SGA (1994) Pty Ltd v Simon Lewis and Unfair Dismissals Australia Pty Ltd

[2020] FWC 2934

[2020] FWC 2934

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 394 - Application for unfair dismissal remedy

SGA (1994) Pty Ltd
v
Simon Lewis and Unfair Dismissals Australia Pty Ltd
(U2019/6862)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 5 JUNE 2020

Costs order against paid agent – quantum – assessment – order made

[1] In my decision on costs of 30 April 2020 1 I decided that it was appropriate to make an order for costs under section 401(1A) of the Fair Work Act 2009 (FW Act) against the paid agent Unfair Dismissals Australia Pty Ltd (UDA) which had acted for the applicant Mr Lewis in the primary unfair dismissal proceeding U2019/6862. The foreshadowed costs order was to be in favour of the respondent employer SGA (1994) Pty Ltd (Stamford) and was to be assessed on an indemnity basis.

[2] The relevant terms of my decision were:

“[135] I will order that Unfair Dismissals Australia pay Stamford’s costs with respect to attendance at the additional half day of hearing on 19 November 2019 on account of its failure to produce to Stamford the supplementary statements of its client prior to Mr Lewis’s cross examination and the consequential abandonment of the afternoon of the first day of hearing.

[136] Noting that indemnity costs orders are rare, the circumstances in this matter warrant an order on that basis. Although the unreasonable conduct was not a product of bad faith, it was reckless. It arose from an organisational failure, not just an advocate’s inexperience or misjudgement. It was highly prejudicial to the efficiency of proceedings and Stamford’s right to procedural fairness. Curing those impacts led to delay which directly and materially contributed to an extra half day of hearing. It was, within the meaning of the authorities, a “relevant delinquency”. The costs ordered will be assessed on an indemnity (solicitor and client) basis. Ultimately the quantum ordered will be based on what is reasonable, within these parameters.

[137] I will direct that Stamford and Unfair Dismissals Australia confer on the quantum of costs reasonably payable under the terms of the foreshadowed order. I direct this occur within fourteen days of this decision. To avoid further unnecessary costs, I will not order that costs be assessed by a costs assessor. If the quantum is not resolved privately between Stamford and Unfair Dismissals Australia I direct that within twenty-one days Stamford file in the Commission and serve on Unfair Dismissals Australia an itemised schedule of costs consistent with this decision. Within seven days of receipt of Stamford’s itemised schedule Unfair Dismissals Australia is to file a response in the Commission and serve its response on Stamford. If the matter is unresolved and if I receive such a schedule I will re-list these proceedings to settle the issue of quantum.”

[3] The quantum of costs was not resolved privately between Stamford and UDA. Stamford filed an itemised schedule of costs on 21 May 2020 seeking an order in the sum of $17,554.50. On 27 May 2020 UDA filed a response contending that the reasonable quantum is $4,087.90. Stamford replied on 29 May 2020 adjusting the sum sought to $17,519.50. Upon the receipt of written submissions, 2 there has been no objection to the Commission determining quantum on the papers.3

[4] This decision determines that issue.

Consideration

[5] The terms of a costs order under section 401(1A) of the FW Act are discretionary. That discretion is to be exercised in a judicial manner. I indicated in the costs decision that “ultimately the quantum ordered will be based on what is reasonable”. Whilst the Commission is not a court, the principles adopted by courts for the assessment of costs on an indemnity basis are a helpful guide. I adopt them in that context noting however that it is ultimately what is reasonable in the context of these Commission proceedings that requires determination.

[6] Generally, those principles are that an indemnity costs order (within the scope of the relevant decision) will include all costs incurred except those that have been unreasonably incurred or are of an unreasonable amount. An order is made for beneficial purposes and thus the receiving party is generally entitled to the benefit of any reasonable doubt as to quantum or reasonableness of particular items claimed.

[7] The starting point for this assessment is the scope of the costs order foreshadowed in the costs decision of 30 April 2020. The order concerns, and only concerns: 4

“costs with respect to attendance at the additional half day of hearing on 19 November 2019”.

[8] UDA contend that this includes only costs incurred for attending the hearing on the day of 19 November 2020 and not costs associated with preparing for attendance on that day. In practice, UDA contend that costs between 31 October 2019 (the day after the initially scheduled final day of hearing) and 19 November 2019 (the day of the actual final day of hearing) should not be taken into account. I do not agree. Costs necessarily incurred in preparation for a hearing are costs with respect to attendance at the hearing. Thus, costs incurred in this intervening period, are within the scope of the costs order though their reasonableness requires determination.

[9] I consider the individual value of specific items in the schedule of costs submitted by Stamford to not be unreasonable amounts though I consider it appropriate in the circumstances to make four categories of deduction. Further, the individual items claimed are not, where provided for, at a rate in excess of those prescribed for the purposes of section 403 of the FW Act. 5

[10] Firstly, items associated with Mr Baggaley giving evidence (items 102 to 104). These are outside the terms of the costs decision as Mr Baggaley gave evidence prior to 31 October 2019. This results in a $35.00 deduction.

[11] Secondly, costs associated with an amended transcript request (items 7 and 8). These are unreasonable given earlier items for the same transcript request (items 2 and 3). This results in a $48.00 deduction.

[12] Thirdly, the value ($2,013.50) of items 6 associated with the amendment to Mr Donald’s witness statement and giving evidence. Mr Donald had been identified by Stamford as a witness in advance of the merits hearing. His witness statement had been filed pre-hearing in accordance with my directions. Due to the matter not concluding within three days, Mr Donald’s evidence was not given until 19 November 2019. There are two reasons why I make this deduction. Firstly, whilst Mr Donald made changes to his statement and gave evidence between 31 October and 19 November 2019 (inclusive) the costs incurred do not fall within the scope of the costs decision. These were generally costs incurred with respect to amending an already lodged witness statement and not “with respect to attendance at the additional half day of hearing”. Secondly, in any event and in the exercise of a general discretion I do not consider it appropriate to include the value of such costs in an order. The need for amendment bore no relationship to matters that gave rise to the extra day of hearing. It was open to Mr Donald to make these amendments at any time prior to giving evidence and not simply during the extended period between 31 October and 19 November 2019. This results in a discount of $2,013.50.

[13] Fourthly, the allowance sought for general care and conduct of the matter (item 142, $1,748). This is expressed by Stamford as an overall allowance associated with the conduct of the proceedings as a whole and its alleged complexity. The Schedule of Costs prescribed by regulation 3.08 contemplates such charges in an amount “the Commission considers reasonable” (item 1201). Being a charge for the proceedings as a whole this item has only limited application to the period falling within the scope of the costs decision. Further, whilst the matter was complex overall, I do not consider there to have been any special complexity “with respect to attendance at the additional half day of hearing on 19 November 2019” other than the fact that a final witness needed to give evidence (Mr Donald) and final oral submissions needed to be made. Having regard to the limited extent this item falls within the scope of the costs decision it is not, in the exercise of discretion, reasonable to include the full value in the costs order. The extra day of hearing (and its preparation) broadly equated to one fourth of the care and attention required to these proceedings overall. I will allow 25% of the amount claimed with respect to this item. This results in a discount of $1,311.00.

[14] As a consequence of the above, the total value of discounts from the itemised schedule is $3,407.50. This leaves the sum of $14,147.00. Although this quantum also includes some items (such as preparation of final submissions) that would have had to be incurred (at least in draft form) even if the extra day of hearing had not been required, those costs bore a relationship to proceedings on 19 November 2019. For example, Stamford’s final submissions could not have been presented until all evidence was in. Thus, Stamford required knowledge of what Mr Donald said in the witness box on 19 November 2019, not just in his amended witness statement.

[15] Considered overall, the quantum I have assessed is a reasonable sum with respect to costs not unreasonably incurred by Stamford and not of an unreasonable charge when viewed as individual items or collectively.

[16] I will make an order in that quantum.

[17] Stamford seek that the amount be paid within 14 days. UDA submit that it requires “substantially more time than 14 days” given they are a small business with, it is said, one employee. UDA points to the fact that Stamford is a multinational company.

[18] Whilst there is disparity in the circumstances of Stamford and UDA, and whilst I also take into account that an order for the payment of monies will necessarily have a cash flow impact on the entity required to make the payment, these factors have to be balanced against the right that the receiving party has to access the remedy to which they are entitled, and to do so in a timely manner. UDA have been aware, from 30 April 2020, that an indemnity costs order of some magnitude would be made against them. They have had a period of over a month to put in place contingencies.

[19] I will order that payment be made within 28 days from the date of this decision.

Conclusion

[20] In conjunction with the publication of this decision I issue an order that pursuant to section 401(1A) of the Fair Work Act 2009 Unfair Dismissals Australia Pty Ltd make payment of indemnity costs to SGA (1994) Pty Ltd in the sum of $14,147.00. This payment is to be made no later than 3 July 2020.

DEPUTY PRESIDENT

Final written submissions:

Applicant (Stamford): 21 May 2020, and 29 May 2020

Respondent (UDA): 27 May 2020, and 29 May 2020

Printed by authority of the Commonwealth Government Printer

<PR719932>

 1   [2020] FWC 2229

 2   UDA Response to Schedule of Costs 27 May 2020 and Emails ‘UDA to Chambers – Anderson DP’ 29 May 2020; Stamford Reply to UDA Response 29 May 2020

 3   Email ‘Chambers – Anderson DP to Stamford and UDA’ 27 May 2020

 4   [2020] FWC 2229 at [135]

 5 See regulation 3.08 and Schedule 3.1 Fair Work Regulations 2009

 6   Item numbers 9, 12, 13, 14, 15, 18, 28, 29, 30, 31, 32, 33, 34, 35, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 85, 95, 96, 138 and 139