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

[2012] FWA 7165

Note: An appeal pursuant to s.604 (C2013/5852) was lodged against this decision - refer to Full Bench decision dated 4 November 2013 [[2013] FWCFB 8666] for result of appeal.

[2012] FWA 7165 

FAIR WORK COMMISSION

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, 12 SEPTEMBER 2012

Application for Costs Orders pursuant to s.611 of the Act

Introduction

[1] On 3 July 2012 QBE Management Services Pty Ltd (QBE) filed an application for costs orders pursuant to s.611 of the Fair Work Act 2009 (the Act) against Ms Sharn Stanley (the Applicant).

[2] QBE seeks costs orders against the Applicant on the following grounds:

(a) under section 611(2)(a) of the Act on the basis that the Applicant made her Application for Unfair Dismissal Remedy vexatiously;

(b) under section 611(2)(a) on the basis that the Applicant made her Application for Unfair Dismissal Remedy without reasonable cause;

(c) under section 611(2)(b) on the basis that it was reasonably apparent to the Applicant that the Application had no reasonable prospects of success.

Background

[3] The relevant background to the application for costs orders can be summarised as follows:

(a) On 28 February 2012 an application for Unfair Dismissal Remedy (Form 2) was filed in Fair Work Australia (FWA) on behalf of the Applicant by Berrigan Doube Lawyers (BD Lawyers);

(b) On 9 March 2012 QBE filed its response to the application for unfair dismissal remedy (Form 3);

(c) On 20 March 2012 Conciliation was conducted by a FWA Conciliator;

(d) On 5 April 2012 the matter was listed for Arbitration on 6 - 8 June 2012;

(e) On 23 April 2012 BD Lawyers filed in FWA an Outline of Submissions and the Applicant’s witness statement;

(f) On 3 May 2012 Minter Ellison Lawyers file a Notice of Representative Commencing to Act (Form 53) for QBE;

(g) On 7 May 2012 Minter Ellison Lawyers sent by email correspondence headed ‘Without prejudice except as to costs’ to BD Lawyers;

(h) On 16 May 2012 Minter Ellison Lawyers filed in FWA witness statements and ‘foreshadowed’ that QBE has a jurisdictional objection, and that QBE will be seeking that the objection be determined, ‘as a preliminary matter’;

(i) On 18 May 2012 Minter Ellison Lawyers filed the Respondent’s Outline of Submissions and further witness statements. A request was made that the jurisdictional objection be determined as a preliminary matter;

(j) On 18 May 2012 BD Lawyers filed in FWA a Notice of Representative Ceasing to Act (Form 54);

(k) The matter was listed for Jurisdiction Hearing on 1 June 2012;

(l) On 22 May 2012 the Applicant requested the Jurisdiction Hearing be adjourned on the grounds that she was instructing a new lawyer and her incapacity to represent herself due to a ‘mental condition’. This request was opposed by Minter Ellison Lawyers;

(m) On 24 May 2012 the Jurisdiction Hearing was vacated and a Mention was listed for 1 June 2012;

(n) On 29 May 2012 the Applicant forwarded to FWA correspondence from her treating medical practitioner, dated 29 May 2012, regarding the Applicant’s incapacity to ‘represent herself with respect to an unfair dismissal case’;

(o) Following the Mention, directions were issued to QBE and the Applicant requiring each to advise whether they objected to the jurisdictional objection being dealt with on the papers. The parties were advised that, in the absence of agreement, the matter would be heard on 6 June 2012;

(p) On 5 June 2012, the Applicant advised Chambers she would not be attending the hearing listed for 6 June 2012 because she had not been able to see her lawyers and because of her medical condition;

(q) On 6 June 2012 the parties were advised that FWA would determine the matter on the papers without the necessity of a hearing. The parties were directed to file any further material and/or submissions by 15 June 2012;

(r) On 15 June 2012 QBE filed further material;

(s) On 21 June 2012 a Notice of Discontinuance (Form 50) was filed in FWA by the Applicant;

(t) On 3 July 2012 QBE made an application for costs orders;

(u) On 4 July 2012 the application for costs orders by QBE was listed for hearing on 24 August 2012 (Costs Hearing). Directions were issued for the filing and serving of submissions, witness statements and other documentary material;

(v) On 26 July 2012 the Applicant telephoned my Chambers and advised that she would not be attending the Costs Hearing;

(w) On 7 August 2012, by email to my Chambers, the Applicant stated, ‘I have been unwell and at this stage I will not be attending on the 24th August 2012. I will reconfirm this closer to the date’;

(x) On 14 August 2012 the Applicant filed an Outline of Submission;

(y) On 14 August 2012, by email to my Chambers, the Applicant stated:

I will not be able to attend on the 24th August 2012, due to my health, my doctor has advised I am in no condition and will not be able to attend, the doctor advised it would be at least 5 weeks before I would be in any condition to attend same.

The Applicant further stated:

I am asking that my submissions be considered in my absence. I have not asked for an adjournment in order for this matter to be finalised.

(z) On 14 August 2012, by email from my Chambers, the Applicant was advised that she was required to provide a medical certificate regarding her incapacity to attend the hearing;

(aa) In response to communication (dated 16 August 2012) from Minter Ellison Lawyers stating they would be objecting to the Applicant’s submissions ‘being tendered or taking into account in the proceeding’, the Applicant forwarded an email (dated 16 August 2012), to my Chambers stating:

In this case unless this is resolved prior, I will be requesting an adjournment ... as it would not be a fair hearing to me if my submissions are not considered because of my absence.

(bb) By email sent on 23 August 2012 at 7.50pm to my Chambers, the Applicant requested an adjournment of the hearing listed for 24 August 2012. The Applicant’s grounds for the adjournment referred to a Schedule of Costs QBE had filed at 12 noon on 23 August 2012 at my direction.

Hearing

[4] Ms Raper of Counsel appeared on behalf of QBE. The Applicant did not attend the hearing.

[5] The Applicant’s request for an adjournment was considered at the hearing and was refused. 1 The parties were advised that the hearing was confined to the question whether FWA should exercise its discretion to order costs under s.611 against the Applicant. In circumstances where QBE’s application was granted, a further hearing would be listed to determine the quantum of costs.

[6] Following a consideration of an application by QBE under ss.593 and 594 as to confidentiality, Orders were issued.

[7] Given the communications between QBE and the Applicant, set out above, it is appropriate to set out the material I have had regard to in this decision:

(a) QBE’s Outline of Submissions filed on 18 May 2012 and 20 July 2012;

(b) Annexures to the Witness Statements of Adam Daniels, Martin Webb and Michael Vella filed by QBE on 16, 17 and 18 May 2012 respectively and Geoffrey Burnett Brown filed on 23 August 2012;

(c) The Applicant’s Outline of Submissions filed on 23 April 2012 and 14 August 2012 and the Applicant’s witness statement filed on 23 April 2012;

(d) Documents produced to FWA in accordance with various Orders issued under s.596(2) of the Act by the Commonwealth Bank Australia, Community First Credit Union Limited, Westpac Banking Corporation, Insurance Australia Group Limited, Citigroup Pty Ltd, LabourPower Recruitment Services, IBM Limited, NSW Police Force, Guild Insurance Ltd and Specialty Fashion Group; and

(e) The oral submissions of QBE at the Costs Hearing.

Legislation

[8] S.611 of the Act provides:

611 Costs

(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:

(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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.

(3) A person to whom an order for costs applies must not contravene a term of the order.

[9] S.402 of the Act provides that an application under s.611 must be made within 14 days after FWA determined the matter or the matter is discontinued. QBE filed its applications under and s.611 within 14 days after the Applicant filed Form 50.

S.611 - the Authorities

[10] The general rule in proceedings before FWA is that each party bears their own costs: s.611(1). However, FWA may exercise its discretion to order a party to bear some or all of another person’s costs where it is satisfied that specified circumstances exist. QBE rely on all the circumstances specified in s.611(2).

S.611(2)(a): Vexatious or Without Reasonable Cause

Vexatious

[11] The approach to the question whether a proceeding has been instituted vexatiously is well settled. Litigation may be regarded as vexatious on either objective or subjective grounds. 2

[12] Proceedings are vexatious if: 3

(a) They are instituted with the intention of annoying or embarrassing the person against whom they are brought.

(b) They are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise.

(c) Irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless.

[13] In Re Cameron, 4 Fitzgerald P stated, in relation to an application to have an applicant declared a vexatious litigant under the applicable Queensland statute:5

It is also necessary to decide what makes legal proceedings vexatious. Although there are sometimes statutory indications, the broad test potentially concerns such factors as the legitimacy or otherwise of the motives of the person against whom the order is sought, the existence or lack of reasonable grounds for the claims sought to be made, repetition of similar allegations or arguments to those which have already been rejected, compliance with or disregard of the court’s practices, procedures and rulings, persistent attempts to use the court’s processes to circumvent its decisions or other abuse of process, the wastage of public resources, and funds, and the harassment of those who are the subject of the litigation which lacks reasonable basis: see, for example, Attorney-General (N.S.W.) v. Wentworth (1988) 14 N.S.W.L.R. 481; Jones v. Skyring [1992] HCA 39; (1992) 66 A.L.J.R. 810; Jones v. Cusack [1992] HCA 40; (1992) 66 A.L.J.R. 815, and Attorney-General (N.S.W.) v. West (N.S.W. Common Law Division No. 16208 of 1992, 19 November 1992).

Without Reasonable Cause

The authorities on the approach to be taken to the phrase ‘without reasonable cause’ were considered in Hamilton James & Bruce Pty Ltd v Gray (Gray): 6

[18] The phrase “without reasonable cause” was considered in Kanan v Australian Postal and Telecommunications Union. Section 347(1) of the then Industrial Relations Act 1988 (Cth) provided that:

“A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.” (Underlining added)

[19] In Kanan’s case, Justice Wilcox said in respect of the phrase that:

“A proceeding is not to be classed as being launched ‘without reasonable cause’ simply because it fails. As Gibbs J said in R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473, speaking of the Conciliation and Arbitration Act equivalent of s 357 (s 197A):

‘... a party cannot be said to have commenced a proceeding “without reasonable cause”, within the meaning of that section, simply because his argument proves unsuccessful. In the present case the argument presented on behalf of the prosecutor was not unworthy of consideration and it found some support in the two decisions of this court to which I have referred. The fact that those decisions have been distinguished, and that the argument has failed, is no justification for ordering costs in the face of the prohibition contained in s.197A.’

In Standish v University of Tasmania (1989) 28 IR 129 at 139 Lockhart J applied the qualification in ordering costs against an applicant whose case he thought ‘misconceived’, rather than simply unsuccessful. But, as the Full Court pointed out in Thompson v Hodder (1989) 29 IR 339 at 342, ‘there may be cases which could not be described properly as “misconceived” but which would nevertheless be held to have been instituted without reasonable cause’.
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.” (Endnote omitted)

In Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission, 7 the Full Court of the Federal Court when considering the term ‘without reasonable cause’ in the general costs provision (s.347) of the WR Act8 stated:

“60. The question therefore arises whether, as contended by counsel for Ms Hart, the plaintiff instituted the proceeding vexatiously or without reasonable cause. A party does not institute proceedings without reasonable cause merely because that party fails in the argument put to the Court: R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J. The section reflects a policy of protecting a party instituting proceedings from liability for costs, but that protection may be lost. Although costs will rarely be awarded under the section and exceptional circumstances are required to justify the making of such an order (see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 per Northrop J), a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 per Wilcox J; see also Bostik (Aust) P/L v Gorgevski (No 2) (1992) 36 FCR 439; and Nilsen v Loyal Orange Trust (1997) 76 IR 180.
...
63. It is a matter of judgment, sometimes of fine judgment, in all the circumstances of a particular case whether a proceeding is brought without reasonable cause.”

S.611(2)(b): Reasonably apparent, no reasonable prospect of success;

In relation to s.611(2)(b), the Full Bench in Baker v Salva Resources Pty Ltd (Baker), 9 stated (endnotes omitted):

[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.

Similarly, in Gray, 10 a Full Bench observed (endnotes omitted):

[20] The phrase “no reasonable prospect of success” in the context of costs applications was considered by a Full Bench of the Australian Industrial Relations Commission (AIRC) in Deane v Paper Australia Pty Ltd. In that decision the Full Bench said:

“[5] It was not disputed that for the purposes of s.170CJ(1)(a)(ii) the appeal instituted by the applicant was a proceeding begun by him. The question is whether he did so in circumstances where it should have been reasonably apparent to him that there was no reasonable prospect of success. If that question is answered in the affirmative the Commission is able to make an order for costs against him. Whether it should do so is a separate although closely related question which requires a separate exercise of discretion.
[6] We were taken to a number of authorities which were said to bear upon the construction of s.170CJ. None of those authorities deals with the operative expression which now appears in s.170CJ(1)(b), namely: ‘no reasonable prospect of success’.
[7] The expression ‘no reasonable prospect of success’ also appears in ss.170CF(2)(d), 170CF(3)(b) and 170CF(4). Section 170CF(4) provides for the summary dismissal of an application for relief pursuant to s.170CE, by the issue of an appropriate certificate, if the Commission concludes that the application has no reasonable prospect of success. The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service. In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that a conclusion that an application had no reasonable prospect of success should only be reached with extreme caution and where the application is manifestly untenable or groundless.
[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.”

[21] In Smith v Barwon Region Water Authority, a Full Bench of the AIRC in considering the phrase “no reasonable prospect of success” in the context of s.650 of the Workplace Relations Act 1996 (Cth) (WR Act) concerning AIRC advice to the parties about an application for relief in respect of termination of employment said:

“[48] Having regard to the authorities ... it seems to us that an application will have no reasonable prospects of success if it is so lacking in merit or substance as to be not reasonably arguable.”

It is relevant that French CJ and Gummow J in Re Spencer, 11 in considering the genesis of the criterion ‘no reasonable prospect of success’ observed it would include a case in which there is unanswerable evidence of a fact fatal to the pleaded case.12

It is clear from the express term of s.611(2)(a) which speak of a person who ‘made the application’ that the reference point for deciding whether s.611(2)(a) is satisfied is the point at which the application is made.

In my opinion s.611(2)(b) is not so constrained. Whilst the subsection refers to a person who ‘should have been’, this use of past tense is a reference to the steps in the proceeding up until the matter is determined or discontinued. 13 The words of s.611(2)(b) do not limit the test to the making of the application. The subsection includes in the conduct to be examined a ‘response to the application’. Clearly, s.611(2)(b) cannot be limited to the time at which the application is made but applies in the course of proceedings until the time at which the matter is determined by FWA or discontinued.

The issues to be determined are:

(a) Whether the Applicant made the application vexatiously; or

(b) Whether the Applicant made the application without reasonable cause; or

(c) Whether it should have been reasonably apparent to the Applicant that her application has no reasonable prospect of success;

(d) If a positive finding is made in respect of any or each of (a), (b) or (c), whether an Order for costs should be made; and

(e) If FWA decides to award costs, the amount of the costs and whether they should be on a party/party or indemnity basis.

Submissions

QBE submits that it is integral to their Application for costs orders that the Applicant has surrendered rather than because of some supervening event. 14 QBE submit the Applicant has discontinued because of difficulties she always faced:15

namely that she didn’t meet the threshold test associated with the six month minimum employment period; secondly that she committed serious misconduct by defrauding QBE and by virtue of that we say it could never have been possibly conceived that any procedural unfairness argument that falls into the mix associated with the determination of this Tribunal of the issue 16

QBE’s submissions in respect of s.611(2)(a) and (b) can be summarised as follows:

(a) The application was made vexatiously because it was brought with the intention of harassing QBE and its employees and because the Applicant knew she committed fraud;

(b) The application was made without reasonable cause because the Applicant did not satisfy the jurisdictional requirements under s.382 as she was not employed for 6 months by QBE and because she defrauded QBE of more than $350,000. The Applicant was given an opportunity to respond to the allegation before she was summarily dismissed. These facts, QBE asserts, were clear and incontrovertible evidence, fatal to the application and plainly known to the Applicant; and

(c) It was reasonably apparent to the Applicant that she had no reasonable prospect of success throughout the proceedings. QBE rely on the basis set out in (b) above. In this respect QBE identify, in the alternative, three points of time beyond the time the Applicant made the Application when this criteria was satisfied:

● 9 March 2012, when the Form 3 was filed;

● 7 May 2012, being the date of the costs letter; and

● 18 May 2012, when QBE filed its Outline of Submission and witness statements.

Evidence

The evidence before FWA will be dealt with under three general headings which flow from the basis upon which QBE puts its application for costs orders. These are harassment, minimum employment period and the fraud allegations.

Harassment

QBE rely on emails sent by the Applicant to Mr Darren Bickham, Human Resource Manager, on 16 and 17 February 2012 which are described by QBE as harassing, 17 emails sent by the Applicant to Minter Ellison in the period 18 to 20 June 201218 and text messages sent to QBE employees.19

Minimum Employment Period

In the Form 2, the Applicant’s period of employment with QBE is specified as 17 June 2011 to 15 February 2012. In its Form 3, QBE specified that period as 29 August 2011 to 15 February 2012. QBE submit that prior to 29 August 2011, the Applicant was engaged by labour-hire companies, PorterAllen and Talent Care Services (TCS), and prior to 29 August 2011, PorterAllen and TCS provided the Applicant’s services to QBE.

QBE relies on the following documentary material:

(a) Emails sent on 14 March 2012 by the Applicant to her then lawyers, BD Lawyers;

(b) Employment contract signed with PorterAllen on 8 February 2011;

(c) Bank statements of accounts held in the Applicant’s name disclosing amounts deposited by PorterAllen and TCS up until 29 August 2022;

(d) Assignment Schedule from TCS to the Applicant (undated); and

(e) Time sheets completed by the Applicant on PorterAllen and TCS letterheads.

The Assignment Schedule from TCS to the Applicant which is undated refers to the client as QBE and a start and end date for the assignment from 25 July 2011 to 17 December 2011. The statements for an account in the Applicant’s name produced by IMB Banking and Financial disclose that payments were made to the Applicant by PorterAllen until the end of July 2011. 20 The statements for an account in the Applicant’s name produced by Community First Credit Union disclose payments made to the Applicant by TCS up until 24 August 2011, following which payments are made by QBE.21

In an email dated 14 March 2012 to her then lawyers, the Applicant said:

“17th June 11 paid by PorterAllen as a contractor

May 12 employed and paid by QBE as a contractor

Sept 11 was put on new contract which included holidays etc”

On 17 August 2011, the Applicant was offered a ‘Full-Time Appointment - Claims Officer’. The letter of offer stated in part:

“Further to our recent discussion, on behalf of QBE Management Services Pty Limited (QBE), I am very pleased to confirm your continued employment and your appointment to the full-time position of Claims Officer.

This letter should be read in conjunction with the attached Schedule. These documents together constitute your contract of employment with QBE.”

Commencement

This contract commences 29 August 2011 and will continue until terminated or otherwise varied in accordance with this contract. From the date of commencement, this contract supersedes and replaces all previous contracts and arrangements in relation to your employment with QBE. Recognition of your prior service with QBE and accrued but untaken entitlements are not affected by this contract.

The Fraud Allegations

The documentary material QBE relies on in relation to its allegation is set out below. It is to be noted the substance of this factual material was referred to by QBE in their costs letter (dated 7 May 2012) and is set out in detail in QBE’s Outline of Submission and witness statements filed between 16 - 18 May 2012.

It must be emphasised that, in considering the factual material, I am not making any findings as to whether the Applicant engaged in the conduct alleged by QBE, rather, I am directing myself as to whether I can be satisfied, having regard to the material and the Applicant’s written submissions (see [7]), that:

● The Applicant made the application vexatiously or without reasonable cause (s.611(2)(a)); or

● It should have been reasonably apparent to the Applicant that her application has no reasonable prospect of success (s.611(2)(b)).

The documentary material is as follows:

(a) Numerous transactions for various insurance claims made over the period September 2011 to February 2012 which were not authorised (unauthorised transactions). These are summarised in a spreadsheet which sets out:

● The date of the transaction and policy number;

● The amount of the transaction;

● The bank account that the payments went into;

● The claims officer responsible for the transaction; and

● The email address that the remittance notice was sent to. 22

(b) The Applicant is listed as the policy officer responsible for most of the transactions;

(c) The unauthorised transactions were deposited in various Commonwealth Bank Accounts 23 and a Citibank Account (the Citibank account);24

(d) The record of the Citibank Account discloses the account is in the Applicant’s name, and a residential address, 25 which accords with the Applicant’s residential address recorded on FWA files in this matter. The copy of the application filed for the purpose of opening the account is in the Applicant’s name and records the Applicant’s residential address;26

(e) The CBA accounts are in the name of a person who will be referred to as ‘Sarah P’ (Sarah P CBA Accounts). The postal addresses for each of the Sarah P CBA Accounts 27 are the same postal address for an account, a Community First Bank Account in the Applicant’s name, into which QBE deposited the Applicant’s salary;28

(f) The Citibank Account was opened on 18 August 2011. Four of the unauthorised transactions were deposited in the Citibank account as follows:

● On 5 October 2011 a payment was processed 29 in the amount of $7,073.80, being one of 18 transactions of that same amount to a named payee, ‘Mr M’. This transaction was deposited in the Citibank account on 10 October 2011.30 Sixteen (16) of the transactions of the same amount were deposited in one of the Sarah P CBA Accounts;31

● On 17 and 19 October 2011, two payments were processed 32 in the amount of $3,198.00, being two of five transactions of that same amount to a named payee, ‘Mr M’. These two transactions were deposited in the Citibank account on 20 and 24 October 2011 respectively.33 Three of the transactions of the same amount ($3,198.00) were deposited into the Sarah P CBA Accounts;34

● On 24 October 2011 a payment was processed 35 in the amount of $5,938.45, being one of six transactions of that same amount to a named payee, ‘Mr M’. This transaction was deposited in the Citibank account on 27 October 2011.36 The remaining five transactions of the same amount ($5,938.45) were deposited in the Sarah P CBA Accounts;37

(g) The remittance notices for the unauthorised transactions were mainly sent to an email address, ‘[email protected]’. 38 An email was sent from the Applicant’s QBE email address to [email protected] on 29 September 2012.39 This email attached a number of documents including a Community First Bank, ‘Full Transaction History document’. The name on the transaction attached to the email is ‘Ms Sarah P’. The account number specified on the Full Transaction History is identical to the member number of the Community First Bank into which QBE deposited the Applicant’s salary;40

(h) One of the remittance notices was sent to the Applicant’s QBE email address; 41

(i) The Applicant sent numerous emails to Sarah P in the course of her employment with QBE. 42 The content of the emails are of a personal nature;

(j) On 15 December 2011 a payment of $15,000 was made from one of the Sarah P CBA Accounts to a Westpac Mastercard account number ...044 held in the name of Mr E Stanley. 43 Mr Stanley’s residential address recorded on the account is the Applicant’s residential address. The amount was deposited on 15 December 2011;44

(k) Records from an online fashion retailer, Specialty Fashion Group, disclose that an online account existed in the Applicant’s name, with the Applicant’s residential address 45 (as recorded in the FWA file) with an email address which is identical to the email address for the Applicant recorded in the FWA file. On 6 November 2011, goods valued at $704.60 were purchased using the online account46 and paid for from one of the Sarah P CBA Accounts.47 The delivery address for this order was the Applicant’s residential address. On 16 November 201148 and 3 January 201249 some of the goods purchased on 6 November 2011 were refunded by Specialty Fashion with the refund payments paid into the Sarah P CBA Accounts on 18 November 201150 and 5 January 2012;51

(l) On 15 December 2011, a deposit of $10,000 was made into the Citibank account. 52 The deposit is recorded as a direct credit from a name including the names Sarah P. On 16 December 2011, a net bank transfer of $10,000 was made from one of the Sarah P CBA Accounts;53

(m) On 16 December 2011, a deposit of $700 was made in the Citibank account. 54 The deposit is recorded as a direct credit from a name including the names Sarah P. On 16 December 2011, a net bank transfer of $700 was made from one of the P CBA Accounts;55

QBE also rely on previous convictions on 9 May 2011 against the Applicant for obtaining money by deception and, dishonestly obtaining financial advantage by deception for which the Applicant received suspended sentences. I have disregarded this material for the purpose of determining this application.

Applicant’s Submissions

In her written submissions, the Applicant states in respect of the fraud allegations:

(a) She has not been a Citibank customer for over 7 years. ‘The account you state is mine is not and is under investigation by the relevant authorities’;

(b) She did not have authority to authorise payments. The authority rested with management;

(c) Some of the list of payments made were made on weekends and days the Applicant was not working;

(d) She was not working on the day she is alleged to have sent the email to [email protected] email address;

(e) She has not been charged or questioned in relation to allegations made, by police or any other authority.

In her witness statement filed for the purpose of the substantive hearing, 56 the Applicant described an interview conducted on the day she was summarily dismissed (15 February 2012). Her description of the matters canvassed by QBE representatives referred to questions as to:

(a) Whether she was a holder of Commonwealth Bank Account which it was alleged duplicate payments were made into. This was denied by the Applicant; 57

(b) Whether she knew a person, whose name appeared on the [email protected] address. This was denied by the Applicant; 58

(c) Whether she knew a person, ‘Sarah P’. The Applicant said she did not know a Sarah connected with this. 59

The Applicant stated she only had two bank accounts, one with Community First Credit Union, the other with IMB. 60

Consideration

Harrasment

I am not satisfied that any of the material relied on by QBE amount to harassment. The emails to the Human Resource Manager are in reality communication by an employee, clearly upset, about her rights. The emails to Minter Ellison and texts to QBE employees are to be seen in context; namely, attempts by QBE to ascertain details of and attendance by QBE employees at court proceedings the Applicant was involved in.

It follows that I am not satisfied that the Applicant made the application vexatiously on the basis of this material. I deal with the question as to whether the application was obviously untenable below.

Minimum Employment Period

I am not satisfied, with respect to the jurisdictional issue based on the minimum employment period, that the Applicant made the application without reasonable cause or that it was reasonably apparent to her she had no reasonable prospect of success, for the reasons set out below.

The email from the Applicant to her lawyers exposes confusion on the Applicant’s part as to the details of her employment arrangements.

Balanced against the evidence of the labour hire companies making payments into her bank accounts is the wording of the contract offered to the Applicant on 17 August 2011 by QBE which in its term is suggestive of an ongoing employment relationship prior to that date.

I take notice of the fact that it is not uncommon for Applicant’s to confuse labour hire arrangements with a client as being an employment relationship with the clients.

It is relevant that QBE did not raise the Applicant’s employment period as a jurisdictional issue until sometime after the Applicant’s application for unfair dismissal remedy had been filed.

I am not satisfied that the Application was so obviously untenable when the Applicant made the application. Nor am I satisfied that on the Applicant’s version of the facts, it was clear the proceedings must fail.

There in an obligation on a Respondent, who wishes to raise a jurisdictional objection to do so at the earliest time so that costs are not incurred in preparing for a substantive hearing. QBE is not a small employer and one could expect it to have access to specialist and dedicated human resource management which would have the knowledge and expertise to identify jurisdictional bars to FWA dealing with an unfair dismissal claim.

It is true that in the Form 3 QBE completed it recorded an employment period for the Applicant of less than 6 months. However, it failed to press, what is said on its behalf in submission an obvious issue, by the completion and filing of a Form 4 - Objection to Application for Unfair Dismissal Remedy - or at Conciliation. The jurisdiction issue was ‘foreshadowed’ in correspondence sent by QBE’s lawyers to the Applicant’s then lawyers (16 May 2012) and expressly in QBE’s Outline of Submission filed on 18 May 2012. A request was made to have the jurisdictional matter determined first.

I have had regard to the fact that, after 18 May 2012, the Applicant was unrepresented. I accept there were references made by the Applicant in her email correspondence, after this time, to the fact she was instructing new lawyers 61 which took some time to eventuate. However, the fact is the Applicant remained unrepresented after 18 May 2012.

I am also satisfied and have regard to the fact that it was not until the Mention conducted by FWA on 1 June 2012 that it was reasonably apparent to the Applicant there was an issue that would have the effect, if successfully prosecuted by QBE, of defeating her claim, irrespective of the merits.

Although the jurisdictional objection was raised by QBE in its Outline of Submission on 18 May 2012, the evidentiary basis of the jurisdictional objection was set out in detail in QBE’s submission on the jurisdictional question filed on 15 June 2012.

I am satisfied that having read this submission it would have been reasonably apparent to the Applicant that she had no reasonable prospect of success.

The Applicant filed a Notice of Discontinuance on 21 June 2012.

Fraud allegation

I am not satisfied that on the Applicant’s own version of the facts it was clear the proceeding must fail: see Kanan’s case (supra).

I note that the Applicant has and continues to deny any allegation of fraud and has, in her written submissions, denied that the Citibank account is her account. It is relevant that there have not been any findings of fact by FWA or Court on this issue.

Whilst the Applicant has not provided any evidence or further material to FWA which would in some way fortify her version as to the ownership of the Citibank account, on balance I find her application for unfair dismissal remedy was not made without reasonable cause.

I am, however, satisfied having regard to the documentary material that it was reasonably apparent to the Applicant that she has no reasonable prospect of success and that this circumstance applied at the time the Applicant made her application.

I have had regard to the fact that, particularly where there has been no finding in FWA or other jurisdictions, a conclusion that the Applicant had no reasonable prospect of success must be exercised with extreme caution. However, in this case the documentary material relied on by QBE and set out in detail at [33] above falls, in my opinion, within the concept of unanswerable evidence of facts fatal to the Applicant’s case (see Re Spencer (supra)).

True it is that the Applicant, in her written submissions, has denied the Citibank account is hers. However, the test is an objective test, directed to a belief formed on an objective basis (see Baker (supra)). The Applicant has not provided evidence of any kind of any investigation into identity fraud. Further, her failure to attend the costs hearing and provide evidence as to the basis for her denial means that the question as to whether her belief that the Citibank account is not hers was reasonable, in the face of a detailed body of documentary material to the contrary, 62 remain untested. The Applicant’s denials are no more than an assertion of a subjective belief.

It is to be noted that the Applicant did not refute, in her written submission that there existed a relationship between her and the person identified in this decision as Sarah P nor address factual material regarding the deposits made from the Sarah P CBA account into the Applicant’s Community First Credit Account.

It is significant that the Applicant, in an interview with QBE on 17 February 2012 and in her witness statement filed on 23 April 2012, denied knowledge of Sarah P. Clearly, having regard to the emails and financial transactions between the Applicant and Sarah P, this denial is baseless.

It is incontrovertible that the Applicant and Sarah P had a personal relationship as evidenced by the numerous emails and the content of those emails between the two, and the payments from Sarah P CBA Accounts to the Applicant. On the documents available it can be concluded these facts were known to the Applicant at the time she made her application. There is also no doubt that the post office box address for the Sarah P CBA Accounts and the Applicant’s Community First Credit Account are the same and that numerous unauthorised payments were made into the Sarah P CBA Accounts.

There is then the issue of the Applicant’s knowledge of, or relationship with, the email address identified in this decision as [email protected]. The Applicant denied in her written submission that she was at work on the day the documents show an email was sent from the Applicant to [email protected]. In response, QBE filed in FWA a copy of a screen dump of records of leave taken by the Applicant for the period 17 June 2011 to 15 February 2012. This does not record leave taken by the Applicant on 29 September 2011. 63

Also filed were a copy of records of the Applicant’s pay slip for the week ending 30 September 2011, which is said to show that the Applicant worked her full 72.5 hours for the fortnight ending 30 September 2011 and copies of emails sent by the Applicant under her QBE email address to other recipients (including clients and other employees) dated 29 September 2011. These disclose that, at the very least, the Applicant had access to her QBE email address on that day.

I am not satisfied that the Applicant has or had a reasonable belief or an objective basis for her written submission that the Citibank account is not hers. In addition, it is clear the Applicant was not truthful in the interview with QBE on 5 February 2012 and in her witness statement filed on 23 April 2012, when she denied knowing a Sarah P.

The consequence is that the fact of the deposits of large sums of unauthorised transactions into the Citibank account and the transfer of monies from Sarah P’s CBA Accounts into accounts held by the Applicant and into the Citibank account, renders in my opinion, the application for unfair dismissal remedy so lacking in merit or substance so as to be not reasonably arguable. I agree with QBE that any deficiencies in procedure could never overcome the incontrovertible documentary evidence.

I am satisfied that it was reasonably apparent to the Applicant at the time she made her application, that there was no reasonable prospect of success. I am further satisfied that in the circumstances of this case I should exercise my discretion under s.611 of the Act by determining that the Applicant must bear the costs incurred by QBE from the date she made her application, 28 February 2012.

I defer the question of the quantum of costs to be ordered for further a hearing. QBE submit that any costs should be on an indemnity basis. Given the failure of the Applicant to attend the hearing and my decision to refuse the Applicant’s adjournment, the question whether costs should be awarded on an indemnity basis is also deferred for a further hearing.

Conclusion

For the reasons set out in this decision, I have decided that a Costs Order shall be issued, ordering the Applicant to pay the costs of QBE from 28 February 2012.

The quantum of costs to be awarded and the question of whether costs should be awarded on an indemnity basis shall be determined following a further hearing before FWA. Directions for this hearing will be issued shortly.

COMMISSIONER

Appearances:

Ms E. Raper of Counsel - QBE Management Services Pty Ltd

Hearing details:

2012

Melbourne

August, 24

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