Steven Young v Inovit Pty Ltd T/A Inovit
[2017] FWCFB 2161
•21 APRIL 2017
| [2017] FWCFB 2161 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.611 - Costs
v
Inovit Pty Ltd T/A Inovit
(C2017/806)
VICE PRESIDENT CATANZARITI | SYDNEY, 21 APRIL 2017 |
Application for costs
[1] On 1 February 2017, Deputy President Clancy issued a Decision 1 which found that Mr Young was unfairly dismissed. Subsequently, the Deputy President issued an Order,2 which ordered Inovit Pty Ltd (“Inovit”) to pay Mr Young $24,750.00 plus 9% superannuation, less taxation by way of compensation.
[2] On 13 February 2017, Inovit lodged a Notice of Appeal, appealing the Decision of Deputy President Clancy. On 9 March 2017, we issued a Decision 3 and held that, noting the historical difficulty in contacting Inovit, as well as there being no written submissions, no appeal books filed with the Commission and no attendance at the appeal hearing by Inovit, permission to appeal was refused.
[3] On 20 March 2017, Mr Young lodged an application for costs and attached submissions in support of his application for costs, which was served on Inovit. Having received Mr Young’s application for costs and submissions, we sent correspondence to Inovit on 22 March 2017 requiring Inovit to file and serve submissions in response to the application for costs by 5 April 2017. In that correspondence, we also informed Inovit that, should the Commission not receive any submissions by 5 April 2017, we would assume that no submissions would be filed and the costs application would be decided based on the material before us. Having received no submissions from Inovit in relation to the costs application, the above assumption has been adopted for the purposes of this Decision.
[4] We now turn to consider Mr Young’s submissions and whether the application for costs should be granted.
Costs Application
Mr Young’s Submissions
[5] Mr Young submitted that:
a) Inovit made the application for permission to appeal vexatiously or without reasonable cause within the meaning of section 611 of the Fair Work Act 2009 (Cth) (hereafter “the Act”);
b) It should have been reasonably apparent to Inovit that the application for permission to appeal had no reasonable prospect of success; and
c) Inovit caused unnecessary costs to be incurred by Mr Young because of its unreasonable acts or omissions.
[6] Mr Young contended that the application for permission to appeal was vexatious or brought for an ulterior purpose, which was to unnecessarily prolong the matter and cause unnecessary costs to be incurred by Mr Young. Further, Mr Young submitted that, subsequent to submitting the Notice of Appeal, Inovit failed to file its outline of submissions, prepare appeal books or appear at the hearing. Accordingly, Mr Young asserted it was clear that Inovit did not genuinely intend to have the Commission adjudicate the issues which it raised. Similarly, and prior to filing a Notice of Appeal, Inovit ignored all communications and Directions of the Commission throughout the proceeding. In this regard, Mr Young had regard to Mokomoko v Zennforce Protection Group Pty Ltd 4and Attorney-General v Wentworth5in support of this submission.
[7] In the alternative, Mr Young asserted that Inovit made the application for permission to appeal without reasonable cause and had regard to Kanan v Australian Postal and Telecommunications Union 6 in support of this proposition.
[8] Further, Mr Young posited that the question of whether it should have been reasonably apparent to Inovit that its application for permission to appeal had no reasonable prospect of success was considered in the Full Bench decision of Baker v Salva Resources Pty Ltd, 7 which held:
a) The phrase “should have been reasonably apparent” must be objectively determined and directed to a belief formed on an objective basis rather than a subjective one; and
b) A conclusion that an application “had no reasonable prospect of success” can be reached in circumstances where the application is manifestly untenable or groundless.
[9] Mr Young further contended that Inovit’s filing of the Notice of Appeal was an unreasonable act or omission, which caused Mr Young to incur unnecessary legal costs pursuant to section 400A of the Act.
[10] Accordingly, Mr Young seeks the following order:
● Inovit is to pay Mr Young’s costs with respect to the application for permission to appeal and this application for costs, on an indemnity basis, fixed at $10,000.00 (inclusive of GST).
Inovit’s Submissions
[11] Inovit did not file any submissions in relation to the costs application.
Consideration – Section 611 of the Act
[12] Section 611(1) of the Act enshrines the prima facie assumption that a party will bear their own costs in relation to a matter before the Commission. Pursuant to section 611(2) of the Act, our discretion to override this prima facie assumption and order a party to bear some or all of the costs of another party in relation to an application to the Commission is enlivened only if the application was made:
● Vexatiously (section 611(2)(a)); or
● Without reasonable cause (section 611(2)(a)); or
● In circumstances in which it should have been reasonably apparent to Inovit that the application had no reasonable prospect of success (section 611(2)(b)).
[13] We now turn to consider whether Inovit’s application was made vexatiously.
Was the application made vexatiously?
[14] The question of whether Inovit made its application “vexatiously” looks to its motive in instigating the appeal proceedings. In Nilson, North J observed that:
“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.” 8
[15] Deane and Gaudron JJ made a similar observation in Hamilton v Oades,stating:
“The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously and unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment.’” 9
[16] More recently, a Full Bench of the Commission similarly held:
“The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilson v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed.” 10
[17] In light of these authorities, it follows that an application is made vexatiously if the motive of the applicant in making the application was to harass or embarrass the other party, or to gain a collateral advantage. An application that is unfairly burdensome, prejudicial or damaging also falls within the concept of vexatiousness. The authorities also confirm that the concept of vexatiousness is to be construed narrowly.
[18] Mr Young submitted that Inovit lodged its Notice of Appeal vexatiously. In particular, Mr Young contended that the application for permission to appeal was vexatious or brought for an ulterior purpose, which was to unnecessarily prolong the matter and cause unnecessary costs to be incurred by Mr Young.
[19] In determining whether Inovit lodged its Notice of Appeal vexatiously, we now turn to consider the motive of Inovit in making its application. We note Inovit failed to file its outline of submissions, prepare appeal books or appear at the hearing in support of its Notice of Appeal. Further, Inovit failed to file any submissions in reply to the costs application made by Mr Young. Thus, we are not satisfied Inovit genuinely intended to pursue its appeal before the Commission. As such, and having received no submissions to the contrary, we are satisfied that Inovit’s motive in lodging its appeal was to unnecessarily prolong the matter and cause unnecessary costs to be incurred by Mr Young.
[20] Having been satisfied that Inovit’s motive in lodging its Notice of Appeal was to unnecessarily prolong the matter, it is necessary, then, to consider the notion of “collateral advantage” that North J observed to be within the spectrum of a vexatious application. In Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited Foster J of the Federal Court of Australia observed that:
“The authorities distinguish between two types of case. On the one hand, a proceeding will not be regarded as an abuse of process by reason only that it is brought for the purpose of taking collateral advantage of any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding. On the other hand, if a proceeding is brought for the predominant purpose of obtaining collateral advantage from the existence of the proceeding as such, as opposed to collateral advantage flowing from any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding, it will be an abuse of process and liable to be stayed.” 11
[21] As noted above, Inovit failed to file any material supporting its Notice of Appeal; failed to attend the appeal hearing; and did not file any materials in response to the costs application made by Mr Young. This consistent failure, in our view, indicates that Inovit did not bring its application for the purpose of taking collateral advantage of any judgment or settlement in vindication of legal rights or immunities which might be obtained in the proceeding. As such, and having received no submissions to the contrary, we are satisfied that Inovit brought proceedings before the Commission for the predominant purpose of obtaining collateral advantage from the existence of that proceeding and, in doing so, prolonged the matter and caused unnecessary costs to be incurred by Mr Young.
[22] Accordingly, we are satisfied that Inovit’s application was made vexatiously. Having been satisfied that the application lodged by Inovit was vexatious, the Act confers on us discretion to determine whether to make an order for costs.
Conclusion
[23] As there were no written submissions; no appeal books filed with the Commission; no attendance at the appeal hearing by Inovit; and no submissions filed in relation to the costs application, we are satisfied that we must use our discretion to grant the application for costs pursuant to section 611 of the Act due to the vexatious manner in which Inovit’s application was lodged.
[24] Accordingly, the application for costs is granted.
[25] We note Mr Young’s application did not contain an itemised schedule of costs. Thus, Mr Young is required to file with the Commission and serve on Inovit an itemised schedule of costs pursuant to the form F6 Application for costs within 14 days of this Decision.
[26] Following receipt of this information, Directions will be issued for the parties to make submissions in relation to the itemised schedule of costs. Subsequently, an Order will be issued in accordance with this Decision.
VICE PRESIDENT
Hearing details:
The matter has been determined on the papers.
Final written submissions:
Submissions received by Steven Young on 20 March 2017.
No submissions received by Inovit.
1 [2017] FWC 657.
2 PR589872.
3 [2017] FWCFB 1307.
4 [2011] FWA 1217.
5 (1998) 14 NSWLR 481.
6 (1992) 43 IR 257 at 264-2; [1992] FCA 366 at [29].
7 [2011] FWAFB 4014.
8 (1997) 76 IR 180.
9 (1989) 166 CLR 486.
10 E. Church v Eastern Health [2014] FWCFB 810.
11 [2016] FCA 787.
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