Tania Saranov v KJ & J Romano No 2 Pty Ltd T/A Romano Property Management

[2015] FWC 5393

[2015] FWC 5393

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tania Saranov
v
KJ & J Romano No 2 Pty Ltd T/A Romano Property Management
(U2015/2075)

SENIOR DEPUTY PRESIDENT RICHARDS BRISBANE, 7 AUGUST 2015

Summary: application for costs order – no supporting submissions – credit findings and orders for costs.

[1] This decision concerns an application for an order for costs to be made. It arises out of my decision in [2015] FWC 3842, in which I dismissed an application by Ms Tania Saranov under s.394 of the Fair Work Act 2009 (“the Act”) in relation to her cessation of work with her employer, Romano Property Management.

[2] The employer subsequently filed an application for an order for costs.

[3] The employer pleads for reimbursement of the specified costs, but otherwise provides no supporting submissions of any kind.

[4] The application reasonably is presumed to be an application under s.611 of the Act. Section 611 of the Act provides:

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 ofthe 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).

[5] A recent Full Bench of the Commission [2015] FWCFB 5226 usefully summarised the approaches to s.611 of the Act in the following way:

“Section 611(2)(a) – that IBM “responded to the application… without reasonable cause”

[23] In Keep v Performance Automobiles Pty Ltd, 9 (Keep) the Full Bench summarised relevant principles as follows:

“[17] The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing ([2014] FWCFB 810) (Church). Church is authority for the following propositions:

(i) The power to order costs pursuant to s.611(2) should be exercised with caution and only in a clear case.

(ii) 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.

(iii) One way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.

(iv) 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.’”
[…]

Section 611(2)(b) – should have been reasonably apparent to IBM that its response had “no reasonable prospects of success”

[26] In Keep, the Full Bench summarised the relevant principles this way:

“[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that ‘it should have been reasonably apparent’ to that person that their application had ‘no reasonable prospect of success’. The expression ‘should have been reasonably apparent’ in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant’s subjective belief.

[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had ‘no reasonable prospects of success’. [Wright v Australian Customs Service, PR926115, 23 December 2002] In Deane v Paper Australia Pty Ltd (PR932454, 6 June 2003) a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996;

“unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available”. (Ibid at [8], also see Baker v Salva Resources Pty Ltd [2011] FWAFB 4014 at [10]; and Metecno Pty Ltd T/A Bondor v Cameron [2014] FWCFB 2128 at [16])”

Consideration

[6] It appears to me that Ms Saranov’s application was predicated upon her employer having moved to dismiss her in the course of a confrontation – or perhaps more an intense iteration – between Ms Saranov and her employer.

[7] The contest between the parties, at the first instance, turned on a jurisdictional question as to whether or not Ms Saranov was dismissed at the initiative of her employer, or whether she abandoned her employment. I found against the employer in that regard (and construed Ms Saranov to have been dismissed at her employer’s initiative). At least at this point, Ms Saranov had a defence against the claims by her employer (that she was not dismissed for purposes of s.385 of the Act.

[8] I ultimately determined the substantive matter, which concerned opposing facts, on the basis of my assessment of the credibility of the parties arising from a reconstruction of the facts (on the civil standard of proof). There was no “fact” that was commonly held by the parties or in respect of which Ms Saranov should have reasonably acted otherwise (for purposes of s.611(2)(a) of the Act).

[9] Where findings are made on the basis of assessment of the credit of a witness, reasonable caution should be applied in relation to cost applications, particularly as to a finding as to whether a person acted without reasonable cause. I add that there is no argument before me that Ms Saranov acted vexatiously, either. Ms Saranov’s focus was on redressing her concerns about the manner of her dismissal, but there was no suggestion at any point she was seeking to cause collateral damage to her employer for its own sake or to secure some other kind of advantage (other than for what the Act provides).

[10] Generally, Ms Saranov’s case failed, but it does not follow that it was without reasonable cause or vexatiously motivated.

[11] It is similarly the case – for purposes of s.611(2)(b) of the Act - that difficulties arise in objectively determining a case to have had no reasonable prospect of success in circumstances where the determination turns on an assessment of the credibility of the witnesses. That is, there is more to a proceeding of this kind than there is to a proceeding which concludes on an observation about the facts known to the person at the time the proceedings were instigated. A case in point may be where an employee ignores a critical fact central to their case.

[12] There will be occasions, however, in which a finding based on credibility which will be on such stark terms that a witness may be found to have been deliberately deceitful or misleading, so that s.611(2)(b) may have application. But this was not such a case. Here Ms Saranov had her version of events with its different emphases and nuances and the employer held to another version. It fell upon me to determine which, on the balance of probability was to be preferred.

[13] These are not circumstances in which an application for costs can be founded reasonably.

Conclusion

[14] The application for an order for costs is dismissed in accordance with my findings above.

SENIOR DEPUTY PRESIDENT

Hearing details:

Determined on the basis of written materials

Final written submissions:

Costs Applicant – 5 August 2015

Costs Respondent – 22 July 2015

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