Tyrone Taiepa v Shinsen Taijutsu Pty. Ltd T/A Mma247
[2018] FWC 1788
•27 MARCH 2018
| [2018] FWC 1788 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Tyrone Taiepa
v
Shinsen Taijutsu Pty. Ltd T/A MMA247
(U2017/9842)
DEPUTY PRESIDENT CLANCY | MELBOURNE, 27 MARCH 2018 |
Application for costs - costs claimed by Respondent for representation by consultant engaged as paid agent to prepare initial response material and material in response to Commission requirements – indemnity costs awarded.
[1] On 6 March 2018, I made an interim decision 1 in relation to an application to the Commission for an order for costs made by Shinsen Taijutsu Pty. Ltd T/A MMA247 (Shinsen) against Mr Tyrone Taiepa (the costs application).
[2] Mr Taiepa had previously made an unfair dismissal application against Shinsen but it was dismissed by Commissioner Bissett on 1 December 2017 for reason of his failure to comply with directions and his non-attendance at a hearing held by the Commission.
[3] The costs application against Mr Taiepa is made under both s.400A and s.611 of the Fair Work Act 2009 (the Act), which provide for exceptions to the general rule that each party bears its own costs in proceedings before the Commission. 2 It is validly made, having been filed within 14 days after the decision and order of Commissioner Bissett.3
Background to the costs application
[4] I outlined the background to the costs application in the interim decision but it is worth doing so again.
[5] In making his unfair dismissal application, Mr Taiepa alleged he was notified of his dismissal by Shinsen on 22 August 2017, with it taking effect the same day. Mr Taiepa had worked as a personal trainer at Shinsen’s gymnasium.
[6] On 18 September 2017, Shinsen filed its Form F3—Employer Response to Unfair Dismissal Application (Form F3). Shinsen raised jurisdictional objection that there was no dismissal because Mr Taiepa had voluntarily resigned his employment. On an alternative basis, it asserted it was a small business and the dismissal was consistent with the Small Business Fair Dismissal Code (SBFDC).
[7] The matter was initially listed for conciliation on 5 October 2017, however it did not take place because Mr Taiepa could not be contacted at the relevant time. Mr Taiepa sent an email to the Commission later that day requesting that his application proceed, stating that he missed the conciliator’s calls due to technical issues with his mobile phone. He provided alternative dates and times upon which he requested that conciliation proceed.
[8] In response, the Commission attempted to telephone Mr Taiepa to advise that the times provided were not suitable for a further conciliation, however there was again no answer and a voicemail message was left seeking a return call. There was no response from Mr Taiepa to these attempts so the matter was referred for arbitration.
[9] On 23 October 2017, a Notice of Listing was sent to the parties requiring:
• Shinsen to file and serve its Outline of Argument in relation to its jurisdictional objections, any Statements of Evidence and its Document List by no later than noon on 6 November 2017;
• Mr Taiepa to file and serve his material responding by no later than noon on 13 November 2017; and
• Shinsen to file and serve any material in reply by 20 November 2017.
[10] The matter being listed for a Jurisdiction and Arbitration Conference/Hearing on 18 December 2017.
[11] Shinsen filed and served its most of its material on 1 November 2017 and one final piece of documentation was filed and served on 8 November 2017.
[12] On 10 November 2017, the Commission sent a Short Message Service (SMS) reminder to Mr Taiepa that his material was due to be filed by noon on Monday 13 November 2017. In the afternoon of 13 November 2017, the Commission sent Mr Taiepa an email advising that in the absence of submissions or an extension request being received, his matter would be listed for a non-compliance hearing on 17 November 2017.
[13] On 15 November 2017, Shinsen called the Commission to enquire as to whether submissions had been received from Mr Taiepa. A Commission staff member advised that as it did not appear that Mr Taiepa had filed any material nor requested an extension to do so, the matter would proceed to a non-compliance hearing. Later that day, the Commission made two attempts to contact Mr Taiepa via telephone, however there was no answer and voicemails messages were left requesting a return call. On 16 November 2017, a non-compliance hearing was listed by the Commission.
[14] The non-compliance hearing proceeded before Commissioner Bissett on 17 November 2017. Mr Taiepa did not attend. Shinsen made an oral application, pursuant to s.399A of the Act, that the matter be dismissed as Mr Taiepa had failed to comply with a direction of the Commission. Commissioner Bissett waived compliance with the Fair Work Commission Rules 2013 and accepted Shinsen’s oral application. Correspondence was then sent to Mr Taiepa informing him of Shinsen’s s.399A application. Mr Taiepa was directed to file submissions and other documentary material in respect of the s.399A application by close of business on 24 November 2017.
[15] This correspondence was sent via email and post to Mr Taiepa. Mr Taiepa did not file a response within the required time or in the period after it so Commissioner Bissett considered the material before the Commission and dismissed the unfair dismissal application on the basis that Mr Taiepa unreasonably failed to both comply with directions to file material and attend the non-compliance hearing on 17 November 2017.
[16] On 29 November 2017, the Commission had received a telephone call from Shinsen and was informed that Shinsen intended to complete and submit a Form F6 - Application for costs (Form F6).
[17] The decision 4 and order5 dismissing Mr Taiepa’s unfair dismissal application were published by the Fair Work Commission (the Commission) on 1 December 2017.
[18] On 6 December 2017, the Commission received an email from Ms Amanda Wallace of Innovative Bookkeeping Studio (Innovative) which attached a Form F6- Application for Costs signed by Mr Valere Kolker, Director of Shinsen. This email stated “[P]lease find attached our F6 Application Form for Costs Recovery relating to the matter… [T]hese documents are lodged for and on behalf of Shinsen Taijutsu Pty Ltd T/A MMA247”.
Basis for costs application
[19] Shinsen seeks costs against Mr Taiepa pursuant to ss.400A and 611 of the Act, on the grounds that, following Mr Taiepa’s filing the unfair dismissal application:
a) It was present for the telephone conciliation on 5 October 2017 but Mr Taiepa did not attend, was not contactable and, after the event, gave the explanation that his telephone was broken;
b) It complied with the requirements to file its material but Mr Taiepa did not file and serve his materials, as required, by the compliance date of 13 November 2017; and
c) It attended the non-compliance hearing on 17 November 2017 but Mr Taiepa did not.
[20] No further particulars in relation to these grounds were provided, however an itemised schedule of costs was submitted by Shinsen which were said to have arisen from “[A] consultant who was engaged to assist in the preparation and responses and to ensure all matters requested by the Fair Work Commission were addressed and attended to, in the time frames specified”.
[21] The total costs amount of $1,320.00 was described as relating to “[C]onsultants work in preparing and complying with ALL requests from Fair Work Commission throughout this process”.
[22] This itemised schedule of costs was accompanied by a tax invoice on Innovative’s letterhead that was dated 28 November 2017 and addressed to MMA247 (Shinsen). This invoice provided the total amount of $1,320.00 was calculated in relation to the following:
a) A claim for $220.00 for: “13.09.17 Review and commence response to Fair Work Commission’s ‘Fair Dismissal Remedy’ as per letter dated 13 September 2017. Taiepa v Shinsen Taijutsu PL”;
b) A claim for $220.00 for: “20.09.17 Ensure all works have been completed and submitted as per FWC request”;
c) A claim for $440.00 for: “25.10.17 Review and commence response to Fair Work Commission’s Notice of Hearing (Jurisdictional) listed for 19 December 2017. Letter dated 23 October 2017”;
d) A claim for $440.00 for “01.11.17 Finalise Outline of Argument as required by 5 November 2017. Includes site visit to MMA247 to confirm witness statements and gather supporting documentation”
The interim decision
[23] In the interim decision, I outlined how Shinsen had engaged Innovative to assist it with its defence of the unfair dismissal application and was seeking the costs that it has incurred in doing so. I outlined the definition of “paid agent” in the Act and considered the scope of the representation referred to in s.596 of the Act, in light of the recent Full Bench decision in Fitzgerald v Woolworths Limited (Fitzgerald), 6 and was satisfied that the definition of “paid agent” in the Act is broad enough to encompass Innovative and that the work it undertook for Shinsen, the cost of which Shinsen now claims, is capable of falling within the scope of representation by a paid agent.
[24] Further, I did not consider Shinsen is precluded from making application for the costs it incurred as a result of having retained the services of Innovative Bookkeeping Studio.
[25] Noting that Mr Taiepa has not engaged with this matter in any way since 5 October 2017, I made directions on 6 March 2017, directing Mr Taiepa to file in the Commission and serve on Shinsen by 4.00pm on 20 March 2018:
a) Submissions and any other material upon which he intends to rely in reply to the grounds on which the costs are sought, outlined at paragraph 2.2 in the Form F6 - Application for costs filed by Shinsen on 6 December 2017 and the email dated 10 January 2018 from Ms Amanda Wallace to the Commission; and
b) Submissions in reply to the itemised Schedule of Costs attached to the Form F6 - Application for costs filed by Shinsen on 6 December 2017.
[26] These documents were emailed to Mr Taiepa with the directions, which also outlined that if I did not receive any submissions from him by 4.00pm on 20 March 2018, I would determine the costs application based on the material currently before the Commission.
[27] Mr Taiepa filed no material and so I will now determine the costs application based on the material currently before the Commission.
Consideration – s.400A
[28] 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.’
[29] Section 400A was inserted into the Act by virtue of the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Amendment Bill 2012 states:
“Parts 3 and 4 of Schedule 6 to the Bill enhance the FWC’s ability to order costs against a party and/or their representative in unfair dismissal matters. The new ‘party costs’ provision applies where a party to an unfair dismissal matter (either an employee or employer) has caused the other party to incur costs by an unreasonable act or omission. Under section 401 of the FW Act, lawyers and paid agents may currently be exposed to costs orders if FWA has granted permission for a person to be represented in an unfair dismissal matter. The Bill will provide for the FWC to order costs against a lawyer or paid agent whether or not the FWC has given permission for a person to be represented.
The amendments strike a balance between the need to protect workers from unfair dismissal, and to provide a deterrent against unreasonable conduct during proceedings. The amendments will enable costs orders to be more easily made in the case of unreasonable conduct but will not prevent genuine claims from being pursued. They will discourage frivolous and speculative claims and assist in the efficient resolution of claims by encouraging all parties to approach proceedings in a reasonable manner. These measures are reasonable and proportionate to address the time and expense that an unreasonable conduct by a participant and/or their representative may cause another party to incur” 7 (my emphasis)
and
“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.” 8
[30] The Full Bench of the Commission said in Gugiatti v SolarisCare Foundation Ltd 9(Gugiatti), 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.”10
[31] The Full Bench also stated:
“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.” 11
[32] Section 400A of the Act provides that costs may be awarded to Shinsen if I am satisfied that the costs it claims were incurred as a result of an unreasonable act or omission of Mr Taiepa, in connection with the conduct or continuation of the unfair dismissal application. However, even if I am satisfied that the relevant circumstances exist, I am not obliged to order costs. It is a discretionary decision. The legislative intent behind s.400A was that the power to award costs is to be exercised only in clear cases of unreasonable conduct.
[33] Section 400A was further considered by Commissioner Bissett in Emma Sidney v Employsure Pty Ltd (Sidney). 12 The Commissioner extrapolated the following from various authorities considered in Roy Morgan Research v Baker (Roy Morgan)13in the following manner:
“[28] The authorities relevant to a consideration of the phrase ‘unreasonable act or omission’ were considered in the decision of the Full Bench in Roy Morgan Research v Baker. I do not repeat those provisions here but note the following can be taken from those authorities:
• A failure to inform another party of an inability to attend proceedings would be, if intentional, unreasonable and if accidental, an unreasonable omission;
• a failure to advise the other party of the first party’s intentions, if deliberate or reckless, would be unreasonable and if an omission could be equally unreasonable;
• very strong prospects of success will not always justify a failure to participate in settlement negotiations;
• a reasonable person will determine if and how to respond to an offer of settlement after considering all of the circumstances of the case including the terms of settlement in relation to the relief sought; the relative strength of the parties cases; the likely length and cost of proceeding to hearing if the matter does not settle; and adverse consequences of acceptance of a settlement rather than prosecuting or defending the primary application.’’ (my emphasis)
[34] Having regard to the wording of s.400A, the references to it in the Explanatory Memorandum to the Fair Work Amendment Bill 2012 and consistent with Gugiatti, I do not consider the first two items for which costs are claimed in (a) and (b) of paragraph [22] above fall within the scope of s.400A. I note these items relate to legal costs incurred up to and including the filing and service of the Form F3. While I note Rule 19 of the Fair Work Commission Rules 2013 requires a respondent to an unfair dismissal application to lodge its response within 7 calendar days after it was served with the application and Shinsen had received a letter to this effect from the Commission dated 12 September 2017 to this effect, it seems to me that s.400A was intended to cover costs incurred that are caused by the other party to a matter once it is further progressed, that is, beyond the initial requirement to file a Form F3—Employer Response to Unfair Dismissal Application in direct response to a Form F2 — Unfair Dismissal Application.
[35] In particular, I have had regard to the statement in the Explanatory Memorandum, “The amendments strike a balance between the need to protect workers from unfair dismissal, and to provide a deterrent against unreasonable conduct during proceedings.” 14 It seems to me that the costs incurred in the preparation and lodgement of a Form F3—Employer Response to Unfair Dismissal Application, if claimed against Mr Taiepa, are more appropriately sought through an application made pursuant to s.611 of the Act.
[36] As to the remaining two items for which costs are claimed, outlined in (c) and (d) of paragraph [22] above, they relate to costs incurred in response to the Commission’s requirements for Shinsen to file and serve its material in relation to its jurisdictional objections to the unfair dismissal application. The usual Commission practice, when a jurisdictional objection is raised, is to require the respondent to file and serve its material first. In this matter, the filing and service of this material was the next procedural step, once the conciliation conference did not place.
[37] A conciliation conference was first scheduled in this matter because Shinsen was prepared to participate. However, one did not take place, initially, because Mr Taiepa could not be contacted when it was originally to take place and then, because he did not respond to follow-up contact from the Commission aimed at arranging a new date and time for one. There was in fact no further communication or participation in the matter from or by Mr Taiepa after 5 October 2017. If Mr Taiepa’s intention was to abandon his unfair dismissal application, he did not communicate this to either the Commission or Shinsen at any time up until the decision and order of Commissioner Bissett on 1 December 2017.
[38] The Full Bench in Gugiatti had considered the legislative history lying behind s.400A. In this regard, it was prepared to infer “…that the legislative intention in the enactment of s.400A of the FW Act was to re-introduce the costs provision in s.170CJ(3) of the WR Act as it was after the Workplace Relations Amendment (Termination of Employment) Act 2001…” 15
[39] The phrase “unreasonable act or omission” was used in s.170CJ(3) of the Workplace Relations Act 1996 (the WR Act). Sections 170CJ(1), (2) and (3) of the WR Act provided:
“170CJ Commission may order payment of costs
(1) If the Commission is satisfied:
(a) that a person (first party):
(i) made an application under section 170CE; or
(ii) began proceedings relating to an application; and
(b) the first party did so in circumstances where it should have been reasonably apparent to the first party that he or she had no reasonable prospect of success in relation to the application or proceeding;
the Commission may, on application under this section by the other party to the application or proceeding, make an order for costs against the first party.
(2) If the Commission is satisfied that a party (first party) to a proceeding relating to an application under section 170CE has acted unreasonably in failing:
(a) to discontinue the proceeding; or
(b) to agree to terms of settlement that could lead to the discontinuance of the application;
the Commission may, on an application under this section by the other party to the proceeding, make an order for costs against the first party.
(3) If the Commission is satisfied:
(a) that a party (first party) to a proceeding relating to an application made under section 170CE caused costs to be incurred by the other party to the proceeding; and
(b) that the first party caused the costs to be incurred because of the first party’s unreasonable act or omission in connection with the conduct of the proceeding;
the Commission may, on an application by the other party under this section, make an order for costs against the first party.” (my emphasis)
[40] As was noted by the Full Bench in Roy Morgan, the unreasonable act or omission phrase in s.170CJ(3) of the WR Act was considered in Goffet v Recruitment National Pty Ltd, 16 which concerned a failure by a party to attend conciliation proceedings, followed by a further failure to take steps to inform the other party of its intentions immediately after the issue of the notice of listing. In respect of that further failure, the Full Bench in Goffett stated:
“[47] The Respondent’s failure to take steps to inform the Appellant of its intentions immediately after the issue of the notice of listing was either a deliberate or reckless act that could not be regarded as anything other than unreasonable. Alternatively, to the extent that the failure might be regarded as an omission, it was equally unreasonable. That those unreasonable acts or omissions caused the Appellant to incur the costs in connection with the conduct of the proceeding is unquestionable. We are satisfied that the Respondent must be ordered to pay the Appellant’s costs of and incidental to the submissions and preparation for arbitration. We allow also the costs on an indemnity basis in respect of the costs application.”
[41] The question for me to determine for the costs application that is made pursuant to s.400A, is whether Mr Taiepa’s failure to communicate his intentions was an unreasonable omission in relation to the conduct or continuation of the unfair dismissal application. On one view it might be said that he should have communicated this after 5 October 2017 and prior to the Commission’s requirements being issued two and a half weeks later, on 23 October 2017.
[42] During this time, he had the ongoing opportunity to assess his position in light of the Form F3 that had been filed by Shinsen. The Form F3 addressed each of the allegations made by Mr Taiepa in his Form F2 — Unfair Dismissal Application. On another view, it might be said that it was not unreasonable for Mr Taiepa to have waited until he had the opportunity to consider his position in light of the submissions, witness statements and documents filed by Shinsen in accordance with the Commission’s requirements issued on 23 October 2017.
[43] In the circumstances of this case, I am satisfied that the failure of Mr Taiepa to advise Shinsen of his intentions in relation to the unfair dismissal application after 5 October 2017 was a reckless act capable of being regarded as unreasonable. I am satisfied the omission can be construed as deliberate or reckless. Mr Taiepa’s complete failure to either engage with the Commission process after 5 October 2017 or offer any explanation for it, despite multiple requests for his response and the scheduling of the non-compliance hearing on 17 November 2017 (see paragraphs [8]-[15] above) supports this conclusion. In the alternative, I am satisfied that if this ongoing failure is viewed as an omission, it was unreasonable.
[44] I am fortified in my conclusions having reviewed the Form F3 and the submissions Shinsen filed and served in response to the Commission’s requirements issued on 23 October 2017. In substance, the latter outline the same substantive allegations against Mr Taiepa as those outlined in the Form F3. In other words, Mr Taiepa was on notice of the nature and tenor of Shinsen’s response to his unfair dismissal application from the time he received the Form F3. The substance of Shinsen’s position did not materially change.
Consideration – s.611
[45] Section 611 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.”
[46] The determination of the s.611(2) part of the Costs Application requires me to ask the following questions when considering the first two items for which costs are derived in (a) and (b) of paragraph [22] above:
1) Did Mr Taiepa make his unfair dismissal application vexatiously or without reasonable cause (s.611(2)(a))?
2) Should it have been reasonably apparent to Mr Taiepa that his unfair dismissal application had no reasonable prospects of success (s.611(2)(b))?
Was Mr Taiepa’s unfair dismissal application made vexatiously or without reasonable cause (s.611(2)(a))?
[47] In Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (Church), 17the Full Bench considered the approach to be taken in determining whether proceedings have been instituted vexatiously or without reasonable cause and stated:
“[28] We now turn to the exceptions to the general rule expressed in s.611(1) and the meaning of the expression ‘vexatiously or without reasonable cause’.
[29] The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose ....is to harass or embarrass the other party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar observation in Hamilton v Oades in which they said:
“The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’.”
[30] We now turn to the expression ‘without reasonable cause’. 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. The test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union Wilcox J put it this way:
“It seems to me that one way of testing whether a proceeding is instituted ‘without reasonable cause’ is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, 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 stigmatise the proceeding as being ‘without reasonable cause’. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.” ” (references omitted)
[48] In Keep v Performance Automobiles Pty Ltd (Keep), 18 the Full Bench summarised the principles relevant to when an application is made without reasonable cause 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 (Church). 19 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. 20
(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. 21
(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. 22
(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” 23 (references from Church included)
[49] In this matter, there were multiple, serious allegations said to have been raised by Shinsen against Mr Taiepa in the meeting that led to his resignation, including:
• Allegations that the full proceeds from a fundraising event (approximately $10,500.00) run by Mr Taiepa, at Shinsen’s premises and using advertising material with Shinsen’s logo, had not been forwarded to the three nominated charities. The event was held in May 2017 and at least one of the three charities had written to Mr Taiepa on 19 July 2017, noting no funds had been received from him;
• Bullying the cleaner at Shinsen’s premises by hiding her equipment and then accusing her of not doing her job properly;
• Using an unauthorised portable EFTPOS machine to sell Shinsen equipment while under their employ, and charging and debiting a client of Shinsen’s gym fees, which were not accounted for nor passed on to Shinsen;
• Bullying clients of Shinsen that led to them leaving the Gymnasium; and
• Leaving a roller door to the premises open on multiple occasions, when he was required to keep it closed to prevent the entry of non-paying users to the gymnasium.
[50] On the day he resigned, Mr Taiepa sent a text message to his manager stating “I enjoyed my time with You/Linda… and have only respect for the pair of you and the opportunity you gave me. I would still like to train as a paying member if that’s ok with you…” The following day, he foreshadowed to his manager in another text message his intention to post on Shinsen’s Facebook page a statement that he had resigned. He subsequently did so, closing his message with the statement “I hope you all give the same respect to the other coaches as you have given me…” The details of the text messages and Facebook post were included with Shinsen’s Form F3. At some point thereafter, Mr Taiepa had a change of heart.
[51] As to whether Mr Taiepa made his unfair dismissal application (on the 20th day after his termination took effect) vexatiously, I am satisfied he did. The facts of this case are such that I am persuaded the predominant purpose of Mr Taiepa was to harass or embarrass Shinsen.
[52] As to whether Mr Taiepa made his unfair dismissal application “without reasonable cause”, I have considered whether upon the facts known to Mr Taiepa at the time of instituting the unfair dismissal application, there was no substantial prospect of success. Having regard to the allegations outlined above, I am satisfied that on the facts apparent to Mr Taiepa at the time of instituting the proceeding, there was no substantial prospect of success. I consider these allegations provided reasonable grounds for Shinsen’s belief that Mr Taiepa’s conduct was sufficiently serious to justify immediate dismissal, which is what it would have had to address in raising the jurisdictional objection that it was a small business and the dismissal was constant with the Small Business Fair Dismissal Code. 24
[53] Having regard to my conclusions in relation to s.611(2)(a) of the Act, it is not necessary for me to consider s.611(2)(b) of the Act.
Assessment of Costs
[54] I therefore must decide whether I should exercise my discretion to order that Mr Taiepa pay these costs. In the circumstances of this case, I am satisfied I should. Mr Taiepa launched an untenable case and his subsequent failure to prosecute it in any way satisfies me that his motive in doing so was to harass, embarrass and inconvenience Shinsen.
[55] It would appear Shinsen is claiming costs on an indemnity basis because in itemising its claims, it makes no reference to the Schedule 3.1 - Schedule of Costs in the Fair Work Regulations 2009. Mr Taiepa was given an opportunity to make submissions in relation to the costs claimed by Shinsen but elected not to do so.
[56] It is open to me to order indemnity costs. They were awarded in Goffett. 25
[57] A total of $440.00 has been claimed for the work performed by Innovative in completing, filing and serving the Form F3. Item 101 of Schedule 3.1 - Schedule of Costs provides that either $210.00 or a sum at the discretion of the Commission can be awarded. In this matter, I consider it appropriate to award the sum of $440.00.
[58] A further sum of $880.00 has been claimed for the work performed by Innovative in response the Commission’s requirements, made on 23 October 2017, that it file and serve its Outline of Arguments, Statements of Evidence and Document List. I have determined, pursuant to s.400A of the Act, to award these costs because I have formed the view that the failure of Mr Taiepa to advise Shinsen of his intentions in relation to the unfair dismissal application after 5 October 2017 was a deliberate or reckless act capable of being regarded as unreasonable or, in the alternative, an unreasonable omission. I consider this case analogous to Goffett.
[59] In Goffett, the Full Bench of the Australian Industrial Relations Commission justified the awarding of indemnity costs when a party had failed to the other party of its intentions immediately after the issue of a notice of listing, considering it was either a deliberate or reckless act “that could not be regarded as anything other than unreasonable” 26 or an unreasonable omission, stating:
“It seems almost axiomatic that an unreasonable act of omission that causes a party to incur costs in a proceeding should be regarded as “some relevant delinquency”. 27
[60] As to the Schedule 3.1 - Schedule of Costs, Item 104 provides that either $125.00 or a sum at the discretion of the Commission can be awarded for instructing for a necessary document in response to directions given by the Commission and Item 203 provides that $74.00 can be awarded for a necessary document prepared in responses to directions given by the Commission. Shinsen filed an Outline of Arguments (Item 104), 5 Statements of Evidence (Item 203) and a Document List (Item 203). Therefore, if awarded in accordance with Schedule 3.1, the quantum would $569.00. However, in the circumstances of this matter, I am satisfied indemnity costs are appropriate and award the $880.00 claimed.
Conclusion
[61] For the reasons outlined above, I will exercise my discretion and order that Mr Taiepa pay the costs Shinsen incurred in engaging Innovative as a paid agent, which I have assessed at $1,320.00. An order to this effect will be issued separately.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR601512>
1 [2018] FWC 1358.
2 Section 611(1) of the Fair Work Act 2009.
3 Section 402 of the Fair Work Act 2009.
4 [2017] FWC 6381.
5 PR598267.
6 [2017] FWCFB 2797.
7 Explanatory Memorandum to the Fair Work Amendment Bill 2012, page 7.
8 Ibid at page 37.
9 [2016] FWCFB 2478.
10 Ibid at [61].
11 Ibid at [43].
12 [2016] FWC 2659.
13 [2014] FWCFB 1175 at [10].
14 Explanatory Memorandum to the Fair Work Amendment Bill 2012, page 7.
15 [2016] FWCFB 2478 at [39].
16 [2009] AIRCFB 626.
17 [2014] FWCFB 810.
18 [2015] FWCFB 1956.
19 [2014] FWCFB 810.
20 Ibid at [27].
21 Ibid at [30].
22 See Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30].
23 Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88]; Hatchett v Bowater Tutt Industries Pty Ltd (1991) 28 FCR 324 at 327; Re Ross and others, Ex Parte Crozier (2001) 111 IR 282 at [12]; Re Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v Australian Customs Service, PR926115, 23 December 2002 per Giudice J, Williams SDP and Foggo C and Church at [33].
24 See the Small Business Fair Dismissal Code in s.388 of the Fair Work Act 2009.
25 [2009] AIRCFB 626 at [48].
26 Ibid.
27 Ibid at [52], drawing on Oshlank v Richmond River Council (1998) 193 CLR 72 at 44.
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