Tamer Selcuk v Maddison & Associates Pty Ltd

[2015] FWC 3965

[2015] FWC 3965

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.401 - Application for costs orders against lawyers and paid agents

Tamer Selcuk
v
Maddison & Associates Pty Ltd
(U2015/4839)

COMMISSIONER RYAN MELBOURNE, 12 JUNE 2015

Costs application against lawyer.

[1] This decision involves an application for a costs order arising from an unsuccessful application for permission to appeal against the decision of Ryan C in U2014/8741.

[2] In the unfair dismissal matter subject to the appeal the Applicant, Mr Selcuk, was found to be unfairly dismissed from his employer, Epworth Healthcare (the First Respondent).

[3] On 14 April 20145 Mr Vasilaras, the Applicant’s representative, filed in the Commission, an application for costs seeking costs orders against both the First Respondent and the First Respondent’s legal representative, Maddison & Associates Pty Ltd (the Second Respondent). In particular, an order that the First Respondent pay the costs of the Applicant with respect to the application for permission to appeal, and an order that Maddison & Associates Pty Ltd pay a portion or all of the costs of the Applicant with respect to the application for permission to appeal.

[4] The way in which the Commission has processed these costs applications is by attaching the application for costs against the First Respondent to the originating unfair dismissal matter, U2014/8741, and by making the application for costs against the Second Respondent, Maddison & Associates Pty Ltd, the subject of this matter.

[5] For the purposes of this application, the respondent, Maddison & Associates Pty Ltd, is referred to herein as the Second Respondent.

[6] The parties filed written submissions and witness statements in support of their respective positions and all parties agreed that the Commission determine the costs applications on the papers.

Relevant Statutory provisions

[7] The Fair Work Act 2009 (the Act) deals with the issue of costs orders against a party’s representative in s.401 and s.402 which are as follows:

“401 Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b) a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c) under section 596, the person is required to seek the FWC’s permission to be represented by the representative.

(1A) The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a) the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b) of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2) The FWC may make an order under this section 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.”

“402 Applications for costs orders

An application for an order for costs under section 611 in relation to a matter arising under this Part, or for costs under section 400A or 401, must be made within 14 days after:

(a) the FWC determines the matter; or

(b) the matter is discontinued.”

[8] In the present matter the application for a costs order has been made within 14 days of the decision of the Full Bench to refuse to grant permission to appeal. The application for a costs order therefore meets the requirements of s.402 of the Act.

[9] The Applicant contends that for the purpose of s.401 the Second Respondent acted unreasonably in failing to advise the Respondent to accept the offer to settle the matter.

[10] The application for costs against the Second Respondent relies on s.401 of the Act. Whilst it is not explicitly clear it would appear that the Applicant is relying on both s.401(1A)(a) and (b) of the Act.

[11] The Applicant’s Outline of Submissions in Support of an Application for Costs filed with the application in this matter contains the following:

“13. The Applicant submits:

c. the Second Respondent:

i. encouraged the First Respondent to continue the matter;

ii. should have been aware that the First Respondent had no reasonable prospect of success in applying for permission to appeal; and

iii. caused costs because of his unreasonable actions or omissions.”

[12] In relation to s.401(1A) of the Act the Applicant contends that:

24. “Unreasonable act” and “omission”, as used in s 401 of the Act, are not defined in the Act. However, based on the definitions in the Macquarie dictionary and/or plain reading suggests that the question for the FWC, in this application, is to consider whether the ...... Second Respondent caused costs to be incurred by the Applicant by doing something (e.g. continuing with the application and/or failing to accept, or alternatively advising to accept, an offer).

25. The Applicant put the following open offers to the First Respondent via the Second Respondent, including placing both of them on notice of a costs application:

Date:	Offer:
11 FEBRUARY 2015	Verbal offer made to Second Respondent: $25,000 in exchange for First Respondent discontinuing application for permission to appeal
11 March 2015	Written offer (refer to letter dated 11 March 2015): $20,000 in exchange for First Respondent discontinuing application for permission to appeal

26. During the 11 February 2015 discussion, the Second Respondent advised the writer that the First Respondent was “pissed off” with the decision [i.e. Commissioner Ryan’s decision] and there is “no way” it would be prepared to negotiate (as opposed to obtaining his client’s instructions as he is obliged to do). In addition, the Second Respondent advised the writer he might be able to “bend [his client’s] arms” in accepting an offer of $5,000, as that would be “commercially sensible”.

27. Given the level of experience of the Second Respondent, it is reasonable to expect that he would undertake the necessary research and assessment prior to embarking on an application or continuing to pursue an application in circumstances where a generous offer was put. The Applicant, as at 11 March 2015, and in attempt to reduce his legal costs, was prepared to accept $12,500 less than his awarded compensation.

28. Accordingly, the Applicant submits that the unreasonable act or omission by the ......Second Respondent caused the Applicant to incur unnecessary legal costs. .......
Further, or in the alternative, the Second Respondent’s failure to advise the First Respondent to accept either of the Applicant’s offers was an unreasonable act or omission, which resulted in the Applicant incurring costs to prepare for and appear at the hearing for the application for permission to appeal.”

[13] The Respondent in the unfair dismissal matter has filed in the Commission witness statements from Mr Simon Benedict, Human Resources Manager for the First Respondent and from Ms Cate Morris, Senior Human Resources Advisor of the First Respondent in support of the First Respondent’s case against the making of costs orders against it. The Second Respondent relies upon those witness statements as part of his case.

Mr Simon Benedict says:

“7. In relation to the various offers put forward by the respondent to the appeal I discussed those matters with Mr Addison when they were received. Following the discussions with Mr Addison in which we discussed the prospects of success, the risks and other matters of principle etc I conveyed instructions to Mr Addison so that he could respond to Mr Vasilaras.

8. I do not know the content of the discussions between Mr Vasilaras and Mr Addison however the matter was not resolved in discussions. The matter was heard by the full bench and determined by them.”

Ms Cate Morris says:

“7. The notice of appeal was filed by Epworth and in due course directions were received which were complied with and outlines of submissions were filed and served. I am aware that a letter was sent by Vasilaras and company on 11 March 2015. That letter is annexed to the application for costs filed with the commission. I am aware of the letter because it was discussed with Maurice Addison and Simon Benedict on the day it was received i.e. 11 March 2015.

8. The decision was taken by senior management at Epworth that they would not settle the matter rather that there would have the matter determined by the full bench.”

[14] In the Outline of Submissions filed on behalf of the First Respondent and the Second Respondents on 3 May 2015 the Second Respondent contends on his own behalf:

“16. .....It is also clear from the witness statements that the solicitor for the respondent was seeking instructions and relying on those instructions to the solicitor for the applicant.”

[15] In Supplementary Submissions filed on behalf of the First Respondent and the Second Respondent on 12 May 2015 the Second Respondent contends on his own behalf:

“5. .......Indeed there is no evidence against the second respondent in this matter other than the contents of the discussion between the legal representatives and the purported conversation is then turned into speculation that the second respondent did not take the offers back to the first respondent. That speculation is refuted by the evidence of Mr Benedict. It is clear on the evidence of Mr Benedict that the offers were the subject of instructions.”

[16] Whilst the Applicant submitted that the Second Respondent “encouraged the First Respondent to continue the matter” there is nothing in any of the material relied upon by the Applicant which even hints at the Second Respondent encouraging the First Respondent to initiate the appeal or to continue to pursue the appeal.

[17] The Applicant submitted that the Second Respondent “should have been aware that the First Respondent had no reasonable prospect of success in applying for permission to appeal”. This submission is irrelevant. Whether or not the Second Respondent was aware, or should have been aware, that the First Respondent had no reasonable prospect of success in applying for permission to appeal is not the test for s.401 of the Act. The test for the purpose of s.401(1A)(b) is whether the Second Respondent engaged in an unreasonable act or omission in connection with the conduct or continuation of the matter.

[18] The witness statements of both Ms Morris and Mr Benedict make clear that the decision to appeal and the decision not to settle but to continue with the appeal were made by the senior management of the First Respondent. Whilst it is clear that the First Respondent took into account the advice of the Second Respondent there is nothing before the Commission which could permit the Commission to be satisfied that the Second Respondent caused the Applicant to incur costs because of “an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter”.

[19] The level of satisfaction required of the Commission is to be met by the test laid down in Briganshaw v Briganshaw 1 where Dixon J said at 361:

“The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality.”

and at 362:

“But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences.”

[20] In the present application the Applicant fails to make out the necessary case for a costs order against the Second Respondent. The Applicant’s case is nothing more than indirect inferences and extremely inexact proofs.

[21] The application is refused.

COMMISSIONER

 1 [1938] 60 CLR 336.

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