Tiffany Causer v Refined Learning Pty Ltd T/A ABC Refined Learning

[2021] FWC 5382

[2021] FWC 5382

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Tiffany Causer
v
Refined Learning Pty Ltd T/A ABC Refined Learning
(U2021/1955)

DEPUTY PRESIDENT BOYCE SYDNEY, 7 SEPTEMBER 2021

Application for costs under ss.400A(1) and 611(2)(b) of the Fair Work Act 2009 – Costs Respondent claimed Costs Applicant in unfair dismissal proceedings was a “volunteer” and not an “employee” - Costs Respondent claimed it had followed the Small Business Fair Dismissal Code prior to and/or at the time it dismissed the Costs Applicant – Costs Respondent implied that Costs Applicant was not “dismissed” at the Costs Respondent’s initiative – all jurisdictional objections without basis in fact or law – Commission satisfied Costs Respondent’s responses to unfair dismissal application “had no reasonable prospects of success” and gave rise to an “unreasonable act or omission by the Costs Respondent in connection with the conduct or continuation of the [jurisdictional objections raised]” – discretion to award costs against the Costs Respondent enlivened - costs order made.

Overview

[1] This Decision was originally made on an ex-tempore basis on transcript. In publishing these Reasons, I have taken the opportunity to revise, make additions to, and/or amend same in accordance with the principles stated by Kirby J in Ex Tempore Judgments - Reasons on the Run (1995) 25 UWALRev 213 (at 229-230, including the authorities cited therein), and the New South Wales Court of Appeal in Bar-Mordecai v Rotman & Ors [2000] NSWCA 123 (at [193]-[195], including the authorities cited therein).

[2] On 28 July 2021, the Costs Applicant made an application for costs pursuant to s.400A(1) and s.611(2)(b) of the Fair Work Act 2009 (Act). The Costs Application follows from the Decision made by me in Tiffany Causer v Refined Learning Pty Ltd T/A ABC Refined Learning [2021] FWC 4357 (26 July 2021) (UD proceedings).

[3] In the UD proceedings, I determined that the Applicant was unfairly dismissed and made an Order in respect of the payment of compensation to the Applicant [PR731695] (14 July 2021).

[4] Directions were issued on 29 July 2021 for the filing of submissions with respect to the Costs Application. The Costs Applicant filed submissions along with a witness statement of Mr Garry Dircks dated 5 August 2021. Mr Dircks’ witness statement was tendered without objection at the hearing (Exhibit GD1).

[5] The Costs Respondent did not comply with the Directions issued. My Associate wrote to Ms Wen of the Costs Respondent on 13 August 2021:

“Dear Ms Wen,

Re: U2021/1955 - Causer, Tiffany v Refined Learning Pty Ltd T/A ABC Refined Learning

I refer to the matter above.

Background

On 29 July 2021, the Fair Work Commission issued Directions in this matter.

Orders [2] of those Directions read as follows:

[2] By 4.00pm AEDT on Thursday, 12 August 2021, the Costs Respondent must file in the Commission and serve on the Costs Applicant an outline of submissions, witness statements, and any documents in respect of the application for costs.

Chambers has not received any materials from the Costs Respondent in compliance with Order [2].

Further directions regarding show cause

In view of the foregoing, the Deputy President directs as follows:

[1] The Costs Respondent is to file with the Commission, and serve on the Costs Applicant, written submissions regarding their non-compliance with Directions. The Costs Respondent is to comply with this Direction by no later than 4:00pm AEDT today, 13 August 2021.

[2] If the Costs Respondent does not comply with Order [1] above, or if the Deputy President is not satisfied by the Costs Respondent’s submissions, this may result in the Costs Respondent being unable to rely on any submissions or evidence at the Hearing on 19 August 2021.”

[6] Ms Wen responded, not by 13 August 2021, but on 17 August 2021:

“Dear Hannah,

I am very sorry for the late reply to this email because there were no classes and no students, no teachers were coming to our cram school during the lockdown period, and no staff at work. So, I did not check the email every day. When I saw the email, I had already missed the time to request a reply.

Our cram school is located in the George River Administrative District. Since the state government has ordered the province to increase its vigilance starting from 14/8/21 on weekend, residents can only perform activities in Five kilometers area where they live and cannot visit friends and Family. So it is very difficult to seek legal aid and legal advice under NSW government regulations.

I implore the court and your organization to agree that the hearing date and the date of providing relevant documents can be postponed due to the severe epidemic situation and the current lockdown of the city. Gratitude!

Due to my poor English ability, I used Google Translate to write this email. If there are any inappropriate grammar and words, please forgive me.

News copies of press releases from the State Government:

New South Wales residents will continue to live under COVID-19 restrictions long after the majority of the state is fully vaccinated, Premier Gladys Berejiklian says.

It's the first time the Premier has laid out the reality of life in NSW once 80 per cent of eligible people receive both doses of the jab.

Rules and restrictions for the regional and rural affected areas in NSW where stay at home rules are in place to help stop the spread of COVID-19.

Kindness Regard

Fiona Wen”

[7] My Associate responded to Ms Wen on 18 August 2021:

“Dear Ms Wen,

Re: U2021/1955 - Causer, Tiffany v Refined Learning Pty Ltd T/A ABC Refined Learning

Thank you for your email.

The Deputy President notes your request and advises the Costs Respondent that the matter cannot be adjourned. Moreover, the basis upon which the Respondent makes a request for an adjournment lacks sufficient detail as to why the current COVID19 conditions and stay at home restrictions in Sydney have impacted on the Costs Respondent’s ability to prepare, file and serve submissions and evidence in this matter.

The Deputy President further notes that the Commission itself as well as all Sydney-based parties before the Commission have been subject to the same circumstances as above, however, have adapted to meet their obligations, including seeking legal advice, and meeting all Directions issued.

The Costs Hearing will proceed on the submissions and evidence currently filed before the Commission. The Deputy President has determined to list the matter for Hearing rather than hear the matter on the papers, during which an interpreter will be provided. A Notice of Listing will be issued shortly.

Please also note the link to the Workplace Advice Service below:

Workplace Advice Service | FWC Main Site”

[8] I conducted a Hearing on 1 September 2021 to determine the Costs Application. I note that the Costs Applicant has filed with her Form F6 a Schedule of Costs in accordance with Schedule 3.1 of the Fair Work Regulations 2009 (Cth) (Regulations) (cf. s.403, and Item 12 of Schedule 3 of the Act).

[9] The Schedule of Costs identifies costs in the gross amount of $5,172.00. Having regard to same, I am satisfied that the costs sought by the Costs Applicant are limited to those prescribed by the Regulations.

[10] At the Hearing, Mr Garry Dircks of Just Relations – Consultants continued his appearance (with permission) for the Costs Applicant, and Ms I-Chuan Wen, Owner and Director, appeared for the Costs Respondent.

Submissions of Costs Applicant

[11] Mr Dircks made the following submissions on behalf of the Costs Applicant:

“1. Pursuant to section 611, the Respondent caused the Applicant to incur costs because the Respondent’s response to the Applicant’s application was made without reasonable cause, and it should have been reasonably apparent that the Respondent’s response to the application had no reasonable prospect of success.

2. The test for ‘without reasonable cause’ includes whether that the application (or response) was ‘so manifestly faulty that it does not admit of argument’.

3. The test adopted in Walker v Walker v Mittagong Sands Pty Limited T/A Cowra Quartz [2011] FWA 2225 (Thatcher C, 14 April 2011) at para. 17, [(2011) 210 IR 370] at [72] was that if the Commission was satisfied that a reasonable person in full knowledge of the facts as known to the respondent’s owner/manager, would have realised that when the truth became known the respondent’s response to the application, it had no reasonable prospect of success (paragraph 611(2)(b)).

4. There was no arguable case that the Applicant was a volunteer. That objection should never have been made and should not have been maintained for the period up to 17 May 2021.

5. There was no arguable case that the Respondent was either a small business or that it complied with the Small Business Fair Dismissal Code. The Respondent persisted with that objection up to and including on hearing on14 July 2021.

6. Neither jurisdictional objection was supported by any evidence.

7. The response in so far as it relied at hearing on a submission that it did not dismiss the Applicant, this was rejected as baseless (per [11] of decision [2021] FWC 4357).

…

16. The Commission should not be influenced by the Respondent’s claim that it could only afford to pay $50 per week (per attachment GD12).

17. The Respondent has provided no transparent information about its finances at any point.

18. The Respondent claims in its outline of submissions (para 14) to have monthly expenses of roughly $28,755. There was no claim when this outline of submissions was prepared on 30 June 2021 that the business was necessarily in trouble.

19. This apparent fact of $28,755 monthly business expenses is only one part of the relevant equation. The Respondent has not provided any information about income.

20. It appears unlikely that the assertion that the Respondent could only afford to pay $50 a week is genuine where it asserts to have routine business expenses of nearly $29,000 per month (around $6,600 per week).

21. We submit that the Commission should make the order for costs as set out in the application.

22. The costs have been calculated in accordance with the Schedule of Costs and are reasonable, having regard to the recent Full Bench decision in Vassallo v Easitag Pty Ltd.” 1

[12] Those submissions are supported by Exhibit GD1. Exhibit GD1 also supports the costs sought by the Costs Applicant as set out and itemised in the Schedule of Costs.

[13] I equally note that Exhibit GD1 (at Annexures GD1 and GD4 to GD9), highlights that the Costs Respondent was clearly put on notice by Mr Dircks well before the hearing of the UD proceedings that the jurisdictional objections raised by the Costs Respondent were without basis in fact or law.

Relevant legislation

[14] The power to award costs under the FW Act is limited. In this regard, s.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 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).

[15] Section 400A of the Act provides:

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.

Case law

[16] In Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 2(Church), the Full Bench clearly articulated the relevant legislative provisions of the Act;

“[26] Section 611 sets out a general rule - that a person must bear their own costs in relation to a matter before the Commission (s.611(1)) - and then provides an exception to that general rule in certain limited circumstances. The Explanatory Memorandum confirms this interpretation of the section, it is in the following terms:

2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.

2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.

2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.

2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.

[27] In the context of s.570 and its legislative antecedents, courts have observed that an applicant who has the benefit of the protection of a provision such as s.570(1), (ie the general rule that parties bear their own costs), will only rarely be ordered to pay costs and that the power should be exercised with caution and only in a clear case. In our view a similarly cautious approach is to be taken to the exercise of the Commissions powers in s.611 of the FW Act.” 3

[17] In Hansen v Calvary Health Care Adelaide Limited 4 a Full Bench of the Commission said in relation to s.611 generally:

“[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).

[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all.”

[18] In Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth v Rick Adaszko, 5 Deputy President Beaumont crucially noted that:

“The starting point in relation to costs of proceedings before the Commission is that each person involved in a matter must bear their own costs. This statutory imperative is said to have derived from the policy purpose that a person is entitled to make or defend an application made under the Act, without the risk that a costs order may be made against them.”

[and]

“Section 611 contains no indication of the considerations which the Commission must take into account in deciding how to exercise its discretion. The discretion conferred is expressed in general, unqualified, terms.” 6

s.611(2)(a)

[19] The relevant principles concerning the interpretation and application of s.611(2)(a) of the Act were comprehensively stated in Church, and can be summarised as follows:

•  An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.

•  An application is not made without reasonable cause simply because the application did not succeed.

•  Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether there was no substantial prospect of success.

•  If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to characterise the application as having been made without reasonable cause.

•  In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.

•  An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed. 7

s.611(2)(b)

[20] In relation to s.611(2)(b), the principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 8 (footnotes omitted):

“[10] The concepts within s.611(2)(b) ‘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.” 9

[21] In Keep v Performance Automobiles Pty Ltd, 10 a Full Bench further stated:

“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.

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’. In Deane v Paper Australia Pty Ltd 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’.” 11

[22] In Qantas Airways Limited v Mr Paul Carter, 12 the Full Bench stated that it was clear from the terms of s.611 that the point at which the Commission must determine whether or not an application was vexatious, without reasonable cause or had no reasonable prospect of success, was when the application was made.13

[23] It is also appropriate to refer to the decision of Justice Snaden of the Federal Court in Macushla Pty Ltd (Trading as Sunnytop Bakery Ciabatta Della Nonna) v El Souki 14:

“In Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166; (2014) 145 ALD 548 (Dowsett, Tracey and Katzmann JJ), a Full Court of this Court endorsed (at [9]) what was said about the application of s 570(2)(a) of the FW Act in Construction, Forestry, Mining and Energy Union v Corinthian Industries (Australia) Pty Ltd (No 2) [2014] FCA 351 (Pagone J). There, Pagone J, at [8], said that:

‘...[t]o exercise the discretion conferred by [s 570(2)(a) of the FW Act] the Court must be satisfied that the claims were, relevantly, instituted without reasonable cause. That is not established merely because a party fails in the claims: R v Moore; ex parte Federated Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470, 473. The relevant provisions reflect ‘a policy of protecting a party instituting proceedings from liability for costs’ and costs will rarely be awarded unless justified by exceptional circumstances: see Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 at [60]. In Kangan Batman Institute it was said by the Full Court at [60] that ‘a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure’. In Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 Wilcox J indicated at 264 that one way of testing whether a proceeding was instituted ‘without reasonable cause’ was to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no ‘substantial prospect of success’. His Honour went on to say that a proceeding lacks a reasonable cause where it is clear that it must fail on the applicant’s own version of the facts.’” 15

s.400A

[24] The Explanatory Memorandum to the Fair Work Bill 2012 states the following with respect to s.400A of the Act:

“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.”

[25] Relevantly, the Full Bench of the Commission said in Gugiatti v SolarisCare Foundation Ltd 16 that:

“s.400A is concerned with unreasonable acts or omissions in connection with the “conduct or continuation” of a matter already instituted, not with whether it was reasonable to have instituted a matter in the first place.”

[and]

“Section 400A(1) establishes two pre-conditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.” 17

Consideration

[26] In this matter, I am satisfied that it should have reasonably been apparent to the Costs Respondent that each and every one of the Costs Respondent's jurisdictional objections to the Costs Applicant’s unfair dismissal claim had no reasonable prospects of success (on the facts or the law) (s.611(2)(b) of the Act).

[27] I am also satisfied that the Costs Respondent caused costs to be incurred because of an unreasonable act or omission of the Costs Respondent in connection with the conduct of continuation of the matter, i.e. via the pursuit of jurisdictional objections to the Costs Applicant’s unfair dismissal claim that had no reasonable prospects of success (on the facts or the law) (s.400A(1) of the Act).

[28] In respect of the foregoing two findings, I rely upon my findings in the Decision (see [2021] FWC 4357, at [5] to [11], and [32] to [34]). The Applicant was never a “volunteer” (she was at all times a national system employee). The Costs Respondent had no regard to the Small Business Fair Dismissal Code prior to or at the time it dismissed the Applicant. There has never been any ambiguity that the Applicant’s “dismissal” occurred at the initiative of the Costs Respondent.

[29] Ms Wen made no submissions going to whether or not it would be appropriate to exercise my discretion to award costs in the Costs Applicant’s favour. I am not aware of any reason as to why I ought not exercise my discretion to award costs in this matter as set out in the Costs Applicant’s Schedule of Costs. Accordingly, I will make an Order for costs in favour of the Costs Applicant, being costs to be paid by the Costs Respondent to the Costs Applicant in the amount of $5,172.00. An Order [PR733340] to this effect was issued on 1 September 2021.

Failure to Comply with Orders of the Commission dated 14 July 2021

[30] The Costs Respondent has failed to comply with the Commission Orders made 14 July 2021 in the UD proceedings. In this regard, Mr Dircks sent correspondence dated 15 July 2021 18, whereby he highlights to Ms Wen the Orders made the day before, and requests that they be complied with by 27 July 2021 (as ordered). Mr Dircks indicates to Ms Wen that if the Orders are complied with, he will not be seeking costs on behalf of the Applicant, but that if the Orders are not complied with, his instructions would be to make an application for costs.

[31] The foregoing correspondence was emailed, and sent by post, to Ms Wen of the Respondent. Ms Wen did not respond by 27 July 2021. On 28 July 2021, Ms Wen provided a response, which reads:

“Dear Gary,

Thank you for your email.

I transferred $50 to Tiffany's account. According to my current finances, that is I can afford to pay every week to

Tiffany.

Thank you!” 19

[32] There has been no application to the Commission for this payment arrangement to occur, nor is the Commission aware of any evidence that would justify such payment arrangement.

[33] Notwithstanding the foregoing, the issue is not relevant to my Decision in this Costs Application.

DEPUTY PRESIDENT

Appearances:

Mr Garry Dircks of Just Relations - Consultants for the Costs Applicant

Ms I-Chuan Wen, Owner and Director for the Costs Respondent

Printed by authority of the Commonwealth Government Printer

<PR733339>

 1   Submissions of the Costs Applicant dated 5 August 2021, at [1]-[7], [16]-[22].

 2   [2014] FWCFB 810, 240 IR 377.

 3 Ibid, at [26].

 4   [2016] FWCFB 8162.

 5   [[2021] FWC 4632.

 6   Ibid, at [31] and [33].

 7   [2014] FWCFB 810, 240 IR 377, at [23]-[33].

 8   [2011] FWAFB 4014, 211 IR 374.

 9 Ibid at [10].

 10   [2015] FWCFB 1956.

 11   Ibid, at [18]-[19].

 12   [2013] FWCFB 1811, at [20].

 13   See also Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth v Rick Adaszko [2021] FWC 4632, at [39], and Oz & Kosaroglu v Amity College Australia Limited [2021] FWC 5041, at [37]-[38].

 14 [2019] FCA 643.

 15 Ibid, at [15].

 16   [2016] FWCFB 2478.

 17   Ibid, at [61] and [43] (cited in Anthony Christensen v PGG Wrightson Seeds (Australia) PTY LTD T/A PGG Wrightson Limited[2018] FWC 1766).

 18   Exhibit GD1, Annexure GD11.

 19   Exhibit GD1, Annexure GD12.