Troy Harris v Laing O'Rourke Australia Construction Pty Ltd

[2017] FWC 2908

[2017] FWC 2908

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Troy Harris
v
Laing O’Rourke Australia Construction Pty Ltd
(U2016/11192)

COMMISSIONER SAUNDERS NEWCASTLE, 30 MAY 2017

Application for costs – application dismissed

[1] On 7 March 2017, I decided that Mr Troy Harris was not employed by Laing O’Rourke Australia Construction Pty Ltd (LORAC) for at least the minimum employment period at the time of his dismissal. Because Mr Harris was not a person who was protected from unfair dismissal at the time of his dismissal, I dismissed his unfair dismissal application. 1

[2] On 20 March 2017, LORAC filed an application for costs against Mr Harris and the firm of solicitors who represented Mr Harris in the unfair dismissal proceedings, Harris Wheeler Lawyers (HWL). LORAC also sought to amend its costs application to make Mr Tony Cardillo, solicitor, an additional respondent to the costs application. That application was not opposed by Mr Cardillo, and I grant leave for Mr Cardillo to be joined as an additional respondent to the costs application.

Basis for costs application

[3] LORAC seeks costs against:

(a) Mr Harris pursuant to ss. 400A and/or 611 of the Fair Work Act 2009 (Cth) (Act);

(b) HWL pursuant to s.401 of the Act; and

(c) Mr Cardillo pursuant to s.401 of the Act.

Claim for costs against Mr Harris

[4] LORAC contends that: 2

(a) Mr Harris acted unreasonably by:

(i) making and continuing his unfair dismissal application in reliance on his knowingly false claim that his employment with LORAC was continuous for the purposes of the minimum employment period under s.383 of the Act;

(ii) giving knowingly false evidence in the proceedings that his employment with LORAC was not terminated on 30 April 2016;

(iii) failing to discontinue his unfair dismissal application after having been put on notice of LORAC’s jurisdictional objections; and

(iv) failing to discontinue his unfair dismissal application when LORAC offered to consent to the discontinuance of the proceedings with no payment of its costs by Mr Harris

(b) Mr Harris made his unfair dismissal application without reasonable cause by relying singularly on the knowingly false claim that his employment was continuous between two separate periods of employment with LORAC; and

(c) it should have been reasonably apparent to Mr Harris that his application front for dismissal had no reasonable prospects of success given that he was based on his false claims, that the Commission’s authorities were contrary to his contentions as to continuous service, and that he was represented by lawyers for the whole of the proceedings who could advise him as to it having no reasonable prospects of success.

Claim for costs against HWL and Mr Cardillo

[5] LORAC contends that: 3

(a) it was unreasonable for HWL and Mr Cardillo to encourage Mr Harris to commence the proceedings when it should have been apparent that there was no reasonable prospect of success;

(b) it was an unreasonable act for HWL and Mr Cardillo to continue the proceedings after having been put on notice of LORAC’s jurisdictional objections;

(c) it was an unreasonable act for HWL and Mr Cardillo to continue the proceedings in the face of multiple authorities of the Commission which had ruled against the arguments that they put on Mr Harris’ behalf;

(d) it was an unreasonable act for HWL and Mr Cardillo to attempt to support untenable proceedings by successive changes to the basis on which they put arguments to justify Mr Harris’ claim that his employment was continuous despite termination of his earlier employment with LORAC and his later reemployment; and

(e) it was an unreasonable act for HWL and Mr Cardillo not to advise Mr Harris to discontinue the proceedings when LORAC offered to forgo its costs if he did so. In the alternative, it was an unreasonable act for HWL and Mr Cardillo to continue to act for Mr Harris in untenable proceedings after that offer was made.

Relevant legal principles

[6] Section 611(1) of the Act establishes a general rule that parties in proceedings before the Commission must bear their own costs. There are a number of provisions in the Act which operate as exceptions to this general rule and allow costs to be awarded in specific circumstances. Sections 400A, 401 and 611(2) of the Act are three such exceptions.

[7] Section 400A of the Act provides as follows:

“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.”

[8] Section 400A(1) of the Act establishes two preconditions for the making of an order for costs:

(a) First, the Commission must be satisfied that the party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter; and

(b) Secondly, such act or omission caused the other party to the matter to incur costs.

[9] If these two preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened.

[10] Section 401(1A) provides as follows:

“401 Costs orders against lawyers and paid agents

…

(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.”

[11] In Rohan Veal v Sundance Marine Pty Ltd, 4 a Full Bench of the Commission stated (at [15]):

“… because the section applies to the actions taken or not taken by a legal representative of a party it seems to us to follow that these actions or omissions by legally qualified and trained people should be measured against a higher standard than that which would apply to an unrepresented party, by virtue of the representative’s training and expertise.”

[12] Section 611(2) of the Act provides as follows:

“(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.”

[13] The relevant principles concerning the interpretation and application of s.611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing 5and may 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 was 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, or manifestly groundless, or discloses a case where the tribunal is satisfied cannot succeed.

[14] In relation to s.611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd 6as follows (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.”

Consideration

[15] The basis on which I decided to dismiss Mr Harris’ unfair dismissal application is central to the determination of the costs application made by LORAC. I did not decide the jurisdictional point on the basis of any belief, expectation, or subjective understanding held by Mr Harris in relation to whether or not he had continuing employment with LORAC or a reasonable expectation of re-employment by LORAC. Those matters were irrelevant to my determination of LORAC’s jurisdictional objection to the application. 7 They could have been ignored by LORAC.

[16] My decision to dismiss Mr Harris’ unfair dismissal application turned on my findings in relation to the proper construction of a range of provisions in the Act. 8 In that regard, I agreed with the conclusion reached by two other members of the Commission in first instance decisions, and respectfully disagreed with the obiter remarks by another member in a different first instance decision.9 There was no Full Bench authority on the issue. Mr Harris submitted that I should follow the obiter remarks by Commissioner Cambridge in Kefer v Tattersall’s Holdings Pty Ltd.10 Although I respectfully declined to do so for the reasons given in the Primary Decision, I am satisfied that Mr Harris’ case was arguable.

[17] Because Mr Harris’ success on the jurisdictional issue depended on the resolution in his favour of an arguable point of law, it is inappropriate to characterise the application as having been made without reasonable cause.

Conclusion

[18] For the reasons set out above, I am satisfied that:

(a) although Mr Harris’ unfair dismissal application was dismissed, he had reasonable prospects of success on the basis of his arguments concerning the proper construction of the Act. It follows that Mr Harris did not make his application without reasonable cause, it should not have been reasonably apparent to Mr Harris, HWL or Mr Cardillo that Mr Harris’ unfair dismissal application had no reasonable prospect of success, and Mr Harris, HWL and Mr Cardillo did not act unreasonably in connection with the decision by Mr Harris to continue with his application and not to discontinue it when given the opportunity to do so by LORAC; and

(b) there was no unreasonable act or omission on the part of Mr Harris, HWL or Mr Cardillo which caused LORAC to incur costs in having Mr Harris’ unfair dismissal application dismissed for want of jurisdiction. Such costs were incurred by LORAC in connection with its participation in a hearing in which an arguable point of law was decided in LORAC’s favour.

[19] Accordingly, I dismiss LORAC’s application for costs against Mr Harris, HWL, and Mr Cardillo.

COMMISSIONER

 1   Harris v Laing O’Rourke Australia Construction Pty Ltd[2017] FWC 1204 (Primary Decision)

 2   LORAC’s Application for Costs dated filed on 20 March 2017, LORAC’s submissions in chief filed on 11 April 2017, together with the affidavit of Mr Darren Neilson, and LORAC’s submissions in reply filed on 9 May 2017

 3   LORAC’s Application for Costs dated filed on 20 March 2017, LORAC’s submissions in chief filed on 11 April 2017, together with the affidavit of Mr Darren Neilson, and LORAC’s submissions in reply filed on 9 May 2017

 4   [2013] FWCFB 8960

 5   [2014] FWCFB 810 at [23]-[33]

 6   [2011] FWAFB 4014; (2011) IR 174

 7   Primary Decision at [23]

 8   Primary Decision at [4]-[9]

 9   Primary Decision at [9]

 10   [2012] FWA 2375

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