Shane Conder v Lower Great Southern Family Support Association T/A Lower Great Southern Family Support Association (LGSFSA)

[2015] FWC 2919

[2015] FWC 2919

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Shane Conder
v
Lower Great Southern Family Support Association T/A Lower Great Southern Family Support Association (LGSFSA)
(U2014/1111)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 28 APRIL 2015

Application for relief from unfair dismissal - costs application.

[1] On 23 October 2014, Deputy President McCarthy dismissed Mr Shane Conder and Ms Carlyn Conder’s unfair dismissal applications against Lower Great Southern Family Support Association. 1

[2] The Association had lodged an objection to the applications because it said it was not a national system employer.

[3] On 4 November 2014, the Association lodged an application under section 611(2)(a) and (b) and/or section 400A of the Fair Work Act 2009 (the Act) seeking costs against Mr Shane Conder.

The Association’s submissions

[4] The Association submitted that Mr Conder was the Business Manager of the Association and that as part of his role he had responded to and been involved in running unfair dismissal claims in the Fair Work Commission. That matter was dismissed because the Association was not within the jurisdiction of the Commission. 2

[5] It was submitted that due to his involvement, Mr Conder should have been aware that the Association was outside of the Commission’s jurisdiction.

[6] It further submitted that Mr Conder was aware of the audit the Association was subjected to and that a number of the issues it needed to respond to were a result of his failure to discharge his duties.

[7] It was submitted that given this, the only feasible conclusion is that the action was brought in order to waste time and costs in order to gain a collateral advantage.

[8] Once the Association raised its objection, Mr Conder filed an out of time application in the Western Australian Industrial Relations Commission (WAIRC).

[9] After a conciliation conference conducted by both the Commission and the WAIRC, the Association’s lawyers invited Mr Conder to withdraw his claim as it had no prospects of success.

[10] It submitted that the Association had to prepare for the hearing including drafting witness statements.

[11] Mr Conder did not prosecute his claim in the Commission and it was dismissed.

[12] The Association submitted that the application was vexatious because:

(1) He knew his claim was bound to fail on jurisdictional grounds.

(2) He knew he had not reported a mandatory reportable offence which was gross misconduct.

(3) He was invited to withdraw his claim.

[13] It further submitted for the same reasons, that it must have been apparent to Mr Conder when he commenced the proceeding, that it had no prospects of success.

[14] In addition to the matters relied on above, the Association said:

(1) Mr Conder failed to discharge his duties as Business Manager.

(2) Mr Conder’s acts and omissions were gross misconduct.

(3) Mr Condor failed to declare a conflict of interest arising from his relationship with Ms Conder.

[15] The Association sought costs on an indemnity basis on the following basis:

(1) Mr Conder was aware, because he had been in a senior management role, that the Association had successfully defended another unfair dismissal claim because it was not a national system employer.

(2) Mr Conder failed to report a mandatory reportable offence.

(3) The Association unnecessarily incurred legal costs because he failed to prosecute his claim.

[16] The Association also seeks costs under section 400A of the Act.

[17] It was submitted for the same reasons, that Mr Conder caused costs to be incurred by pursuing this claim.

[18] Mr Conder was provided with a copy of the application and was given until 21 November 2014 to respond.

[19] The file was allocated to me as a result of Deputy President McCarthy’s retirement. On 12 January 2015, Mr Conder was provided with a further opportunity to respond to the application. The Association was also directed to file a schedule of costs on scale and on an indemnity basis.

[20] Mr Conder replied on 19 January 2015. In that he advised that both he and Ms Conder had engaged lawyers to represent them in their unfair dismissal claim. He denied that they knew that the Commission did not have jurisdiction to deal with the matter. He advised that he had engaged legal representatives from the Chambers of Commerce and Industry to investigate whether the Association was covered by a federal or state award and at the time of his dismissal that advice had not been received. He advised that both he and Ms Conder became mentally unwell as a result of the dismissal. No medical evidence was attached and on 20 January 2015 Mr Conder was asked to provide medical evidence to support this statement. No further material was filed.

[21] The Association filed a schedule of costs. It sought costs of $24,527.25 on an indemnity basis.

The Legislative Framework

[22] The Commission has the discretion to award costs against a party if certain preconditions are met.

[23] Section 611 of the Act provides as follows:

(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.

[24] 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.

Findings

Timeline of events

Mr Conder’s employment ends	28 March 2014
Mr Conder lodges unfair dismissal application	4 April 2014
The Association lodges it response and objections including that it is not a national system employer	29 April 2014
Directions conference matter adjourned indefinitely as they will lodge applications in WAIRC and deal with out of time. If time extended then the matter will be discontinued. Mr Conder’s representative to notify the Commission of outcome of WAIRC proceedings.	19 May 2014
Conciliation conference scheduled for 22 May 2014 cancelled as the Association wants its objection dealt with before conciliation	5 May 2014
Commission Decision that the Association is not a national system employer in U2013/15566	26 May 2014
Matter set down for hearing of extension of time application in WAIRC but it was vacated due to lack of contact from Mr and Ms Conder	5 and 6 September 2014
Letter from Commission to Mr Conder requesting an update	2 October 2014
Application in the Commission dismissed	23 October 2014

[25] The Association’s application relies on the following allegations:

(1) Mr Conder knew that the Association was not a national system employer when he made the application.

(2) Mr Conder failed to report a mandatory reportable offence.

(3) Mr Conder was guilty of misconduct warranting summary dismissal.

[26] I will deal with each of these matters separately.

Did Mr Conder know that the Association was not a national system employer when he made the application?

[27] The Association submitted that Mr Conder knew that the Commission did not have jurisdiction to hear this claim to support its claim for costs. It said that Mr Conder had been employed when an earlier decision to that effect had been made.

[28] Mr Conder commenced employment on 1 July 2013.

[29] On 5 November 2013, another employee lodged an application alleging he had been unfairly dismissed by the Association. Mr Conder signed the objection filed by the Association. It objected because it stated that the Association was covered by the state system. Detailed submissions were filed by the Association in February 2014 to support its contention that it was not a national system employer. Commissioner Williams issued a decision on 26 May 2014 and dismissed the application because he found that the Association was not a trading corporation and hence not a national system employer.

[30] Mr Conder was dismissed on 28 March 2014 and his application was filed on 4 April 2014 so it cannot be said that he knew that his application was bound to fail when he made the application. In fact, even when this matter was adjourned indefinitely, Mr Conder did not know that his application was bound to fail as no decision had been made.

Did Mr Conder fail to report a mandatory reportable offence?

[31] Given the stage at which this matter was determined, it is not possible on the basis of the material filed for a finding to be made that Mr Conder failed to report a manadatory reportable offence.

Was Mr Conder guilty of misconduct warranting summary dismissal?

[32] No F3 was filed in relation to Mr Conder’s application. The objection filed by the Association only addressed the jurisdictional objection.

[33] Given the stage at which this matter was determined, it is not possible on the basis of the material filed for a finding to be made that Mr Conder was guilty of conduct that would have entitled the Association to summarily dismiss Mr Conder.

Did Mr Conder make his application vexatiously or without reasonable cause?

[34] North J said “a proceeding will be instituted vexatiously we the predominant purpose in instituting the proceeding is to harass or embarrass the other party or to gain collateral damage.” 3

[35] I do not accept that Mr Conder made his application vexatiously.

[36] There is no evidence before me which could support such a finding. Given that there had been no decision that the Association was not a national system employer until after the matter had been adjourned indefinitely in the Commission, it cannot be said that Mr Conder knew that the Association was not a national system employer. It could be inferred that Mr Conder, by making an application in the WAIRC, accepted that it was more likely than not that the Association was not a national system employer. However that is not enough to find that Mr Conder brought his application vexatiously. It is clear that at this time Mr Conder was seeking a determination that his dismissal was unfair. That he was uncertain about the appropriate jurisdiction did not make the application vexatious.

[37] I am also unable to conclude that Mr Conder bought the claim without reasonable cause. The question of whether the Association was a national system employer was not a simple one to answer. Further, I am unable to find that he knew his conduct would have entitled the Association to summarily dismiss him. I am unable to conclude that he made the application without reasonable cause.

Should it have been reasonably apparent to Mr Conder that his claim had no reasonable prospects of success?

[38] In Baker v Salva Resources Pty Ltd 4a Full Bench summarised the approach to be taken in relation to s.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, rat than a subjective test [Wodonga Rural City Council v Lewis, PR956243, at para 6]; and

• a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances we the application is manifestly untenable or groundless [Deane v Paper Australia Pty Ltd,PR932454, at paras 7 and 8] or so lacking in merit or substance as to be not reasonably arguable. [A Smith v Barwon Regional Water Authority, [2009] AIRCFB 769 at para 48].”

[39] Mr Conder’s claim could be said to have no reasonable prospects of success if the Association was not a national system employer. That is a complex legal question and it cannot be said that an argument that it was a national system employer was manifestly untenable or groundless.

Was there an unreasonable act or omission which caused the Association to incur costs?

[40] Given my findings set out above, I do not consider the making of the application to be an unreasonable act or omission.

[41] Mr Conder did not discontinue his application after the decision of the Commission that the Association was not a national system employer. However there is no evidence before me that this decision was brought to Mr Conder’s attention. There was no application made by the Association after this decision was handed down to have the matter dismissed.

[42] After the application was adjourned indefinitely, Mr Conder had an obligation to advise the Commission of what was happening in the WAIRC. He did not notify the Commission that his application had been adjourned and that he was not pursuing his claim. This resulted in the Association advising the Commission of the progress of the matter before the WAIRC. The only costs the Association incurred as a result of that omission was the costs of the email.

Conclusion

[43] Even if the necessary conditions for awarding costs exist, the decision to award costs is discretionary. In this case, I have not found that the necessary preconditions existed for the awarding of costs. Therefore the costs application is dismissed.

DEPUTY PRESIDENT

 1   [2014] FWC 7530

 2   U2013/15566

 3   Nilsen v Loyal Orange Trust (1997) 76 IR 180 at 181

 4   [2011] FWAFB 4014 at [10]

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