Storey v The Monitoring Centre Pty Ltd and Ors (No.2)
[2017] FCCA 382
•3 March 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| STOREY v THE MONITORING CENTRE PTY LTD & ORS (No.2) | [2017] FCCA 382 |
| Catchwords: COSTS – Application for costs made by applicant – whether respondents acted unreasonably in not accepting offers to settle – whether respondents acted unreasonably in the conduct of the proceedings – application for costs dismissed. |
| Legislation: Crimes Act 1914 (Cth), ss.4AA, 4AA(1) |
| Cases cited: Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977; (2010) 199 IR 373 |
| Applicant: | MAREE STOREY |
| First Respondent: | THE MONITORING CENTRE PTY LTD |
| Second Respondent: | JOSE MUINO |
| Third Respondent: | HELIA MUINO |
| File Number: | SYG 717 of 2013 |
| Judgment of: | Judge Manousaridis |
| Hearing date: | 29 February 2016 |
| Delivered at: | Sydney |
| Delivered on: | 3 March 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Williams |
| Solicitors for the Applicant: | Harmers Workplace Lawyers |
| Counsel for the Respondents: | Mr T Flaherty |
| Solicitors for the Respondents: | Johnston Vaughan Solicitors |
ORDERS
Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) (FW Act):
(a)the first respondent pay a pecuniary penalty in the sum of $7,500 for its contraventions of s.340 of the FW Act;
(b)the second respondent pay a pecuniary penalty of $1,500 for his involvement in the first respondent’s contraventions of s.340 of the FW Act referred to in (a); and
(c)the third respondent pay a pecuniary penalty of $1,500 for her involvement in the first respondent’s contraventions of s.340 of the FW Act referred to in (a).
Pursuant to s.546(3)(c) of the FW Act:
(a)the first respondent pay the pecuniary penalty referred to in order 1(a) to the applicant;
(b)the second respondent pay the pecuniary penalty referred to in order 1(b) to the applicant; and
(c)the third respondent pay the pecuniary penalty referred to in order 1(c) to the applicant.
The first respondent pay the pecuniary penalty referred to in order 1(a) to the applicant by 31 March 2017.
The second respondent pay the pecuniary penalty referred to in order 1(b) to the applicant by 31 March 2017.
The third respondent pay the pecuniary penalty referred to in order 1(c) to the applicant by 31 March 2017.
The applicant’s application for costs is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 717 of 2013
| MAREE STOREY |
Applicant
And
| THE MONITORING CENTRE PTY LTD |
First Respondent
| JOSE MUINO |
Second Respondent
| HELIA MUINO |
Third Respondent
REASONS FOR JUDGMENT
Introduction
On 11 December 2015 I delivered reasons for judgment (previous reasons) in which I held that:
a)the first respondent (TMC) contravened s.340 of the Fair Work Act 2009 (Cth) (FW Act) on or about 29 January 2013 by requesting employees of TMC to put in writing complaints in relation to the applicant, Ms Storey, for reasons that included as a substantial and operative factor, or as an operative or immediate reason, Ms Storey’s sending a letter dated 28 January 2013;
b)TMC also contravened s.340 of the FW Act on 14 February 2013 by purporting to terminate Ms Storey’s employment contract for reasons that included as a substantial and operative factor, or as an operative or immediate reason, Ms Storey’s sending a letter dated 28 January 2013; and
c)the second and third respondents, Mr and Ms Muino, were each involved in TMC’s contraventions of s.340 of the FW Act and thus are taken also to have contravened s.340 of the FW Act in the manner in which TMC has contravened that provision. [1]
[1] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310
In these reasons for judgment I consider two questions. The first is whether I should make an order against the respondents for the payment of penalties and, if so, the amount of the penalties I should order. The second is whether I should order that the respondents pay Ms Storey’s costs.
Penalty - principles
Under s.546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a civil remedy provision. Section 340 of the FW Act, being the provision I have found each of the respondents contravened, is a civil remedy provision.[2]
[2] FW Act, s.340(1), column 1 of table
Where an individual contravenes a civil remedy provision, the maximum penalty that may be ordered against the individual is 60 penalty units, being the maximum number of penalty units referred to in the relevant item in column 4 of the table to s.539(2) of the FW Act.[3] Where it is a body corporate that has contravened a civil remedy provision, the maximum penalty that may be ordered against the body corporate is 300 penalty units, being five times the maximum number of penalty units referred to in the relevant item in column 4 of the table to s.539(2) of the FW Act.[4]
[3] FW Act, s.546(2)(a)
[4] FW Act, s.546(2)(b)
Under s.12 of the FW Act “penalty unit” has the meaning given by s.4AA of the Crimes Act 1914 (Cth) (Crimes Act). At the time the contraventions occurred, s.4AA(1) of the Crimes Act defined penalty unit to mean $170. That means the maximum penalty payable by TMC for each contravention of s.340 of the FW Act is $51,000 and the maximum penalty payable by each of Mr and Ms Muino is $10,200.
In his written submissions, counsel for Ms Storey submitted that “up to the end of 2013” the maximum penalty that could be imposed for each contravention by a body corporate was $33,000, and the maximum penalty that could be imposed on an individual was $6,600.[5] That is incorrect. Up to 27 December 2012, s.4AA(1) of the Crimes Act defined penalty unit to mean $110. Item 7 of Schedule 3 to the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth) (Amending Act) amended s.4AA to define penalty unit to mean $170. Item 9 of Schedule 3 provided that the amendment made by item 7 of that Schedule applies “in relation to an offence committed after the commencement of this item”. The amendment took effect on 28 December 2012.[6]
[5] Application’s [sic] Submissions on Costs and Penalties, 29.02.2016, [15]
[6] Amending Act, s.2(1)
When assessing penalties, the following steps ordinarily need to be taken. First, each contravention must be identified. Second, where there is more than one contravention, it is necessary to consider whether s.557(1) of the FW Act applies. That subsection provides that two or more contraventions are “taken to constitute a single contravention” if the contraventions are committed by the same person and the contraventions arose out of the same course of conduct by the person. Subsection 557(1) of the FW Act only applies, however, to the civil remedy provisions identified in s.557(2) of the FW Act. Third, unless it is inconvenient to do so,[7] a penalty is assessed for each contravention taking into account the factors to which I refer in the following paragraph. Fourth, the Court assesses whether there are common elements to the contraventions sufficient to justify the application of the “one transaction” principle.[8] Finally, the Court considers whether there should be an adjustment having regard to the “totality principle”.[9]
[7] See Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626 at [42]
[8] See Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626 at [35]-[37]
[9] See Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626 at [43]
The approach of most courts in assessing penalties for single contraventions of the FW Act is to take into account the factors that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd.[10] These factors are: the nature and extent of the conduct which led to the breaches; the circumstances in which that conduct took place; the nature and extent of any loss or damage sustained as a result of the breaches; whether there had been similar previous conduct by the party committing the breach; whether the breaches were properly distinct or arose out of the one course of conduct; the size of the business enterprise involved; whether or not the breaches were deliberate; whether senior management was involved in the breaches; whether the party committing the breach had exhibited contrition; whether the party committing the breach had taken corrective action; whether the party committing the breach had cooperated with the enforcement authorities; the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and the need for specific and general deterrence.
[10] [2007] FMCA 7. In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 at [14] Tracey J adopted this same list of factors as “potentially relevant and applicable”. This and the following paragraph reproduces what I said in Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626 at [60] and [61].
Although any one or more of these factors may be relevant to the assessment of a pecuniary penalty in any given case, “courts have warned against the use of checklists because they give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention”.[11] With these reservations in mind, I propose to consider the factors identified in Mason that are relevant to the circumstances of this case.
[11] Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977; (2010) 199 IR 373 at [10] (Barker J)
The contraventions to be assessed
Each of the respondents engaged in two contraventions of s.340 of the FW Act. Subsection 557(1) of the FW Act does not apply, however, to these contraventions because s.340 is not included in s.557(2) of the FW Act.
Counsel for the respondents submitted the two contraventions should be assessed as one contravention. Although counsel for Ms Storey did not expressly agree with that submission, the written submissions counsel prepared, and the oral submissions he made at the hearing, proceed on the assumption that I should assess the two contraventions as if they were one.
For reasons I give below, I am of the opinion that the “one transaction principle” applies to the extent it would be appropriate that each of the respondents pay one penalty for the two contraventions of s.340 of the FW Act. I nevertheless propose to assess separately the penalties for each of the two contraventions.
Parties’ submissions
Counsel for Ms Storey submitted the Court should impose a penalty reflecting 33% of the maximum penalty.[12] First, the conduct occurred in circumstances where Ms Storey had informed Mr and Ms Muino she was pregnant and, for that reason, “it was not unreasonable for the applicant to have believed it was part of the reasons for her dismissal”.[13] Second, the contraventions amount to serious failures by TMC to comply with its obligations to Ms Storey under her contract of employment and the FW Act.[14] Third, the respondents’ conduct had a serious effect on Ms Storey’s emotional state.[15] Fourth, the respondents were late in disclosing in the proceedings the communications Ms Muino received from employees about Ms Storey.[16] Fifth, the Court should impose penalties to “show its disapproval of the respondents’ conduct”.[17] Sixth, there is a “clear need in this case for specific deterrence”.[18]
[12] Applicant’s Submissions on Costs and Penalties, [23]
[13] Applicant’s Submissions on Costs and Penalties, [17]
[14] Applicant’s Submissions on Costs and Penalties, [18]
[15] Applicant’s Submissions on Costs and Penalties, [19]
[16] Applicant’s Submissions on Costs and Penalties, [18], [20]
[17] Applicant’s Submissions on Costs and Penalties, [21]
[18] Applicant’s Submissions on Costs and Penalties, [22]
Counsel for the respondents submitted the Court should order no penalty or, at least, it should order only a nominal penalty.[19] First, the contraventions were triggered by Ms Storey’s letter which was inflammatory.[20] Second, the risk of the respondents again contravening the FW Act is “virtually non-existent”.[21] Third, Ms Storey made allegations in these proceedings which were unfounded.[22] Counsel here refers to the claims that the respondents dismissed her because she was pregnant, and because she took sick leave. Fourth, Ms Storey only claimed an order for the payment of pecuniary penalties at the end of the hearing.[23]
[19] The Respondents’ Submissions on Costs and Penalties, [18]
[20] The Respondents’ Submissions on Costs and Penalties, [19(a)]
[21] The Respondents’ Submissions on Costs and Penalties, [19(d)]
[22] The Respondents’ Submissions on Costs and Penalties, [19(e)]
[23] The Respondents’ Submissions on Costs and Penalties, [19(f)]
The first and fourth matters on which counsel for Ms Storey relies are not relevant to the assessment of penalties. Nor are the third and fourth matters on which counsel for the respondents relies relevant. To the extent necessary, I will refer below to the other matters on which counsel relied.
First contravention – requesting information from employees
The factors that are relevant to assessing a penalty for this contravention are as follows.
Nature and extent of contravention, and circumstances in which that conduct took place
In my previous reasons, I found the contravention consisted of TMC requesting information from TMC’s employees for the purpose of obtaining information that might confirm complaints that had previously been made to Ms Muino about Ms Storey, or which could substantiate any other complaints the employees might have had that might support valid grounds for terminating Ms Storey’s contract of employment;[24] and that TMC, through Mr and Ms Muino, engaged in the conduct for reasons that included as a substantial and operative factor, or as an operative or immediate reason, Mr Storey’s having sent the letter dated 28 January 2013.[25] I also found, however, that the conduct occurred in the following circumstances:[26]
. . . Mr and Ms Muino’s reading Ms Storey’s letter of 28 January 2013 induced in them a mixture of emotions that included surprise, dismay, outrage, hurt, and anger. That was a predictable response, given the matters Ms Storey asserted in the letter, and when viewed against what, until no more than a few weeks before, was in the eyes of Mr and Ms Muino a mutually loving and respectful relationship they shared with Ms Storey. Fuelled by the emotions induced by Ms Storey’s letter, Mr and Ms Muino decided to terminate Ms Storey’s contract. They sought legal advice. Mr and Ms Muino, however, did not believe TMC had, or had sufficiently secure, valid grounds to terminate Ms Storey’s contract; at least not without obtaining in writing complaints that staff had in relation to Ms Storey that would justify TMC terminating Ms Storey’s employment contract, and without Mr and Ms Muino first meeting with Ms Storey to put to Ms Storey the effect of the written complaints they expected to obtain from employees.
[24] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [139]
[25] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [143]
[26] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [83]
Also relevant are my findings about the claims Ms Storey made in her letter of 28 January 2013 which led to Mr and Ms Muino reacting to the letter in the manner I found they did:[27]
a)Ms Storey’s assertion that she had been “verbally attacked over the phone about my role as General Manager” cannot reasonably be supported either by the substance of what Ms Muino said to Ms Storey during their telephone conversation of 23 January 2013, or by the manner in which Ms Muino spoke.
b)Ms Storey’s assertion that she found Ms Muino “to be very unprofessional” cannot reasonably be supported either by what Ms Muino said to Ms Storey during their telephone conversation on 23 January 2013, or by the manner in which Ms Muino spoke.
c)Ms Storey’s assertions that Ms Muino “advised that two persons could not start work at 6am any more”; that this had been changed by Ms Muino “all of a sudden”; that Ms Muino told Ms Storey “to reduce staff within the control room so there was only two persons in the control room (including me) at any one time” which meant that Ms Storey would “always be doing operations” and could not do her general manager duties; and that “effectively means I have been demoted after 13 years working for the company” are not an accurate reflection of what Ms Muino said to Ms Storey.
d)Ms Muino did not claim Ms Storey “was forgetting things due to implied ‘baby brain’”.
e)Ms Storey’s assertion that she was “given a lot of criticism” about her responsibilities is not an accurate characterisation of what Ms Muino said during the telephone conversation of 23 January 2013. Further, although Ms Storey may have felt Ms Muino did not hear Ms Storey’s replies, Ms Storey’s perception was inaccurate. Ms Muino apparently listened and overtly acknowledged what Ms Storey said during the conversation.
[27] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [52]
The relevance of these matters is that, although Ms Storey may have believed the claims she made in her letter of 28 January 2013, I have found many of them to have been incorrect; and, particularly given the apparently long-term and happy history of the relationship between Ms Storey and Mr and Ms Muino, there was a high probability that the claim would induce the emotional response the claims did in fact induce.
Extent of loss or damage
In my previous reasons I found Ms Storey suffered distress, hurt, and humiliation because of the process Mr and Ms Muino followed in terminating her employment; and that a significant causal factor in the distress, hurt, and humiliation Ms Storey experienced was the manner by which Mr and Ms Muino obtained information from employees about Ms Storey. They obtained the information by making an open-ended invitation to many employees to criticise Ms Storey.[28] That is a factor that weighs in favour of assessing a penalty at the higher end of the scale.
[28] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [161]
Whether deliberate
The conduct of Mr and Ms Muino was deliberate in the sense that they knowingly embarked on a course of conduct that led to Ms Storey’s employment being terminated. There is nothing to suggest, however, that Mr and Ms Muino were aware that in deciding to embark in that conduct they would contravene the FW Act, or they were at risk of contravening the FW Act. I have found that one reason for Mr and Ms Muino’s embarking on that conduct was to obtain information which would legally justify the termination of Ms Storey’s employment; and they terminated Ms Storey employment after seeking, obtaining, and, apparently, relying on legal advice.
Specific and general deterrence
There is no evidence any of the respondents previously contravened or were involved in contravening the FW Act; and there is nothing to suggest there is any real risk the respondents will again contravene the FW Act. I do not, therefore, accept the submission made by counsel for Ms Storey that this is a case for specific deterrence. There is therefore no need for any penalty to contain a component for specific deterrence.
The amount of any penalty should, however, contain a component for general deterrence, even though the contravention arose out of circumstances which are unlikely to be repeated. The penalty should signal the need for employers to be aware of their obligations under the FW Act, and conform with their obligations, even where, and particularly where, they deliberate on the action they should take in response to what they believe to be inaccurate and unfair complaints from an employee.
Other matters
Mr Muino has made an affidavit in which he deposes that the costs of the proceedings have imposed financial strain on TMC and on himself. Although it may be accepted the respondents have incurred significant costs, and this has placed financial pressure on them, the evidence does not reveal with any precision the financial circumstances of TMC or of Mr and Ms Muino. It is therefore not possible, on the evidence before me, to assess what impact the ordering of a penalty will have on the financial circumstances of the respondents. Even if such evidence were available, however, it is likely it would have carried little weight.
Mr and Ms Muino have not expressed any contrition. That, however, carries little weight. I made orders requiring the respondents to compensate Ms Story for the losses I found she suffered for the two contraventions. It has not been suggested the respondents have not satisfied those orders.
Assessment
I do not agree with the submissions made by counsel for the respondents that no penalty or, at least, only a penalty of a nominal amount, should be ordered. As counsel himself acknowledged, that Ms Storey may have sent to Mr Muino a letter containing incorrect claims did not excuse TMC’s contravention of the FW Act.
Having regard to the matters I have considered, I am of the opinion that the appropriate penalty for TMC’s first contravention of s.340 of the FW Act is $7,500, and that $1,500 is the appropriate penalty for each of Mr and Ms Muino’s involvement in TMC’s first contravention of s.340 of the FW Act.
Second contravention – termination of employment
Nature and extent of contravention, and circumstances in which that conduct took place
The second contravention consisted of TMC’s dismissing Ms Storey from her employment. That is a serious contravention, and merits assessing a penalty at the higher end of the scale. TMC’s dismissal of Ms Storey, however, should be viewed against the background in which the first contravention occurred, which I have already set out, and my findings that Mr and Ms Muino believed the allegations employees had made about Ms Storey,[29] and that Mr and Ms Muino were hurt by the allegations about Ms Storey having stated she wanted Mr and Ms Muino to dismiss her so that she could sue for unfair dismissal.[30] Also relevant is the respondents’ having sought, received, and apparently, relied on legal advice.
[29] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [114]
[30] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [115]
Extent of loss or damage
As I have already noted, in my previous reasons I found Ms Storey suffered distress, hurt, and humiliation because of the process Mr and Ms Muino followed in terminating her employment; and that a significant causal factor in the distress, hurt, and humiliation Ms Storey experienced was the manner by which Mr and Ms Muino obtained information from employees about Ms Storey. They obtained the information by making an open-ended invitation to many employees to criticise Ms Storey.[31] I also found Ms Storey suffered loss of salary of $5,898.35 and failed to receive a $1,555 share in profits. These are not insignificant losses.
[31] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310 at [161]
Whether deliberate
The conduct of Mr and Ms Muino was deliberate in the sense they knowingly embarked on a course of conduct that led to Ms Storey’s employment being terminated. As I have already noted, however, there is nothing to suggest Mr and Ms Muino were aware that in deciding to embark in that conduct they would contravene the FW Act, or they knew they were at risk of contravening the FW Act. They dismissed Ms Storey after seeking, obtaining, and, apparently, relying on legal advice.
Specific and general deterrence
Apart from the first contravention, there is no evidence the respondents had previously committed contraventions of the FW Act; and there is nothing to suggest there is any real risk the respondents will again contravene the FW Act. There is therefore no need for any penalty to contain a component for specific deterrence.
For the reasons I have already given, however, the amount of any penalty should contain a component for general deterrence, even though the contravention arises out of particular circumstances which are unlikely to be repeated.
Other matters
For reasons I have already given, the financial circumstances of the respondents is not a matter that has any bearing on the assessment of the relevant penalty.
The respondents have not expressed any contrition. That, however, carries little weight. I made orders requiring the respondents to compensate Ms Story for the losses I found she suffered for the two contraventions. There is nothing to suggest the respondents have not satisfied those orders.
Assessment
Having regard to these factors, the appropriate penalty for TMC’s second contravention of s.340 of the FW Act is $7,500, and the appropriate penalties for of Mr and Ms Muino’s involvement in TMC’s second contravention of s.340 of the Act is $1,500.
Totality Principle
There is a substantial overlap between the two contraventions of s.340 of the FW Act. On my findings, the two species of conduct that constituted the two contraventions were both induced for reasons that included as a substantial and operative factor the complaints Ms Storey made in her letter dated 28 January 2013; and the conduct formed part of one course of conduct – the respondents’ obtaining information for the purpose of establishing valid grounds for dismissing Ms Storey, and dismissing Ms Story for reasons that included the respondents’ belief in the truth of the information they received from the employees.
In those circumstances I am of the opinion that one penalty should be imposed on each of TMC and Mr and Ms Muino for TMC’s two contraventions of s.340 and Mr and Ms Muino’s involvement in those contraventions. I propose, therefore, to order that TMC pay a pecuniary penalty of $7,500 for both contraventions, and Mr and Ms Muino each pay a pecuniary penalty of $1,500 for their involvement in the two contraventions. I also propose that these penalties be paid within 28 days to Ms Storey.
Costs
The power of the Court to order costs in relation to a matter arising under the FW Act is regulated by s.570 of the FW Act. Subsection 570(1) provides that a party in such proceedings may be ordered to pay costs “only in accordance with subsection (2), or section 569 or 569A”. Relevant to Ms Storey’s application for an order for costs is s.570(2) of the FW Act which provides that a party may be ordered to pay costs:
…only if:
(a)the court is satisfied the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs…
Ms Storey submits the respondents should pay her costs for two reasons. First, she submits the respondents unreasonably refused to accept offers made in two letters to settle Ms Storey’s claims. Second, the respondents acted unreasonably in the manner in which they conducted the proceeding.
Failure to accept offers
I do not need to review the cases that have considered a party’s failure to accept an offer of settlement as a reason for making an order under s.570(2)(b) of the FW Act. That is so because I am not satisfied the respondents acted unreasonably by not accepting the offers Ms Storey made.
The first offer is that contained in a letter dated 10 July 2013 from Ms Storey’s lawyers to the respondents’ lawyers.[32] The letter informed the respondents’ lawyers of instructions to offer $25,000 inclusive of costs. The amount offered is more than the sum of the amounts I held Ms Storey was entitled to recover, excluding the amount I held she was liable to pay on the respondents’ cross claim ($21,773.75, excluding interest). For that reason alone, and given it is not suggested the respondents would have been at risk of being liable to an order for costs under s.570 of the FW Act, I am not satisfied the respondents acted unreasonably by not accepting the offer of $25,000.
[32] Exhibit A1
The second offer is contained in a letter dated 27 August 2013 from Ms Storey’s lawyers to the respondents’ lawyers.[33] The letter stated:
We . . . are instructed to make an offer in the sum of $18,000 inclusive of costs . . . for damages acceptance of which will resolve this matter in full.
The sum of $18,000 is to be paid as damages for personal injury, and therefore will be without deduction of taxation.
[33] Exhibit A1
The respondents did not act unreasonably by not accepting that offer. First, it was expressed to be a payment on account of personal injury. Although Ms Storey did claim in her statement of claim depression as one of the heads of damage she suffered, there is nothing in the letter of 27 August 2013, and there is no evidence before me, that indicated Ms Storey had a claim of damages for personal injury that could reasonably have been assessed to have a value of $18,000. Second, Ms Storey recovered no amount for any damage that could reasonably be characterised as “personal injury”. Third, the $18,000 Ms Storey offered exceeds the amount she succeeded in recovering in the proceeding.
Counsel for Ms Storey submitted that at the time of these offers Ms Storey’s claims potentially exceeded $41,500 together with general damages and damages for her not being given the promised share of TCM’s profits. This submission assumes that the reasonableness of an offer is to be assessed by reference to the potential value of a claim. That assumption is incorrect. In any event, given my finding that Ms Storey lost wages of no more than $5,898.35, and the findings on which that finding was based, namely, that Ms Storey obtained alternative employment,[34] and she intended to work part time after her maternity leave,[35] I am not satisfied that Ms Storey’s claim she had lost wages of $41,500 was at any time reasonably made.
[34] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310, [152], [158]
[35] Storey v The Monitoring Centre Pty Ltd & Ors [2015] FCCA 3310, [155]
Conduct of proceedings
The conduct of the proceedings Ms Storey submits justifies the making of a costs order is the respondents’ not having discovered before the hearing documents the employees provided to the respondents in response to Ms Muino’s request after Ms Storey sent the letter of 28 January 2013.
It is true the respondents failed to act reasonably in not producing those documents before the hearing, and they only did so after, on the morning of the first day of the hearing, I indicated to the respondents’ counsel that the failure to produce such documents might justify me drawing inferences adverse to the respondents’ case. That does not necessarily mean, however, an order should be made to pay Ms Storey’s costs. Ms Storey has not identified any additional costs she incurred as a result of the respondents’ failure to produce the documents when they should have produced them. If anything, the respondents’ failure to produce the documents worked to the advantage of Ms Storey. Because of the late production of the documents, they were admitted into evidence for the limited purpose of proving the state of mind of Mr and Ms Muino, not as evidence of the truth of the matters the representations contained in the letter asserted. In other words, the respondents were unable to use the documents to prove the truth of any representations contained in them to justify TMC’s termination of Ms Storey’s employment.
Conclusion on costs
For these reasons, I reject Ms Storey’s application for an order for costs.
Disposition
I propose to order that TMC pay a pecuniary penalty of $7,500 and that each of Mr and Ms Muino pay a pecuniary penalty of $1,500. I propose to order that the penalties be paid within 28 days of my making the orders, and that, as permitted by s.546(3)(c) of the FW Act, the penalties be paid to Ms Storey.
I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis
Date: 3 March 2017
Key Legal Topics
Areas of Law
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Employment Law
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Civil Procedure
Legal Concepts
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Costs
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Penalty
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Statutory Construction
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