Sharn Stanley v QBE Management Services Pty Limited T/A QBE

[2012] FWA 8397

[2012] FWA 8397

FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Sharn Stanley
v
QBE Management Services Pty Limited T/A QBE
(U2012/5472)

COMMISSIONER JONES MELBOURNE, 1 OCTOBER 2012

Application for Costs Orders by QBE Management Services, Indemnity or Party - Party Basis; Application for Adjournment; Application Refused

Background

[1] On 12 September 2012 a Decision (PR528177) was issued in relation to an application made by QBE Management Services Pty Ltd T/A QBE (QBE) for costs orders pursuant to s.611 of the Fair Work Act 2009 (the Act) against the Applicant. In the decision I determined that it was reasonably apparent to the Applicant that her application for relief from unfair dismissal had no reasonable prospects of success and that the Applicant must bear the costs incurred by QBE from the date of her application, 28 February 2012. The question of the quantum of costs, including the submission by QBE that costs be awarded on an indemnity basis, was deferred to a further hearing (further costs hearing). Directions were issued for the purpose of a further cost hearing.

[2] By correspondence dated 24 September 2012, QBE requested a directions hearing to consider their request that the further costs hearing deal with the issue of whether costs be awarded on a indemnity basis only - with a bill of costs to be filed and served by QBE consequent on the Tribunal’s decision and that the hearing date be deferred to a date suitable to their counsel (who appeared on their behalf in the costs proceedings).

[3] On 27 September 2012, PCC Lawyers filed a Notice of Representative Commencing to Act (Form F53) for the Applicant. By correspondence dated 27 September 2012, PCC Lawyers referred to QBE’s earlier advice that there is an ongoing police investigation into the reasons which formed the basis for QBE’s dismissal of the Applicant. The Applicant’s lawyers expressed concern that “evidence and submissions in relation to whether an order for indemnity costs is appropriate may prejudice our client’s defence in related criminal proceedings.” An adjournment of proceedings was sought until such time as the Applicant could ascertain “whether criminal charges are to be brought in this matter.” PCC Lawyers foreshadowed that, if they were, then an application would be made that “Fair Work Australia adjourn proceedings until after the criminal matter is concluded.”

[4] A directions hearing to consider the applications by QBE and the Applicant was held on 28 September 2012 at the conclusion of which I acceded to QBE’s request to list the hearing for the purpose only of determining whether costs should be awarded on an indemnity or party-party basis and to amend the directions for the hearing of the matter. Accordingly, the Applicant’s request to adjourn proceedings was declined. The following sets out the reasons for refusing the Applicants application to adjourn proceedings.

Submissions

[5] The Applicant’s application to adjourn proceedings is in two parts; first that proceedings be adjourned to enable them to ascertain whether criminal charges are brought against the Applicant and, secondly, if they are, to adjourn the proceedings in Fair Work Australia until the conclusion of criminal proceedings.

[6] It is relevant to note that the police investigations and possible criminal charges being referred to are in relation to allegations that the Applicant engaged in fraudulent conduct against QBE to the tune of, QBE alleges, $350,000.00. At all times in the proceedings before Fair Work Australia, the Applicant has denied these allegations. Further, it is relevant to note that no findings have been made by Fair Work Australia in relation to these allegations (the Applicant having discontinued her application prior to a substantive proceeding.)

[7] At the directions hearing Mr Jolly for QBE stated that police investigations into the allegations were ongoing.

[8] The Applicant submits that continuing with the further costs hearing will prejudice the applicant in any criminal proceedings as she intends to give evidence in the further costs hearing as to her understanding of her actions leading to the police investigations and during the course of proceedings before Fair Work Australia. The evidence it is said will bear directly on the Applicant’s mental capacity at the time of her termination and during proceedings. The Applicant further submits that any prejudice to QBE from adjourning the proceedings is illusory as the Applicant is impecunious, having no assets or income.

[9] QBE oppose any adjournment submitting that the Applicant has waived her right to claim any prejudice as this has not been raised by her in the course of proceedings in Fair Work Australia, notwithstanding she was made aware of the police investigations when QBE filed its response to her application (Form 3) on 9 March 2012. QBE stated that, unless the Applicant has now changed her position she held during the course of the investigations by QBE leading to her dismissal and during the course of the unfair dismissal proceedings, that she had not engaged in fraud there was no prejudice to her in giving evidence as to her mental state at the relevant time. QBE stated that criminal proceedings are pending and the Tribunal’s traditional approach to applications such as this is to refuse them.

Authorities

[10] The principles to be applied to applications to adjourn civil proceedings pending the determination of criminal proceedings is set out in the decision of Wooten J in McMahon v Gould  1 as follows:

“(a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court;

(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds;

(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with;

(d) Neither an accused or the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;

(e) The court’s task is one of `the balancing of justice between the parties’, taking account of all relevant factors;

(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors;

(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused’s `right of silence’, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding...;

(h) However, the so-called `right of silence’ does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding;

(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;

(j) In this regard factors which may be relevant include:

(i) the possibility of publicity that might reach and influence jurors in the civil proceedings;

(ii) the proximity of the criminal hearing;

(iii) the possibility of miscarriage of justice eg, by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;

(iv) the burden on the defendant of preparing for both sets of proceedings concurrently;

(v) whether the defendant has already disclosed his defence to the allegations;

(vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him;

(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant...; and

(l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed.”

[11] This approach has been adopted by courts and tribunals in various jurisdictions. 2 In Sanford v Austin Clothing Company Pty Ltd trading as Gaz Man3, SDP Watson stated:

“[31] ... The respondent is prima facie entitled to have the matter determined as quickly as practicable. An adjournment should not be lightly entertained. The onus to make good the adjournment application lies with the applicant for the adjournment. The applicant is not entitled, of right, to an adjournment in light of the criminal proceedings. Each application for adjournment must be made on its own merits and balance the interests of the parties.

[32] Where there are pending criminal proceedings the accused’s “right of silence” is a relevant consideration, however the so-called “right of silence” does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. In the case of Philippine Airlines v Goldair, Young CJ concluded at page 386 that:

“The right of silence is a right which relates to criminal proceedings and it would need a very strong case before the Court should intervene solely on that ground to stay civil proceedings pending the determination of criminal proceedings.”

[33] Injustice to a defendant in the criminal proceedings is a relevant consideration in considering competing interests of the parties, but it must be a real and not merely notional danger.”

[12] I have applied these principles in determining the application by the Applicant.

Consideration

[13] The circumstances of this matter are that proceedings were commenced by the Applicant on 28 February 2012 and discontinued by her on 18 June 2012 prior to the substantive matter being dealt with by Fair Work Australia. QBE successfully applied for costs against the Applicant. In its Form 3 response to the Applicant’s application for relief against unfair dismissal filed on 9 March 2012 QBE stated that there “the matter (the allegations of fraud) was referred to the NSW police on 22 February 2012.” QBE has informed Fair Work Australia that the police investigations are ongoing. At all times and, as I understand it continuing, the Applicant has denied the allegations of fraud made by QBE against her. The proceedings which are sought to be adjourned pending the determination of criminal proceedings is a hearing which concerns the amount of costs to be ordered (including whether costs should be awarded on an indemnity basis). The evidence which the Applicant states she intends to give at this hearing is directed to her state of understanding at the time of her dismissal and during the course of proceedings.

[14] The objects of Part 3-2 - Unfair Dismissal of the Act provide in part for the establishment of procedures that are “quick, flexible and informal”: s.381(1)(b)(i). QBE is entitled to have its application for costs orders finalised as soon as practicable, subject to the Applicant satisfying Fair Work Australia that there is a very strong case 4 that her rights at any criminal proceedings (assuming they eventuate) will be prejudiced.

[15] Having regard to the circumstances of this matter I am not satisfied that the potential for prejudice suffered by the Applicant in any criminal proceeding is real rather than merely notional.

[16] The Applicant’s application for adjournment is refused.

[17] As the Applicant does not oppose QBE’s proposal that the further costs hearing only deal with the issue of whether costs should be awarded on an indemnity basis, with a bill of costs to be filed and served by QBE consequent on the Tribunal’s decision, I grant this application. Directions have been issued to reflect this.

COMMISSIONER

Appearances:

Mr G. Jolly - Representative for QBE Management Services Pty Ltd

Ms H. Carter - Representative of the Applicant

Hearing details:

2012

Melbourne

September, 28

 1 ACLR 202 at 206

 2   Philippine Airlines v Goldair (Aust) Pty Ltd (Philippine Airlines) (1990) VR 355 at 390; Howarth v Mornington Peninsula Shire Council Print S0138; Sanford v Austin Clothing Company Pty Ltd trading as Gaz Man, Print S8287; Kvackajv Monash University [2005] AIRC 492 Re Sogo Duty Free Pty Ltd and Commissioner of Taxation and Ors [2005] AATA 1298

 3   Op. Cit

 4   Philippine Airlines v Goldair (Aust) Pty Ltd (Philippine Airlines) op.cit at 390

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