Stephen Brooker v Autolync T/A Autolync

[2017] FWC 5108

[2017] FWC 5108

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Stephen Brooker
v
Autolync T/A Autolync
(U2017/921)

COMMISSIONER WILSON MELBOURNE, 11 OCTOBER 2017

Application for costs.

[1] A decision dismissing Stephen Brooker’s application for an unfair dismissal remedy was published on 15 June 2017. 1 The decision which sets out the reasons for dismissal of Mr Brooker’s application is referred to as the Jurisdictional Decision. Subsequent to the Jurisdictional Decision, the Respondent in that matter, Autolync Pty Ltd, made an application to the Fair Work Commission for an order for costs pursuant to sections 400A and 611 of the Fair Work Act 2009 (the Act) against Mr Brooker (referred to as the Costs Application). The Costs Application relates both to the costs associated with the Jurisdictional Decision as well as the costs in advancing its application for costs.

[2] This decision concerns Autolync’s Costs Application.

[3] As stated above, Mr Brooker’s application for unfair dismissal was dismissed by me for reason of my finding that he had not completed the minimum period of employment at the time of the termination of his employment.

[4] A hearing in relation to the Costs Application was held by me on 20 September 2017, at which Autolync was represented by Kelly Ralph, solicitor and Mr Brooker was represented by Peter Hull, solicitor. Autolync had been given permission for representation in the hearing conducted for the Jurisdictional Decision, which I considered appropriate to continue, and Mr Brooker sought and was granted permission for legal representation because I was satisfied of each of the criteria within s.596(2) of the Act.

BACKGROUND TO THE COSTS APPLICATION

[5] As amended by Autolync, its Costs Application is premised on the basis of “an unreasonable act or omission” of Mr Brooker in connection with the making and continuation of his unfair dismissal application (s.400A) as well as that he made the application “without reasonable cause” with it having “no reasonable prospect of success” (s.611). In the hearing of the matter Autolync confirmed it does not argue that Mr Brooker’s application was commenced or continued vexatiously (s.611(2)(a)).

[6] Mr Brooker first performed work of some description for Autolync on 1 December 2011. In the Jurisdictional Decision the Commission found that until 30 November 2015 Mr Brooker was an independent contractor to the company and that from 1 December 2015 he was an employee. In the course of a telephone conversation on 22 November 2016 between Mr Brooker and Mr Courtney Smith, Mr Brooker resigned. Mr Brooker’s resignation was not a “heat of the moment resignation” which was not actively disputed until 7 December 2016. Mr Brooker’s resignation was accepted by the Company by no later than 29 November 2016. 2

[7] Mr Brooker came to make an unfair dismissal application to the Commission on 30 January 2017 after certain exchanges between him and Mr Smith did not lead to a retraction of the company’s acceptance of the resignation. The last of those communications between Mr Brooker and Mr Smith were in mid-January and Mr Brooker says about that situation that he believed he was still employed until 29 January 2017 and that it was only toward the end of January 2017 that he became aware he was not going to return to the workplace. The trigger for him forming that belief was that he had received no response to his last correspondence to Autolync. 3

[8] When Autolync responded to Mr Brooker’s unfair dismissal application it identified four objections to the continuation of his application, in particular that it was out of time; that he was not dismissed; that he had not been employed for the minimum employment period; and finally that being a small business Mr Brooker’s dismissal, if there was one, was consistent with the Small Business Fair Dismissal Code.

[9] The matter progressed to a conciliation on 2 March 2017, however the matter was not settled and it was allocated for a jurisdictional hearing to take place on 10 April 2017. Directions were issued for the filing of outline of submissions and witness statements from both parties with the Respondent to file by 17 March 2017 and Mr Brooker by 27 March 2017. Pro bono assistance was offered to both parties on 9 March 2017.

[10] The matter progressed to a hearing on 10 April 2017 and a decision was issued by the Commission in the matter on 15 June 2017. The focus of the Jurisdictional Decision was on two elements only; namely whether Mr Brooker had been a contractor prior to 1 December 2015 (with it being found that he was) and whether, in the light of that finding, he had served the minimum employment period. In relation to the latter question, it was found that Mr Brooker had not completed the minimum employment period for reason that he had resigned his employment with his resignation being accepted by Autolync by no later than 29 November 2016. His period of employment was therefore slightly short of the minimum period of employment, which in his case was 12 months. Because of those findings there was no necessity for the Commission to consider whether an extension of time was required for the making of Mr Brooker’s unfair dismissal application.

[11] In preparation for hearing and determination of the Costs Application, the parties were required to file such additional material as they saw relevant.

[12] Within its material Autolync has disclosed that offers for settlement of Mr Brooker’s application were made by them at two relevant points. The first was before the hearing associated with the jurisdictional matters and the second after the decision on those matters but before the Costs Application had been made to the Commission.

[13] In relation to the offer made prior to the jurisdictional hearing Autolync wrote to Mr Brooker on 16 March 2017 drawing to his attention to its contention that he had resigned and that he had not completed the minimum employment period and that as a result it should be reasonably apparent to him that his application had no reasonable prospect of success. It was further argued that his application would also fail since it was made outside of the permitted timeframe for making such an application. Through its correspondence, Autolync drew to Mr Brooker’s attention that continuation of the matter risked a Costs Application from it in the event he did not succeed on the jurisdictional arguments.

[14] In its 16 March 2017 letter Autolync put forward a proposal that Mr Brooker settle his application for the payment by them of $13,500 gross, which it stated was equivalent to 6 weeks’ pay. Mr Brooker was given until 20 March 2017 to consider and accept this proposal.

[15] Mr Brooker’s response, given on 17 March 2017, was to refuse the offer for settlement, putting forward a counterclaim of sorts to the effect that if he had actually been an employee prior to 1 December 2015 he would be entitled to make a claim of greater than $51,000 in unpaid superannuation contributions and further that Autolync risked a claim from the workers compensation insurer for premiums for the time he had been nominally an independent contractor. In stating those things, he said he reiterated his “willingness to settle the matter privately with no further action should a suitable agreement be made”. 4

[16] In addition to these matters, on 31 March 2017, and in preparation for the jurisdictional hearing on 10 April 2017, I wrote to the parties with a preliminary analysis of the material that had been filed to date (the Preliminary Analysis), drawing to the parties’ attention a number of matters for their consideration as well as asking certain questions, both matters being an endeavour to narrow the contest between the parties. Relevantly, in respect of the question of extension of time, the Commission put forward the following:

“[6] While I understand the contention that Mr Brooker puts forward that he did not resign, and that clarification about his employment status was only provided on 29 January 2017, there is both no meaningful engagement within his material with the Respondent’s contention that he resigned in the course of the a (sic) telephone call with Courtney Smith on 22 November 2016 (Courtney Smith, 25) or with the events that are then said by Mr Smith to have occurred after that time; as well as there being no elaboration or provision of documentary evidence as to his contention that his employment status was not clarified until 29 January 2017 (Brooker, EOT, 2). That is at this time I can see nothing that supports the contention that the termination of employment did not occur until 29 January 2017.

[7] If Mr Brooker maintains the position that he was not aware of the termination of employment until 29 January 2017, that will be a matter to be determined on the evidence before the Commission. While that will primarily be a matter of Mr Brooker’s own evidence it will also include having regard to the mutual conduct of the parties in the period between the date it was contended a resignation occurred and the date contended for notification of the termination. In the alternative, if the termination of employment occurred during November or December 2016, then Mr Brooker will need to provide cogent reasons as to why the application for unfair dismissal remedy was only lodged at the end of January 2017. It is insufficient for an applicant to rely on the Commission to either locate the date when employment finished or find the reasons for a late lodgement. Instead it is up to the applicant to put forward evidence about the date on which termination occurred as well as the reasons for a late lodgement if the evidence takes the Commission in the direction of there having been an earlier termination rather than a later one.

[8] Mr Brooker should be aware that, in the event a finding is made by me that termination of employment occurred in November or December 2016, that I have insufficient material before me at this time to make a finding in his favour regarding the reason for the delay in making an application, which is the criterion in s.394(3)(a).”

[17] Nothing of substance was put forward in my 31 March 2017 correspondence in relation to the question of the minimum employment period. Instead the analysis drew attention to the approach that would be applied by the Commission in resolving the question of whether Mr Brooker was an independent contractor or employee in the relevant period and indicating that in most respects there was already sufficient material filed about that question, other than in two respects. The correspondence also posed certain questions to the parties and invited them to provide further information before the hearing. The Preliminary Analysis noted that in order for the Commission to make a decision on the question of the minimum employment period it would need to analyse not only the matter of whether or not Mr Brooker had been a contractor prior to 1 December 2015, but also the question of when and how the termination of employment came about.

[18] The settlement offers made after the Commission’s Jurisdictional Decision surrounded an intimation by Mr Brooker that he was considering appealing the decision. Autolync put forward to Mr Brooker that as an alternative it was prepared to forego an application to the Commission for costs, both in respect of the Jurisdictional Decision as well as the running of any costs application, if Mr Brooker confirmed he would not appeal the Jurisdictional Decision and enter into a release agreement which Autolync’s solicitors would prepare and provide to him.

[19] Material provided to the Commission after the Jurisdictional Decision and in preparation for the hearing of the Costs Application showed there to be a considerable ongoing dispute between Mr Brooker and Autolync and its owners in respect of Mr Brooker’s investment in a related entity. It would appear from the material provided to the Commission that Mr Brooker’s concerns about those matters were fundamental to his approach at least to the offer for settlement made after the Jurisdictional Decision, if not also to the offer made in March.

LEGISLATION

[20] 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.”

[21] Relevantly, section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides;

“168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC’s power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award costs is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party.”

[22] Section 611 of the Act provides 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 of the 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).”

CONSIDERATION

[23] The Commission’s power to award costs under this provision of the Act is discretionary. There is also a requisite causal link between the act or omission and the costs being incurred.

[24] Section 400A of the Act allows for costs orders to be made if the Commission is satisfied that costs were incurred because of an unreasonable act or omission of a party in connection to the conduct of the case. An unreasonable act or omission includes one which was either deliberate or reckless. 5 A failure to consider the possible settlement of a matter may be unreasonable, but is not necessarily so,6 as may be unreasonably failing to discontinue an unfair dismissal application.7 A “warning” provided to a party about the prospects of their case may be relevant to the assessment of whether the continuation of a matter was reasonable.8

[25] Section 611 of the Act allows for an order to be made for the payment of costs if the Commission is satisfied that a party’s application or response to an application was vexatious, without reasonable cause or if the Commission is satisfied that the application or a party’s response to an application had no reasonable prospect of success.

[26] As a general rule each party must bear their own costs in proceedings before the Commission. 9 It has been held in respect of s.611(2)(a) that the legislative intention under the section was for the power to order costs to be exercised where there is clear evidence of unreasonable conduct and that the power to order costs under the section should be exercised with caution and only in clear cases.10 Further, a party cannot be said to have made an application “without reasonable cause” within the meaning of s.611(2)(a) simply because his or her argument proves unsuccessful. The Full Bench has indicated that the test imposed by the expression “without reasonable cause” is similar to that adopted for summary judgment, that is, “so obviously untenable that it cannot possibly succeed”, “manifestly groundless” or “discloses a case which the Court is satisfied cannot succeed”.11 An application will have been made vexatiously “where the predominant purpose ... is to harass or embarrass the other party, or to gain a collateral advantage”.12

[27] Throughout the life of Mr Brooker’s application to the Commission his case depended upon three necessary findings as follows;

• a finding either that he had not been an independent contractor before 1 December 2015 or, that if he was, he was dismissed within the meaning of s.386 of the Act after 1 December 2016; and



• a finding that he did not resign but instead was dismissed; and



• a finding either that the date his dismissal took effect was on or before 9 January 2017 (being 21 days prior to the actual lodgement date) or that if the date of dismissal was earlier, there were exceptional circumstances that would allow an extension of time pursuant to s.394(3) of the Act.

[28] The first of these questions, dealing with the question of the minimum employment period, surrounds the engagement status of Mr Brooker prior to 1 December 2015. The nature of the Commission’s determination on the question would involve a clinical analysis of past facts in accordance with the established indicia. While an objective analysis, the nature of the task to be undertaken, involving an assessment of many criteria, would likely have a level of uncertainty about the outcome for both, since it involved first making findings of fact and then applying standard indicia to those facts. Success for Mr Brooker would require the Commission re-characterising an otherwise mutually settled independent contractor relationship as an employment relationship.

[29] The second and third of these questions, referring to whether Mr Brooker was dismissed and the date upon which that occurred, were always likely to be problematic for him since each depended on findings about things discussed in conversations between two people, ultimately needing to be resolved by the Commission after considering and weighing all of the evidence of the witnesses.

[30] In order to be successful on both the second and third questions Mr Brooker would need to persuade the Commission that the things said or done by him and either Mr Smith or Ms Kasie Smith would reasonably lead to the view that his dismissal was a termination at the initiative of the employer or that a resignation on his part arose out of conduct, or a course of conduct engaged in by Autolync (which are the criteria within s.386).

[31] Mr Brooker’s case about the date of his dismissal (relevant to the third question) shifted over the course of the proceedings. His original application form stated that the date his dismissal took effect was 29 November 2016 and answered “no” to the question “Are you making this application within 21 calendar days of your dismissal?” The submissions he filed after the Respondent’s jurisdictional objection was disclosed put forward that he contested his “alleged resignation” until 29 January 2017, implying that that date was the date of dismissal. His response to the Commission’s Preliminary Analysis document of 31 March 2017 did not directly identify the date of termination.

[32] A footnote in Mr Brooker’s submissions to the costs hearing about the date of termination sets out his position on the matter;

“Mr Brooker’s apparent assertion to the contrary, at point 1.3 of his Form F2 Application, that the effective date of termination was 29 November 2017, arose though a misunderstanding of the question. Mr Brooker explained his misunderstanding at the 10 April 2017 determinative conference.” 13

[33] While that submission is consistent with how the matter proceeded, it nonetheless illustrates the shifting position over time about a relatively straight forward question.

[34] Both the questions of when Mr Brooker’s employment ended, and what, if anything was to be said about the reasons for a late application, if that was necessary, were always going to be issues of some challenge for Mr Brooker to meet. Faced largely with evidence consisting of conversations as well as some less-than-clear email correspondence, the persuasive task faced by him surrounded a need to cogently show the Commission both that he had no intention of leaving his employment and that in any event he did not leave until mid or late January or that he had exceptional circumstances that would lead to an extension of time being granted.

[35] By at least 16 February 2017, when Autolync responded to Mr Brooker’s unfair dismissal application, he was aware that Autolync contested the jurisdictional basis of his decision. Reasonably, even at that time, an informed applicant would likely have been aware that their application had some level of question about the extent to which it would succeed. However, so far as I am aware, Mr Brooker was unrepresented at the time of Autolync’s response to his unfair dismissal.

[36] By 16 March 2017 though, Mr Brooker was challenged by Autolync about the overall reasonableness of his claim and his prospects of success, with the Respondent putting forward that it considered his application had no reasonable prospect of success as well as it being made outside of the time period allowed for within the Act and that if he maintained his application despite the company’s incentive for him to settle, he may open himself up to a claim for costs if ultimately his application was unsuccessful.

[37] On 31 March 2017, still more than a week prior to the hearing about the jurisdictional matters, Mr Brooker received the Commission’s Preliminary Analysis document which indicated that I could “see nothing that supports the contention that the termination of employment did not occur until 29 January 2017” and that at that time I had insufficient material before me to make a finding in his favour for an extension of time.

[38] Autolync’s Costs Application is dependent not only upon the proposition that Mr Brooker had commenced his application unreasonably and that it had no reasonable prospect of success, but also that the costs to be recovered are the costs of its legal representation, as well as some incidental costs associated with the attendance of “witnesses” (relevantly only Mr and Ms Smith) at the proceedings on 10 April 2017.

[39] In all the circumstances, I am unable to find that Mr Brooker commenced his unfair dismissal application unreasonably. There is no evidence before me that would lead to a finding that he should have been aware that his case was “incompetent or hopeless”. 14

[40] However, I consider that at some point between the time Autolync’s solicitors wrote to Mr Brooker on 16 March 2017 drawing his attention to his potential costs liability and proposing settlement of the matter and 31 March 2017, being the date upon which the Commission’s Preliminary Analysis document was provided to the parties, which identified the potential difficulties with any argument that may be required for an extension of time, that Mr Brooker should reasonably have been aware that the legal basis of his application for unfair dismissal remedy was weak in several respects.

[41] Further, I take into account that the offer for settlement made by Autolync on 16 March 2017 was a considerable one.

[42] I also take into account that the Commission’s Preliminary Analysis document was provided to the parties at 3.57pm on Friday 31 March 2017, and that the weekend may well have been needed for Mr Brooker to digest and act upon its content.

[43] By no later than the Monday following 31 March, the combination of the uncertainties about the basis of his claim, together with a generous offer for settlement, should have motivated a reasonable applicant to consider whether the application should be maintained. A reasonable person would assess the offer after considering all the circumstances of the case, including the terms of the settlement proposal and the relative strengths of the parties’ cases. 15

[44] The Commission has accepted that there may be circumstances in which the failure to accept an offer for settlement may be unreasonable. I consider in the circumstances of Mr Brooker’s case that such was the situation. In light of what was offered and the challenges he faced to win his case, it was unreasonable for him to simply dismiss the possibility of settlement when it was put forward by the Respondent in March 2017. When he did that, he did so by essentially changing the subject from that of what it would take to settle his unfair dismissal application to a claim that if he was actually an employee prior to 1 December 2015 he may be entitled to $53,000 in superannuation payments and Autolync may be subjected to the need to pay many more thousands of dollars for workers compensation insurance that arguably should have been paid during the time he was treated as being an independent contractor. He also failed to say precisely to Autolync what it would take to resolve the dispute, despite having a “willingness to settle the matter privately with no further action should a suitable agreement be made”. The way that this was done is not just a matter of “hard bargaining”, about which the Full Bench has said;

“[25] Roy Morgan is entitled to engage in hard bargaining. However, its conduct goes beyond hard bargaining and into the realm of a refusal to reasonably assess and respond to a clear statement from the Fair Work Commission (the Commission) in the stay order decision that its prospects on appeal were weak and barely arguable. Further, Roy Morgan knew or should have known that the prospects on appeal were not merely weak and barely arguable, but that there was no evidence put during the proceedings to support its contention that the requirements of ss.389(1)(a) and (b) of the Act were satisfied.” 16

[45] As a result of the foregoing, I find that the continuation of Mr Brooker’s application for unfair dismissal past the time of the Commission’s advice to him was an unreasonable act in connection with the continuation of the matter, within the meaning of s.400A of the Act. Because of this an order for costs under that section may be appropriate.

[46] I do not find that the provisions of s.611 of the Act would also support an award of costs, and do not consider it appropriate to find that the application was made without reasonable cause or that it had no reasonable prospect of success.

[47] A proceeding “is not classed as being instituted without reasonable cause simply because it fails, but rather in circumstances where the applicant’s own version of the facts, it is clear that the proceeding must fail”. 17 Another “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”.18

[48] In relation to the apparent prospects of success, the Full Bench has held that;

“The concepts within s.611(2)(b) of the Act “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.” 19 (references omitted)

[49] I consider that Mr Brooker’s case in respect of the date of termination at least held some prospects of success, albeit being dependent on persuading the Commission to accept that his resignation had not been accepted and that because of his interactions with Autolync in December 2016 and January 2017, his contract of employment continued through that period as well.

[50] Autolync put forward that the appropriate cost order to be made by the Commission should be an order for indemnity costs.

[51] The Commission has accepted that indemnity costs may be awarded in certain circumstances. Having found that an applicant had behaved unacceptably before him and had harassed a respondent, with their application coming “perilously close” to being an abuse of process, and the applicant having “deliberately and knowingly misled” another Commission member an award of indemnity costs was discussed by Deputy President Sams in the matter of Fadheel v Douglass Hanly Moir Pathology Pty Ltd;

“[59] Having been well satisfied that a costs order should be made against the applicant, it only leaves the question of whether costs should be ordered on an indemnity basis.

[60] The Commission is mindful of the principles to be applied to costs applications on an indemnity basis and the caution the Commission must exercise in this regard. Such costs orders are rare and unusual.

[61] In Dye v Commonwealth Securities Limited (No 2) [2012] FCA 407, Buchanan J identified one of the foundations for an order of indemnity costs may be on the basis of the findings made in the earlier judgment that the applicant’s case was, in all relevant aspects, based on a falsehood. His Honour said at para [5]:

‘Each of these foundations appears to me to provide a sufficient basis for the award of indemnity costs from the dates specified. As to the first basis upon which indemnity costs have been sought, it is well-established that indemnity costs are not awarded as a punishment against an unsuccessful litigant. However, they will be awarded in appropriate cases to protect a respondent from the financial burden of proceedings which were unjustified and should not have been commenced. Each of the proceedings commenced by the applicant falls, in my view, into this category. In the present case, the lack of merit in each of the proceedings is so marked, and the claim for protection by the respondents against unwarranted financial burden is so well-founded, that there is a sufficient justification for the award of indemnity costs with respect to the whole of each of the proceedings, subject to an issue to which I will return concerning the basis on which the Supreme Court proceedings were transferred to this Court. It is not necessary for me to repeat here the findings which were made in the earlier judgment. The proceedings were, in each case, based on falsehood and were without any legal substance. The respondents are entitled to claim that they should be relieved, so far as an order for costs would achieve this, from the financial burden of defending them.’ (My emphasis)” 20

[52] DP Sams found that the application he was determining had no prospect of success, was groundless and futile and was an abuse of process. 21

[53] In this matter the Respondent points to the purpose of indemnity costs in cases where there may have been a “relevant delinquency” on the part of an applicant;

“It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a “solicitor and client” basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.” 22

[54] Commissioner Jones, as she then was, ordered indemnity costs for at least part of the proceedings in the matter of Stanley v QBE Management Services finding that a failure to discontinue an application after it was reasonably apparent to an applicant that she had no reasonable prospect of success amounted to a delinquent act on her part.  23 Deputy President Kovacic found in another QBE case, Abdulrahim v QBE Management Services, that an applicant should not have continued their case beyond the point that they realised their matter had no reasonable prospect success and that it was delinquent to do so and that indemnity costs should also be ordered.24

[55] I consider Mr Brooker’s case to be distinguishable. It is not the case that it could be said his application would fail on his version of the facts. While it could, of course, be said that his prospects of success were not great, neither were they so hopeless as to be not pursued at all.

[56] Accordingly, the application for indemnity costs is refused.

[57] In respect of the finding I have made pursuant to s.400A of the Act, I consider that it is appropriate to exercise my discretion to make an order for costs. In the circumstances of Mr Brooker’s case, I consider the costs he should bear are in relation to Autolync’s party – party costs of responding to the matters in issue in the Jurisdictional Decision, but only from Monday, 3 April 2017, being the first business day after circulation of the Commission’s Preliminary Analysis document.

[58] The Respondent also makes a claim for costs associated with the making of its Costs Application. I refuse the application.

[59] After the Jurisdictional Decision, the Respondent put forward to Mr Brooker a proposal that would obviate a Costs Application, being that he undertake not to appeal the Jurisdictional Decision as well as signing a release agreement which it would provide to him.

[60] The material before the Commission indicates that Mr Brooker accepted that proposition and proceeded to work with the Respondent’s solicitors for a mutually agreeable release agreement. Negotiations over a release agreement broke down, it seems, over the proposition put forward by Mr Brooker that the release should only be in respect of his contract of employment with Autolync and not in relation to any other matters about which he may be dealing with Autolync, including the shareholding he still has in a related entity.

[61] Autolync has not rebutted that proposition to the Commission and has not cogently explained why a relatively simple change to the release agreement could not be made to ensure that it unambiguously referred only to that part of their mutual relationship which would fall within the terminated contract of employment. That Autolync did not make that change was either an oversight on its part or because it wanted, despite what it had apparently said to Mr Brooker, to ensure that the release agreement dealt with the entirety of the relationship between him and Autolync.

[62] In the circumstances I am unable to find either that Mr Brooker acted unreasonably in connection with the continuation of the matter past the Jurisdictional Decision (s.400A) or that he responded to the post Jurisdictional Decision events without reasonable cause (s.611).

[63] As set out above, my decision is that Mr Brooker will pay the party – party costs incurred by Autolync associated with the Jurisdictional Decision from 3 April 2017.

[64] The parties are directed to confer upon and endeavour to agree within the next 7 days on a suitable quantum that will satisfy and give effect to this decision.

[65] In the absence of advice from the Cost Applicant, Autolync, on or before 19 October 2017 that the costs quantum has been agreed;

1. Autolync is to file and serve by no later than 19 October 2017 a Schedule of Costs incurred on and after 3 April 2017 prepared in accordance with the Fair Work Regulations 2009, Schedule 3.1—Schedule of costs;

2. Mr Brooker is directed by no later than 26 October 2017 to either confirm his agreement to the Schedule of Costs or to file and serve any objection he may wish to make;

3. If Mr Brooker objects to Autolync’s Schedule of Costs, both parties are to advise my Chambers by no later than 30 October 2017 if they are then content for the quantum of costs to be determined by the Commission on the papers.

4. If it is necessary for the quantum of costs to be determined by the Commission, they may be assessed by another Member with experience on the subject of costs.

COMMISSIONER

Appearances:

Mr Peter Hull, solicitor, for the Applicant.

Ms Kelly Ralph, solicitor, for the Respondent.

Hearing details:

2017.

Melbourne:

20 September.

 1   [2017] FWC 3244.

 2   Ibid, see [15,] [57], [65] – [67].

 3   Ibid, [55].

 4   Exhibit Autolync 2, Witness Statement of Kelly Ralph, Attachment KR-2.

 5   Goffett v Recruitment National Pty Ltd [2009] AIRCFB 626, [47].

 6   Roy Morgan Research Ltd v K Baker[2014] FWCFB 1175, [12]; with reference to Brazilian Butterfly Pty Ltd v Charalambous (2006) 155 IR 36, [39] – [45].

 7   Kube v Dominelli Group Pty Ltd T/A Rockdale Nissan[2016] FWC 8933, [15].

 8   Roy Morgan Research Ltd v K Baker[2014] FWCFB 1175, [21] – [23].

 9   Fair Work Act 2009 (Cth) s 611(1); see also Church v Eastern Health[2014] FWCFB 810 [26].

 10   Keep v Performance Automobiles Pty Ltd[2015] FWCFB 1956 [13], [17].

 11   Ibid [17], with reference to Heidt v Chrysler Australia Limited (1976) 26 FLR 257 [272]–[273].

 12   Church v Eastern Health[2014] FWCFB 810 [29], with reference to Nilsen v Loyal Orange Trust [1997] 76 IR 180 at 181.

 13   Exhibit Brooker 1, footnote 9.

 14   Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879, [36].

 15   Brazilian Butterfly Pty Ltd v Charalambous (2006) 155 IR 36, [43]

 16   Roy Morgan Research Ltd v K Baker[2014] FWCFB 1175.

 17   Zornada v St John Ambulance Australia (Western Australia) Inc [2013] FWCFB 8255, [35]; with reference to Kanan v Aust Postal Telecommunications (1992) 43 IR 257, p.264; 287.

 18   Kanan v Aust Postal Telecommunications (1992) 43 IR 257, p.264.

 19   Baker v Salva Resources Pty Ltd[2011] FWAFB 4014, [10].

 20   [2017] FWC 3382.

 21   Ibid.

 22   Oshlack v Richmond River Council (1998) 193 CLR 72, [44], per Gaudron and Gummow JJ.

 23   [2012] FWA 10164, [37]

 24   Abdulrahim v QBE[2016] FWC 4912, [43].

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