date the dismissal took effect was 4 September 2012. That being the case the application is 161 days out of time. To be within time the applicant would have had to have lodged his application by 18 September 2012.

[5] The applicant now makes an application for an extension of time for lodgement of his application pursuant to s.394(2)(b) of the Act. The respondent opposes the application. This decision is confined to this application. The other jurisdictional objections made by the respondent have not yet been heard and are not addressed in this decision. The respondent has also made an application for costs and this application is addressed at the conclusion of this decision.

[6] The applicant was self represented and was supported in his advocacy by his brother, Mr Peter Fajka. Permission was granted for the respondent to be represented by Mr Mark Lazarus of counsel. Witness evidence was given for the respondent by Ms Margaret Friend, Sole Director and Shareholder of the respondent and Mr Craig Humphreys, General Manager of the respondent.

[7] In accordance with a timetable set down at the conclusion of the hearing on 31 May 2013, later amended at the request of the applicant, submissions in support of an extension of time were received from the applicant on 14 June 2013 and submissions in response were received from the respondent on 25 June 2013.

Background

[8] The respondent is an insurance broker selling insurance products to businesses from offices in Wetherill Park and Narellan in NSW.

[9] The applicant commenced employment with the respondent on or around 9 November 2009 as a part-time sales consultant on a casual basis based in Wetherill Park.

[10] From 1 January 2010 the respondent says that at his request the applicant began providing his services to the respondent as a contractor through his own company, International Financial Instruments Pty Ltd. I note that whether the applicant was an employee or contractor is not the subject of this decision.

[11] Throughout the period of his relationship with the respondent the applicant had been assisted financially by Ms Friend and she had supported him to obtain medical intervention concerning a substance addiction.

[12] The last payment made by the respondent to the applicant was on 24 August 2012.

[13] On 4 September 2012 Ms Friend asked the applicant to come to the Wetherill Park office to meet with her because of complaints made by employees of the respondent concerning his behaviour, including verbal abuse and the purchase of illegal substances whilst on duty. She terminated the relationship between the respondent and the applicant on this day, (in the presence of Mr Fradd, who was not required for cross-examination) and required him to perform no further work for the respondent from this day onwards.

[14] Abusive and crude text messages from the applicant to Ms Friend over the period 5 September 2012 onwards are consistent with the relationship having come to an end prior to that date.

[15] On or around 9 September 2012 the applicant commenced employment with Trans-West Insurance Brokers Pty Limited (Trans-West), a competitor of the respondent. The respondent was concerned that the applicant was seeking to obtain clients for Trans-West from amongst clients of the respondent who he had dealings with whilst working for them. The respondent initiated legal action to seek to prevent this.

[16] Written communication from the solicitor of Trans-West of 4 October 2012 refers to the termination of the relationship between the respondent and the applicant.

[17] Written communication between the respondent and a client on 5 October 2012 shows the client’s dissatisfaction with being approached by the applicant.

[18] On 8 January 2013 the applicant attended the Narellan office of the respondent and sought a meeting with Mr Humphreys. This did not eventuate as he was on leave at the time. On 11 January the applicant attended the home of Mr Humphreys and property was damaged.

[19] On 12 February 2013 the applicant again attended the Narellan office of the respondent and damaged property of the respondent. On this occasion he was arrested on 12 charges relating to this and other incidents.

[20] The respondent closed their Narellan offices on 12 February 2013 until 25 February 2013.

[21] On 25 February 2013 Ms Friend and Mr Humphreys sought apprehended violence orders in relation to the applicant.

The relevant statutory framework

[22] An application for an unfair dismissal remedy in relation to a dismissal before 1 January 2013 pursuant to s.394 of the Act must have been made within 14 days after the dismissal took effect or within such further period as the Commission allows.

[23] At the relevant time the Act read as follows:

394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to the FWC for an order under Division 4 granting a remedy.

Note 1: Division 4 sets out when the FWC may order a remedy for unfair dismissal.

Note 2: For application fees, see section 395.

Note 3: Part 6-1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.

(2) The application must be made:

(a) within 14 days after the dismissal took effect; or

(b) within such further period as the FWC allows under subsection (3).

(3) The FWC may allow a further period for the application to be made by a person under subsection (1) if the FWC is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.

[24] It is important to appreciate the purpose of limitation periods such as that contained in the Act. The Act has been amended from 1 January 2013 to provide for a period of 21 days within which to lodge an application. The limitation period is quite deliberate.

[25] It is useful to refer to the decision of McHugh J in Brisbane South Regional Health Authority v Taylor 1 where he says:

“The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that ‘[w]here there is delay the whole quality of justice deteriorates’.

The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period.

In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it.

The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension.”

[26] To exercise my discretion in favour of the applicant under s.394(3) of the Act I must be satisfied that there are exceptional circumstances justifying the exercise of that discretion.

[27] The term “exceptional circumstances” has been helpfully summarised by a Full Bench of FWA in Nulty v Blue Star 2as follows:

“In summary, the expression ‘exceptional circumstances’ has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe ‘exceptional circumstances’ as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural ‘circumstances’ as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of ‘exceptional circumstances’ includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.

“A finding that there are ‘exceptional circumstances’, taking into account the matters specified in paragraphs 366(2)(a) to (e), is necessary before the discretion to extend time is enlivened. That is, even when ‘exceptional circumstances’ are established, there remains a discretion to grant or refuse an extension of time. That discretion should be exercised having regard to all the circumstances including, in particular, the matters specified in paragraphs 366(2)(a) to (e) and will come down to a consideration of whether, given the exceptional circumstances found, it is fair and equitable that time should be extended.”

Consideration

[28] I will deal with the circumstances, including each of the matters required by s.394(3) of the Act to be considered, in turn.

(a) the reason for the delay

[29] The applicant has previously submitted that, in effect, he did not know that his employment had been terminated on 4 September 2012. The hearing of the matter on 31 May 2013 proceeded on the basis that he contended that he was dismissed on 12 February 2013 when he visited the Narellan offices of the respondent. The applicant contended that he asked Mr Humphreys if he was still employed and Mr Humphreys replied in the negative. It is this exchange that grounded the applicant’s contention that his employment was terminated on that day. There was no evidence before me that this exchange in fact took place and even if it did it is not inconsistent with a termination on 4 September 2012.

[30] The applicant now retreats from the contention that his employment was terminated on 12 February 2013 and contends that it was terminated on 4 September 2012 but that he believed himself to be a contractor and so unable to make an application to the Commission.

[31] In his submissions he states:

“I went to my employer's premises during late January 2013. Their office was shut for holidays. There was a notice on the premises to come back on 6 February 2013. I went to my employer's premises on 6 February 2013, because I wanted to talk to my employer about my employment status and to inform them that I would be starting my unfair dismissal application with the Fair Work Commission. On the same day, I asked for my entitlements but I did not receive them. I sought legal advice from South-West Sydney Legal Centre on 6 February 2013 and the centre told me that they would help me with my unfair dismissal application. I lodged my application for unfair dismissal to Fair Work Commission (sic) on 6 February 2013.” 3

[32] This is inconsistent with his application having been made on 26 February 2013 but if true, it fortifies my conclusion that he was terminated on 4 September 2012.

[33] The applicant also contends that he believed that he “had no rights in relation to unfair dismissal” because he believed he was working as a contractor, a status he now rejects. He says in his submissions:

“I did not know that Fair Work Commission (sic) existed or that a remedy before the Fair Work Commission was available to me.” 4

[34] He also contends that a knee and shoulder injury during November 2012 should be taken into account.

[35] On 31 May 2013 I found that the weight of evidence before me had persuaded me that the applicant was terminated on 4 September 2012. I also expressed the view that the behaviour of the applicant subsequent to that date was consistent with his being aware of that. In the light of his current submission it is clear that he was aware of his dismissal on this day.

[36] This being the case, and no other reason satisfying me that there are exceptional circumstances for his delay in lodging his application, I find that this weighs against the exercise of my discretion in relation to an extension of time in this matter.

(b) whether the person first became aware of the dismissal after it had taken effect

[37] I conclude that the applicant was aware that he had been dismissed on 4 September 2012 and indeed the applicant now concedes this. There is no weight to be attached to this criteria in the exercise of my discretion in his favour.

(c) any action taken by the person to dispute the dismissal

[38] The only action taken to dispute the dismissal that is discernible from the evidence is the application itself and the subsequent proceedings before the Commission. The applicant claims he sought legal advice prior to lodging his application however there is no evidence of this and no evidence that he disputed his dismissal with the applicant prior to the lodgement of the application, 161 days out of time. I find that this weighs against the exercise of my discretion in relation to an extension of time in this matter.

(d) prejudice to the employer (including prejudice caused by the delay)

[39] The respondent submits that it would be prejudiced by the conduct of an unfair dismissal application in circumstances where it has already expended time and resources on the jurisdictional objections.

[40] The longer the time period from a dismissal the greater the practical difficulty of reinstatement, the primary remedy in an unfair dismissal application. Since this application was lodged 175 days after the dismissal, this does count against an extension of time being granted.

(e) the merits of the application

[41] The merits of the applicant’s case were not fully ventilated at the hearing on the matter on 31 May 2013. However from the evidence given by Ms Friend it would appear that the respondent put the applicant on notice over a period of time that his behaviour in the workplace was unacceptable, including, from the evidence, the purchase of illegal substances, abuse of fellow staff and the resources of the respondent. The evidence of the conduct of the applicant subsequent to the dismissal, which is relevant to the merit case, was of verbal abuse, harassment and destruction of property. This is not a merit finding however I conclude from what has been adduced in evidence so far that the merits of the applicant’s case weigh against his application for extension of time.

(f) fairness as between the person and other persons in a similar position

[42] There is no evidence to suggest that this factor is relevant to my consideration in this matter.

Conclusion

[43] Taking into account all the considerations above, the meaning of the words “exceptional circumstances” and the decisions of this Commission I conclude that there is no justification for the exercise of my discretion in favour of the applicant in this matter and his application is denied. There is no need to consider the other jurisdictional objections raised by the respondent. His application pursuant to s.394 of the Act to grant a remedy for unfair dismissal from his employment with the respondent is dismissed.

Costs

[44] The respondent makes application for costs pursuant to s.611(2)(a) of the Act on the grounds that the application is vexatious or without reasonable cause and pursuant to section 611(2)(b) of the Act on the grounds that it should have been reasonably apparent to the applicant that his application had no reasonable prospects of success.

[45] The power to award costs arises from s.611 of the Act as follows:

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 ofthe 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).

[46] The statute anticipates that in general parties to proceedings before the Commission will pay their own costs. However it provides the Commission with discretion to make an exception to this general rule in certain circumstances:

• Firstly, if the tribunal is satisfied that the first person made the application, or the first person responded to the application, vexatiously, it may order a person to bear some or all ofthe costs of another person. (my italics)



• Secondly, if the tribunal is satisfied that the first person made the application, or the first person responded to the application, without reasonable cause, it may order a person to bear some or all ofthe costs of another person. (my italics)



• Thirdly, if the tribunal 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, it may order a person to bear some or all ofthe costs of another person. (my italics)

Meaning of “vexatiously”

[47] A recent Full Bench decision of the Commission provided guidance on the meaning of this term as it is used in the Act. In Lisa Holland v Nude Pty Ltd T/A Nude Delicafe and Tony Holland v Nude Pty Ltd T/A Nude Delicafe 5 the Full Bench adopted the approach of North J in Nilsen v Loyal Orange Trust6:

“The approach generally taken by members of the Tribunal as to the meaning to be ascribed to the word ‘vexatiously’ in s.611(2)(a) is to adopt the comments of Justice North in Nilsen v Loyal Orange Trust (Nilsen). The Commissioner referenced this case in her reasons for decision. Nilsen was decided in 1997 when the then Workplace Relations Act 1996 applied however the relevant provision considered by His Honour was in terms similar to s.611(2)(a) being whether an applicant ‘instituted the proceeding vexatiously or without reasonable cause’. About this provision His Honour said:

‘The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage : see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.’”

[48] There is no evidence before me upon which I could draw the conclusion that the applicant has pursued his application vexatiously, as in the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage. The application may be ill-conceived and the conduct of it at times reckless, however, that is not the same as being instituted vexatiously. I think the applicant was genuine in seeking an unfair dismissal remedy.

Meaning of “without reasonable cause”

[49] In the case of Brian Clothier v Ngaanyatjarra Media 7 a Full Bench of FWA considered the meaning of the phrase “without reasonable cause”. They cited Kanan v Australian Postal and Telecommunications Union8 as follows:

“[16] On the question of what constitutes ‘without reasonable cause’, Justice Wilcox in Kanan v Australian and Postal Telecommunications Union said that:

‘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.’

[17] This test of what constitutes ‘without reasonable cause’ has been adopted by FWA in several cases.”

Meaning of “should have been reasonably apparent” and “had no reasonable prospect of success”

[50] In the case of Brian Clothier v Ngaanyatjarra Media, cited above, the Full Bench also considered the meaning of the phrases “should have been reasonably apparent” and “had no reasonable prospect of success”. They cited Baker v Salva Resources Pty Ltd favourably as follows:

“[15] In Baker v Salva Resources Pty Ltd, a Full Bench of FWA summarised the approach to be taken in relation to subsection 611(2)(b) of the Act 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.’” 9

[51] I consider that his application was instituted without reasonable cause and that his application is such that a reasonable person would consider that it had no reasonable prospects of success. His case that he was dismissed on 12 February 2013 rather than 4 September 2012 was hopeless. The evidence was overwhelmingly against it. He resiled from this contention in his application for an extension of time and in doing so he reveals that it was disingenuous at the time. His arguments for an extension of time are infected by this lack of candour on 31 May 2013. A whole new set of circumstances are put forward, none of which were even remotely suggested on 31 May 2013. Whilst I acknowledge that I have not had the benefit of his evidence (which he declined to give) I conclude that they are more likely than not to be invented for the purpose of the submission. One of the points of his submission, that he believed he was a contractor on 4 September 2012 when he was dismissed, was the very jurisdictional objection vigorously resisted on 31 May 2013. Of course such a finding, which was not made on that day, would of itself mean his application could not proceed. A reasonable person reviewing of all the circumstances in the matter would come to the view that his application had no reasonable prospect of success. I conclude, in the words of Baker v Salva Resources Pty Ltd, that his application was manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable. Accordingly it had no reasonable prospect of success.

[52] The applicant was given the opportunity to file submissions in regard to the respondent’s application for costs but failed to do so. I make this decision on the assumption that the applicant opposes the order of costs. I believe that the Commission has the power to order costs in this matter pursuant to s.611. I note that s.400A of the Act cannot be relied upon because the date the dismissal took effect, 4 September 2012, is prior to this section of the Act coming into force and the application does not rely on it.

[53] The question that I must determine is whether the Commission should exercise its discretion to award costs in this matter. For the reasons outlined above I believe that this is an application with neither substantial nor even reasonable prospects of success.

[54] Accordingly this is a situation in which an order for costs in favour of the respondent should be made. The application is for indemnity costs however I don’t think the situation warrants this. I intend to order party-party costs for preparation and conduct of the matter on 31 May 2013 and the preparation of written submissions in relation to the extension of time application. The respondent is to provide the applicant an assessment of costs within 7 days of this decision. In the absence of an agreement in respect of the quantum of costs within 21 days, the respondent is to file the assessment with the Commission and I will determine the costs in accordance with Schedule 3.1 of the Fair Work Regulations 2009.

[55] An order will issue reflecting this decision.

DEPUTY PRESIDENT

Appearances:

S Banks, the Applicant with P Fajka

M Lazarus, of Counsel, with P Silver, Lazarus Legal, for Select Insurance Brokers Ltd

Hearing details:

2013.

Sydney:

31 May.

Final written submissions:

25 June 2013

 1 (1996) CLR 541

 2   [2011] FWAFB 975

 3   Applicant’s Submissions 14 June 2013

 4   Ibid.

 5   [2012] FWAFB 6508

 6 [1997] 76 IR 180

 7   [2012] FWAFB 6323

 8 (1992) 43 IR 257 at 264-5

 9   [2012] FWAFB 6323

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