Veal v Sundance Marine Pty. Ltd. As trustee for Sundance Unit Trust T/A Sundance Marine
[2013] FWCFB 8960
•11 DECEMBER 2013
| [2013] FWCFB 8960 |
| FAIR WORK COMMISSION |
CORRIGENDUM |
Fair Work Act 2009
s.402 - Application for costs orders against lawyers and paid agents under s.401
v
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A Sundance Marine
(U2012/13624)
(C2013/4599)
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A Sundance Marine
v
Rohan Veal
(U2013/12263)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | MELBOURNE, 29 SEPTEMBER 2014 |
Amended pursuant to paragraph 2(b) of the order of the Federal Court dated 28 August 2014 in matter VID78/2014 by deleting paragraphs 47-71 and 73-74 inclusive.
[1] The decision issued by the Commission on 11 December 2013 [[2013] FWCFB 8960] is amended with effect from 28 August 2014 pursuant to paragraph 2(b) of the order of the Federal Court dated 28 August 2014 in matter VID78/2014, which states:
The record contained in the Decision of the Full Bench of the Fair Work Commission dated 11 December 2013 is amended by deleting paragraphs 47-71 and 73-74 inclusive.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR555975>
| [2013] FWCFB 8960 |
DECISION |
Fair Work Act 2009 s.394—Unfair dismissal
s.402—Application for costs orders against lawyers and paid agents under s.401
v
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A Sundance Marine
(U2012/13624)
(C2013/4599)
Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A Sundance Marine
v
Rohan Veal
(U2013/12263)
SENIOR DEPUTY PRESIDENT O’CALLAGHAN | ADELAIDE, 11 DECEMBER 2013 |
Applications for costs - ss.400A, 401, 611 - unreasonable act or omission.
[1] This decision deals with two separate costs applications. An initial costs application was made by Mr Veal (U2012/13624) and, a subsequent costs application (U2013/12263) was lodged by Sundance Marine Pty Ltd as trustee for the Sundance Unit Trust T/A Sundance Marine (Sundance Marine) after an appeal made by Mr Veal (C2013/4599). A brief summary of the background to the applications is set out below.
[2] On 10 May 2013 Bissett C issued a decision 1 in which she found that the termination of Mr Veal’s employment with Sundance Marine, was unfair. Commissioner Bissett awarded Mr Veal compensation in lieu of reinstatement.
[3] Mr Veal subsequently made the initial application for costs against Sundance Marine and its legal representatives HR Legal, Mr Krins of HR Legal and Mr Maher, also of HR Legal. That application was made pursuant to ss.400A, 401 and 611 of the Fair Work Act 2009 (the FW Act).
[4] Mr Veal then lodged an appeal against the Commissioner’s decision. Commissioner Bissett deferred consideration of the initial costs application pending the determination of this appeal. The appeal was primarily directed at the Commissioner’s conclusions with respect to the amount of compensation payable to Mr Veal.
[5] In a decision 2 issued on 30 July 2013, this Full Bench refused the appeal. Sundance Marine then made a costs application (the second costs application), pursuant to ss.400A, 401 and 611 of the FW Act. In this costs application Sundance Marine sought costs on an indemnity basis, but alternatively, as might otherwise be specified against Mr Veal and/or his legal representatives, McDonald Murholme.
[6] The two discrete costs applications were referred to this Full Bench by the Fair Work Commission (FWC) President pursuant to ss.582 and 615 of the FW Act. This referral followed consultation with the parties. In referring the two matters, the President issued a direction pursuant to s.615B(3) that the Full Bench must, in dealing with the applications, take into account:
(a) everything that occurred before the FWC; and
(b) everything that the FWC did;
in relation to the matter before the Full Bench begin dealing with the applications.
[7] Initial Directions relative to the costs applications were issued on 30 August 2013. Those Directions advised that the Full Bench proposed to deal with both matters through the consideration of written submissions with an opportunity for submissions in reply. The Directions invited both parties to indicate if a hearing should be convened relative to the applications. Both parties have provided written submissions and submissions in reply. No request for a hearing has been made. On 15 November 2013 the Full Bench invited the parties to provide further submissions with respect to the application of ss.400A and 401 in their current form given that the termination of Mr Veal’s employment occurred before 1 January 2013. Both parties have subsequently revised their submissions. We have considered the applications in the context of these submissions, all of the circumstances of Mr Veal’s initial application and the appeal proceedings.
The history of the matter
[8] Mr Veal’s application was lodged on 26 September 2012. Mr Veal was represented by McDonald Murholme. The application was not resolved in a telephone conciliation conference on 15 October 2012. Shortly after that conference Mr Veal made a conditional formal settlement offer of $15,392 as part of a without prejudice position except as to costs. Sundance Marine, represented by HR Legal, responded confirming its preparedness to pay Mr Veal $12,000 subject to the terms of a proposed deed.
[9] McDonald Murholme and HR Legal then engaged in a series of communications about whether Mr Krins’ continued representation of Sundance Marine breached the relevant legal ethics. This issue was not resolved.
[10] A revised settlement proposal was presented by Mr Veal’s representative in December 2012 for some $34,000, again without prejudice save to costs. This settlement proposal was again presented on the basis that it was subject to arrangements in a specified deed. McDonald Murholme subsequently proposed further FWC mediation. This mediation proposal and the settlement proposal were rejected. Through its representatives, Sundance Marine reiterated its preparedness to settle the matter for $12,000 subject to a deed it proposed.
[11] There followed various correspondence relating to threatened legal action with respect to Mr Veal’s alleged use of confidential commercial information. Again, we do not understand that this issue was resolved or ultimately pursued.
[12] We note that the hearing before Bissett C commenced on 4 March 2013 and the Commissioner’s decision was issued on 10 May 2013.
The relevant costs provisions
[13] Section 400A came into effect on 1 January 2013. Schedule 11 “Application, transitional and savings provisions”, Part 6 Item 12 provides that this section operates in relation to dismissals that take effect after that date. The termination of Mr Veal’s employment took effect before 1 January 2013 and hence this section cannot have application in these circumstances. Both parties, in their supplementary submissions have recognised this and do not pursue their respective claims under this section.
[14] Section 401 is also the subject of an amendment which took effect from 1 January 2013 with respect to employment terminations which occurred after that date. Section 401, as it applied relative to this matter stated:
“Section 401 Costs orders against lawyers and paid agents
401(1) If FWA has granted permission in accordance with section 596 for a person to be represented by a lawyer or paid agent in a matter arising under this Part before FWA, FWA may make an order for costs against the lawyer or paid agent if FWA is satisfied:
(a) that:
(i) the lawyer or paid agent caused costs to be incurred by the other party to the matter because the lawyer or paid agent encouraged the person to start or continue the matter; and
(ii) it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or
(b) that the lawyer or paid agent caused costs to be incurred by the other party to the matter because of an unreasonable act or omission of the lawyer or paid agent in connection with the conduct or continuation of the matter.
401(2) FWA may make an order under this section only if the other party to the matter has applied for it in accordance with section 402.
401(3) This section does not limit FWA’s power to order costs under section 611.” 3
[15] Section 401 refers to the concept of whether it should have been reasonably apparent that a person had no reasonable prospect of success. We address that concept relative to s.611(2)(b) but note that, 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.
[16] The phrase “unreasonable act or omission” was a component of provisions of s 170CJ(3) of the Workplace Relations Act 1996 (the WR Act). For the sake of completeness we recite ss.170CJ(1), (2) and (3) as it applied in March 2006.
“Section 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.”
[17] The concept of an unreasonable act or omission in s.170CJ(3) was considered in Goffet v Recruitment National Pty Ltd 4 relative to a failure to attend conciliation proceedings. In that matter the Full Bench stated:
“[35] In the absence of medical evidence of Ms Goncalves and an opportunity for the Appellant to be heard on the point no weight should attach to the affidavit of Ms Goncalves claim that she was ill on the day of the conciliation on 5 November 2008. The notice of listing for the 5 November 2008 conciliation was sent to the Respondent by fax on 20 October 2008. The matter was listed for 11.30am. The Respondent only notified the Commission that it would not be attending the conciliation when the Commissioner’s associate telephoned the Respondent to inquire of its whereabouts at the time of the conciliation. Assuming Ms Goncalves was ill, as it is submitted that she was, no explanation appears to be given for the failure of the Respondent to inform the Appellant or the Commission of the fact prior to the scheduled commencement time of the conciliation or at all at the initiative of the Respondent. That represents conduct in our view, which caused the Appellant and her representative an unnecessary attendance at the Commission for which we think she should have her costs. The failure to initiate contact with the Commission and/or the Appellant prior to the scheduled start time for the conciliation to inform it or them of the non-attendance of the Respondent was unreasonable. If the act was intentional it would be an unreasonable act. If unintentional it would be an unreasonable omission. There is no evidence that the Respondent’s conduct in this regard was an intentional act. We are satisfied that the Respondent’s conduct in respect of the conciliation on 5 November 2009 was an unreasonable omission which caused the Appellant to incur costs.”
[18] In terms of subsequent behaviour of a party to an unfair dismissal application, the Full Bench continued:
“[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.”
[19] A Full Bench considered the former s.170CJ(2) and (3) in Brazilian Butterfly Pty Ltd and Charalambous. 5 It addressed the pre-existing authorities relevant to these provisions before stating:
“[39] Very strong prospects of success will not always justify a failure to participate in settlement negotiations initiated by a serious settlement offer from the other party. For example, where reinstatement is not sought and the amount offered by a respondent is equivalent to the statutory cap on compensation that can be ordered pursuant to s.170CH, it will likely be unreasonable for an applicant to fail to agree to a settlement on those terms, irrespective of how strong the applicant’s case is. Of course, even then, it is possible to conceive of circumstances where a failure to agree terms of settlement on the basis of such an offer would not be unreasonable. For example, depending upon the circumstances, it may be entirely reasonable for an applicant to insist upon a withdrawal of the dismissal and acceptance of a resignation in its stead if this were necessary to repair substantial damage done to an applicant’s professional reputation and future professional job prospects as a result of the dismissal.
[40] On the other hand, modest or even poor prospects of success on liability or remedy will not necessarily always make it unreasonable for a party to fail to agree terms of settlement that may lead to the discontinuance of the application. For example, an applicant who was a long term employee close to retirement may have very substantial contingent superannuation entitlements that will be lost unless he or she obtains reinstatement. The difference between the value of those contingent entitlements and the amount offered by the respondent as a monetary settlement may be so great as to make it reasonable for the applicant to refuse the respondent’s offer, notwithstanding that the applicants’ prospects of success are only modest or even poor. Again, each case will turn on its own facts.”
(references removed)
[20] The Full Bench continued:
- the terms of the settlement offered in relation to the relief sought;
- the relative strengths of the parties’ cases (and thus their relative prospects of success) in relation to both ‘liability’ and the relief sought;
- any assessment of the merits in the certificate issued by the Commission pursuant to s.170CF(2);
- the likely length and cost of proceeding to a hearing if the matter does not settle; and
- any adverse consequences that will accrue to a party if they accept a settlement on particular terms rather than successfully prosecute or defend the primary application, as the case may be.
[43] A reasonable person, who is a party to proceedings pursuant to s.170CE, when confronted with an offer of settlement from the other party, will determine whether, and if so, how to respond to such an offer after considering all the circumstances of the case, including:
[44] This list is not intended to be exhaustive. All of the circumstances are relevant and, as is made clear in the joint judgment in Blagojevch, there is no basis in the Act for giving primacy to any particular factor in every case.
[45] In many, if not most, cases there will be contested facts or contested interpretations of particular facts. What knowledge in this regard is to be attributed to the reasonable person considering whether, and if so, how to respond to an offer of settlement? The passage in Abbey, upon which the Commissioner relied was, clearly enough, an attempt to grapple with that problem. However, there is a tension between the way in which that passage is expressed and the apparent acceptance by the majority in Blagojevch that a party can act reasonably in responding to an offer of settlement by reference to that party’s “genuine perception or recollection of events”. The Full Court’s formulation is to be preferred although, even then, it is not to be seen as a substitute for the words of the Act. Of course, there is an issue as to what constitutes a “genuine” perception. The Full Bench in Kangan Batman TAFE observed, we think correctly, that:
“A party cannot simply disregard matters that should have been reasonably apparent and then claim that such matters were not apparent to them.”“
(references removed)
[21] Some additional guidance about the concept of an unreasonable act may be found in the Full Bench decision in Stagno v Frews Wholesale Meats 6 in the following terms:
““This last extract introduces a point of distinction between s.170CJ(1) and s.170CJ(2). The former refers to `without reasonable cause’, the latter to `acted unreasonably’. This anomaly, as it was described, is noted by a full bench in K.M. Lloyd v. International Health and Beauty Aids Pty Ltd t/as Elly Lukas Beauty College [Print Q5446] and, by inference, the bench is of the view that the tests are different in s.170CJ(1) and (2). That there is a different formula is clear but we are of the view that the formulations are based on the stage of proceedings at which they occur. Section 170CJ(1) relates to the initiation of proceedings. Section 170CJ(2) relates to the failure to discontinue or the discontinuance of the matter. In each case what attracts the discretion to award costs is unreasonable action or the absence of sufficient reason for the action taken. What is considered to be without reason is determined by reference to the stage that the proceeding has reached. We note that this leaves open the possibility that proceedings may commence which are with reasonable cause but may, in particular circumstances at a later stage, be further prosecuted unreasonably.
We are of the view that a party to a proceeding commenced under s.170CE of the Act in which the Commission has begun arbitrating has acted unreasonably in failing to discontinue the matter if when, at the relevant time, upon the facts apparent to the applicant there was not substantial prospect of success.”“
[22] Section 611 states:
“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).”
[23] The concept of vexatious in this context was considered in Holland v Nude Pty Ltd T/A Nude Delicafe. 7 We agree with the approach summarised in that matter:
“[7] We turn to the first issue raised by the appellants’ grounds of appeal. The approach generally taken by members of the Tribunal as to the meaning to be ascribed to the word “vexatiously” in s.611(2)(a) is to adopt the comments of Justice North in Nilsen v Loyal Orange Trust 1 (Nilsen). The Commissioner referenced this case in her reasons for decision. Nilsen was decided in 1997 when the then Workplace Relations Act 1996 applied however the relevant provision considered by His Honour was in terms similar to s.611(2)(a) being whether an applicant “instituted the proceeding vexatiously or without reasonable cause”. About this provision His Honour said:
“The next question is whether the proceeding was instituted vexatiously. This looks to the motive of the applicant in instituting the proceeding. It is an alternative ground to the ground based on a lack of reasonable cause. It therefore may apply where there is a reasonable basis for instituting the proceeding. This context requires the concept to be narrowly construed. A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage : see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491. The approach of the High Court in an application for a permanent stay of criminal proceedings on the ground of abuse of process constituted by improper purpose is instructive. In Williams v Spautz [1992] HCA 34, (1992) 174 CLR 509, at 522, Mason CJ, Dawson, Toohey and McHugh JJ said:
“Bridge LJ identified one difficulty when he said ([1977] 1 WLR, at p 503; [1977] 2 All ER, at p 586):
‘What if a litigant with a genuine cause of action, which he would wish to pursue in any event, can be shown also to have an ulterior purpose in view as a desired byproduct of the litigation? Can he on that ground be debarred from proceeding? I very much doubt it.’ (Emphasis added.)
So would we. But his Lordship, by implication, evidently sees no difficulty with the case in which the plaintiff does not wish to pursue his or her cause of action to a conclusion because he or she intends to use the proceedings for a collateral and improper purpose.”“
[24] In Read v Gordon Square Child Care Centre Inc T/A Gordon Square Early Learning Centre 8 a Full Bench of the FWC considered the phrase “without reasonable cause” as it appears in s.611. That Full Bench stated:
“[5] The phrase “without reasonable cause” was considered by Wilcox J in Kanan v Australian Postal and Telecommunications Union. 5 Section 347(1) of the then Industrial Relations Act 1988 (Cth) provided that:
“A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.” [Underlining added]
[6] In Kanan, Wilcox J said in respect of the phrase:
“A proceeding is not to be classed as being launched ‘without reasonable cause’ simply because it fails. As Gibbs J said in R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia (1978) 140 CLR 470 at 473, speaking of the Conciliation and Arbitration Act equivalent of s 357 (s 197A):
‘... a party cannot be said to have commenced a proceeding “without reasonable cause”, within the meaning of that section, simply because his argument proves unsuccessful. In the present case the argument presented on behalf of the prosecutor was not unworthy of consideration and it found some support in the two decisions of this court to which I have referred. The fact that those decisions have been distinguished, and that the argument has failed, is no justification for ordering costs in the face of the prohibition contained in s.197A.’
In Standish v University of Tasmania (1989) 28 IR 129 at 139 Lockhart J applied the qualification in ordering costs against an applicant whose case he thought ‘misconceived’, rather than simply unsuccessful. But, as the Full Court pointed out in Thompson v Hodder (1989) 29 IR 339 at 342, ‘there may be cases which could not be described properly as “misconceived” but which would nevertheless be held to have been instituted without reasonable cause’.
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 it appears that, 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.”
The initial costs application
[25] We have summarised the position of the parties with respect to the grounds upon which Mr Veal’s costs application is now founded.
[26] With respect to s.401, Mr Veal asserts that it should have been reasonably apparent to HR Legal, Mr Krins and Mr Maher as the employer representatives, that Sundance Marine had no reasonable prospect of success as they provided advice to Sundance Marine throughout the termination of employment process and the hearing, that Mr Beck’s evidence confirmed that the termination of employment decision was made before 10 September 2012, and that no evidence of alleged poor performance was led.
[27] Mr Veal further asserts that HR Legal, Mr Krins’ and Mr Maher’s role in rejecting the reasonable settlement offers was an unreasonable act given the amount finally awarded. In these respects, Mr Veal’s position is that Sundance Marine took advice from its lawyers, Mr Krins and/or Mr Maher before, during and after the termination of his employment. Mr Veal asserts that the evidence of Mr Beck of Sundance Marine was that the termination of employment decision was made before discussions with him on 10 September 2012. Further, that Sundance Marine led no evidence to support its allegations of poor performance on the part of Mr Veal. Mr Veal’s position is that a settlement offer of $15,392 was formally put to Sundance Marine after the FWC conciliation conference, that Sundance Marine responded by confirming its existing $12,000 position and that the Commissioner’s decision resulted in an order of compensation of $21,237.
[28] The HR Legal, Mr Krins and Mr Maher position with respect to s.401 is that there was no evidence to support the submission that they encouraged Sundance Marine to pursue the matter and to not settle the matter in an unreasonable manner or that their advice represented a failure to advise Sundance Marine that its defence to the application had no reasonable prospect of success. 9 Further, that in any event there was a reasonable prospect of success in terms of the respondent’s position.
[29] Furthermore, HR Legal, Mr Krins and Mr Maher denied that there was no reasonable prospect of success relative to the quantum of the compensation. In this respect they noted that Mr Veal appealed the initial decision.
[30] Finally, HR Legal, Mr Krins and Mr Maher asserted that the respondent, as the defendant, is entitled to defend its position without punitive costs and is, in this respect distinguishable from the position of the applicant.
[31] Mr Veal asserts that Sundance Marine, on the advice of Mr Krins and/or Mr Maher acted vexatiously or without reasonable cause such that costs should be awarded against it pursuant to s.611. In this respect Mr Veal refers to advice provided by Mr Krins and Mr Maher, the evidence of Mr Beck to the effect that the termination of employment decision was made before 10 September 2012, and that there was no evidence led of alleged poor performance. Mr Veal asserts that Mr Krins and/or Mr Maher should have advised Sundance Marine that its actions were inconsistent with s.387 and should have promoted settlement of the matter before the application was filed.
[32] On the same basis, Mr Veal asserts that it should have been reasonably apparent to Sundance Marine, that its continued opposition to the application in the manner pursued had no reasonable prospect of success.
[33] In response to Mr Veal’s application in so far as it is made under s.611, Sundance Marine reiterated that, on the issue of liability at all, there was a reasonable prospect of success. Further, that there was a reasonable prospect of success relative to the quantum of any compensation and that its actions as the defendant were reasonable.
Findings
[34] We have briefly summarised the findings of the Commissioner in her decision of 10 May 2013. We note that, in our earlier appeal decision 10 we identified no error in the approach adopted by the Commissioner.
[35] The Commissioner referred to a number of factual issues associated with Mr Veal’s employment arrangements. She addressed allegations of poor performance and concluded that there was no evidence of minimum performance levels, 11 that the evidence of Mr Beck of Sundance Marine was that Mr Veal’s performance was not satisfactory but there was no evidence of advice to him to this effect, or to the articulation, to Mr Veal, of performance expectations.12 With respect to sales, the Commissioner concluded that Mr Veal was meeting the minimum requirements.
[36] The Commissioner considered the evidence of Sundance Marine managers, Mr J and Mr D Beck about their concerns over Mr Veal’s approach to increasing sales, including the matters they raised with him. 13 She addressed the Sundance Marine failure to provide evidence with respect to specific allegations.14 She summarised the Sundance Marine evidence relative to concerns about Mr Veal’s alleged argumentative behaviour.15
[37] The Commissioner’s conclusion about whether there was a valid reason for the termination of Mr Veal’s employment was predicated by reference to established authorities in this respect. The Commissioner reviewed the material before her and concluded:
“Overall I do not consider that the matters which formed the reason for the dismissal of the Applicant, viewed objectively, either individually or collectively, provide a sound or defensible basis for the dismissal of the Applicant. I therefore find that there was no valid reason for the termination of his employment.” 16
[38] The Commissioner then considered, and reached conclusions about each of the remaining factors set out in s.387. She referred to Byrne and Another v Australian Airlines 17 before detailing her conclusion:
“[95] In this case I have decided that the dismissal of the Applicant was unjust as there was no valid reason for the dismissal and unreasonable because of the lack of evidence, particularly of poor performance, to ground the decision.
[96] There is no evidence of poor performance, low sales, a failure to make a YouTube video, or undertake some specified training.
[97] Whilst I have found that the Applicant was not without fault in the breakdown in the relationship (which is related to his argumentative behaviour and refusal to grow sales as the Respondent required) the relationship had not deteriorated to such an extent that dismissal was justified. In any event there is scant evidence of the Respondent raising these issues with the Applicant.
[98] I have considered the manner in which the dismissal came about, the failure to afford the Applicant an opportunity to respond, and the behaviour of the Applicant. Overall I am satisfied that the dismissal was unjust and unreasonable.”
[39] In terms of remedy, the Commissioner concluded that reinstatement was not appropriate. She considered the factors in s.392 in the context of the evidence before her before specifying compensation of $21,237.68. We note that, notwithstanding the correspondence which was exchanged late in 2012 and early in 2013 regarding Mr Veal’s alleged use of client information he obtained as a Sundance Marine employee and the consideration of this issue in the settlement options considered by the parties, this matter did not arise in the proceedings below. It is significant to note that the Commissioner’s decision with respect to remedy involved the exercise of discretion: she could have arrived at a number of different outcomes, having considered the factors in s 392. These conclusions may have substantially affected the amount of compensation payable.
[40] Notwithstanding that the preconditions for the making of a s.401 application for costs were met in these circumstances, we are not satisfied, in terms of s.401(1) (a) that the evidence before us establishes that either HR Legal, Mr Krins or Mr Maher encouraged Sundance Marine to respond to the matter when it should have been reasonably apparent that Sundance Marine had no reasonable prospect of success or, alternatively, that HR Legal, Mr Krins or Mr Maher’s actions represented an unreasonable act or omission.
[41] Sundance Marine presented an arguable case to the Commission. It was not a hopeless case such that, on its own facts, it was doomed to fail. Further, the settlement offers presented on behalf of Mr Veal identified monetary compensation and recognition of non-monetary issues. The $12,000 offer put by Sundance was not an unreasonable offer in the context of this matter. Satisfactory evidence which establishes the Sundance Marine position represented an unreasonable act or omission has not been made out to us. We note that we may have arrived at a different conclusion had Sundance Marine not put any form of settlement offer.
[42] Further, on the evidence before us, we are not satisfied that HR Legal, Mr Krins or Mr Maher undertook an unreasonable act or omission in connection with the conduct of the matter for the purposes of s 401(1) (b).
[43] We note the assertion that HR Legal did not properly participate in a separate legal ethics enquiry relative to this matter but we are not satisfied, on the evidence before us, that conduct of the character necessary for a finding pursuant to s.401 has been established. In this respect we note that both parties in the matter were legally represented and observe that the conduct of the matter may have been substantially expedited had each of those representatives adopted different approaches. This, however, falls short of the degree of satisfaction required about an unreasonable act or omission.
[44] On this basis we are not satisfied that the Sundance Marine behaviour, in responding to Mr Veal’s application involved an unreasonable act or omission.
[45] In terms of s.611, we do not consider that the Sundance Marine position was such that on its own version of events, it had no case such that it should have settled the matter on the terms proposed or should have conceded the application. Accordingly, we are not satisfied that Sundance Marine responded to the application vexatiously, without reasonable cause, or that its response was such that it should have been reasonably apparent to Sundance Marine that it had no reasonable prospect of achieving an outcome which would closely approximate that which it had offered in settlement of the matter.
Conclusion - The Initial Costs Application
[46] For the reasons we have outlined, the initial costs application lodged by Mr Veal is refused.
Conclusion
[72] We have refused the initial costs application, made by Mr Veal.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR544544>
1 [2013] FWC 2653
2 [2013] FWCFB 5205
3 We note that references to FWA were changed to FWC in the Fair Work Amendment Act 2012
4 [2009] AIRCFB 626
5 PR968915, 25 August 2006
6 1998 84 IR 270
7 [2012] FWAFB 6508
8 [2013] FWCFB 4056
9 Mr Veal’s application, para 4(f)
10 [2013] FWCFB 5205
11 [2013] FWC 2653, paras [43] and [44]
12 [2013] FWC 2653 paras [45] - [47]
13 [2013] FWC 2653 paras [50] - [53]
14 [2013] FWC 2653 paras [54] and [55]
15 [2013] FWC 2653 paras [56] - [58]
16 [2013] FWC 2653 para [73]
17 1995 185 CLR 410
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