Virag v Eastern Victoria GP Training Ltd

Case [2023] FedCFamC2G 788

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Virag v Eastern Victoria GP Training Ltd [2023] FedCFamC2G 788  

File number: MLG 529 of 2019
Judgment of: HER HONOUR JUDGE C.E. KIRTON KC
Date of judgment: 31 August 2023
Catchwords: INDUSTRIAL LAW – Costs – where 6 offers made to Applicant to resolve matter – where offers rejected – final hearing held over 3 days and adjourned part heard – Applicant subsequently sought 12 month adjournment of part heard hearing - Applicant discontinued application – Respondent applied for indemnity costs – application vexatiously instituted or instituted without reasonable cause – Applicant’s unreasonable acts and omissions caused the Respondent to incur costs - indemnity costs ordered
Legislation:

 Fair Work Act 2009 (Cth) s 570

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.04 and 22.10

Cases cited:

 Australian Workers Union v Leighton Contractors Pty Ltd (No 2) [2013] FCAFC 23

Baker v Patrick Projects Pty Ltd (No 2) [2014] FCAFC 166

Bahonko v Sterjov [2008] FCAFC 30

Council of Kangan Batman Institute of Technical and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199

Kanan v Australian Postal and Telecommunications Union [1992] FCA 539

King v Patrick Projects Pty Ltd (No 2) [2017] FCA 388

Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 2) [2017] FCAFC 116

Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20

Rambaldi (Trustee) v Meletsis (No 3) [2022] FCA 807

Ryan v Primesafe [2015] FCA 8

Division: Division 2 General Federal Law
Number of paragraphs: 79
Date of last submission: 18 October 2022
Date of hearing: 24, 25, 26 May 2021 and 25 October 2021
Place: Melbourne
The Applicant: Appeared in person
Counsel for the Respondent: Ms S Bingham
Solicitor for the Respondent: Hall & Wilcox

ORDERS

MLG 529 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

JUDITH VIRAG

Applicant
AND:

EASTERN VICTORIA GP TRAINING LTD (ACN 606 903 306)

Respondent

ORDER MADE BY:

HER HONOUR JUDGE C.E. KIRTON KC

DATE OF ORDER:

31 AUGUST 2023

THE COURT ORDERS THAT:

1.Pursuant to s 570(2)(a) and (b) of the Fair Work Act 2009 (Cth), Judith Virag (Applicant) is liable for the payment to Eastern Victoria GP Training Ltd (ACN 606 903 306) (Respondent) on an indemnity basis for:

(a)The Respondent’s costs of and incidental to the proceeding MLG 529 of 2019, as and from 27 February 2019 to 28 February 2022; and

(b)The Respondent’s costs of and incidental to the Application in a Proceeding filed by the Respondent on 30 March 2022.

2.The Applicant pay the Respondent’s costs in Order 1 to be agreed, or failing agreement, to be taxed pursuant to the provisions of r 22.10 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth).

3.Subject to Orders 1 and 2, the Application in a Proceeding filed by the Respondent on 30 March 2022 is dismissed. 

Note: The form of…

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AGLC
Virag v Eastern Victoria GP Training Ltd [2023] FedCFamC2G 788
Case
[2023] FedCFamC2G 788
Decision Date

CaseChat Overview and Summary

Virag v Eastern Victoria GP Training Ltd was a proceeding before the Fair Work Commission, which was subsequently transferred to the Federal Circuit and Family Court of Australia. The Applicant, Ms Virag, was employed by the Respondent, Eastern Victoria GP Training Ltd, as a Medical Educator – External Clinical Teacher and Training Advisor from January 2016 to December 2018. During her employment, Ms Virag raised several grievances regarding her treatment and working conditions, which led to her filing an Application for an order to stop bullying with the Fair Work Commission. This application was later abandoned. Subsequently, Ms Virag filed a claim in the Fair Work Commission, which was transferred to the Federal Circuit and Family Court of Australia. The case revolved around the Applicant's employment contract, her grievances, and the Respondent's handling of her concerns.

The legal issues in this case centred on whether the Applicant instituted the proceedings vexatiously or without reasonable cause, and whether her unreasonable acts and omissions caused the Respondent to incur costs. The Respondent argued that the Applicant's actions were vexatious and without reasonable cause, as she continued to pursue her claim despite being advised that reinstatement was unlikely. Furthermore, the Respondent contended that the Applicant's unreasonable acts and omissions, such as sending emails to all staff members, led to the incurring of significant legal costs.

The court found that the Applicant indeed instituted the proceedings vexatiously and without reasonable cause, as she persisted with her claim despite being informed that reinstatement was highly unlikely. The court also held that the Applicant's unreasonable acts and omissions, such as sending emails to all staff members, caused the Respondent to incur costs. Consequently, the court ordered the Applicant to pay the Respondent's indemnity costs from the commencement of the proceeding on 27 February 2019 until the date of the filing of the Notice of Discontinuance on 28 February 2022, as well as the Respondent's indemnity costs of and incidental to the Cost Application.

In summary, the Federal Circuit and Family Court of Australia found that Ms Virag instituted the proceedings vexatiously and without reasonable cause, and that her unreasonable acts and omissions led to the Respondent incurring costs. As a result, Ms Virag was ordered to pay the Respondent's indemnity costs from the commencement of the proceeding until the date of the filing of the Notice of Discontinuance, as well as the Respondent's indemnity costs of and incidental to the Cost Application.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

I have determined that:(a)The Applicant instituted proceedings vexatiously and without reasonable cause; and (b)The Applicant’s unreasonable acts and omissions caused the Respondent to incur costs; and (c)The Applicant should pay the Respondent’s indemnity costs from:(i)The commencement of the proceeding on 27 February 2019 until the date of the filing of the Notice of Discontinuance on 28 February 2022; and(ii)The Respondent’s costs of and incidental to the Application in a Proceeding filed by the Respondent on 30 March 2022.BACKGROUND The Substantive Application related to the Applicant’s employment with the Respondent in the position of a ‘Medical Educator – External Clinical Teacher and Training Advisor’.[1] The Applicant was employed by the Respondent part-time for the period from January 2016 to December 2018 (Employment Period).[2] [1] Court Book (CB) 250. [2] CB 250. During the Employment Period, the Applicant’s contract was amended a number of times, these being: 1 January 2017,[3] 1 January 2018,[4] 5 February 2018,[5] 6 August 2018,[6] and 13 August 2018.[7] [3] CB 261-266.[4] CB 267. [5] CB 268. [6] CB 269-273.[7] CB 274. During the Employment Period, the Applicant claimed that a number of incidents occurred which led to her initially raising a concern on 16 and 17 July 2018 through her Annual Performance Review.[8] The Applicant on 12 and 13 August 2018 subsequently requested that the Chief Executive Officer of the Respondent at the time, Mr Glasson, commence an investigation addressing her concerns.[9][8] CB 284. [9] CB 300-307. Upon the completion of an investigation, Mr Glasson provided the Applicant and other relevant individuals with a “CEO Outcomes Paper” on 24 August 2018. The “CEO Outcomes Paper”, was informed by members of the Applicant’s team and made some recommendations in general terms.[10] The Applicant was unsatisfied with this outcome and ultimately escalated her grievances to the Board of the Respondent on 15 October 2018.[11] [10] CB 317-320. [11] CB 328-329, 335-341. On 2 November 2018, the Applicant filed a ‘Form F72 – Application for an order to stop bullying’ with the Fair Work Commission in relation to a colleague.[12] This application was later abandoned by the Applicant upon advice by the Fair Work Commission that a hearing of the application could not be arranged before the expiration of her contract with the Respondent.[13][12] CB 369-380. [13] CB 5-13, Applicant’s Statement of Claim, filed 4 October 2019, [34]. On 9 and 15 November 2018, the Applicant sent ‘all staff’ emails to all employees of the Respondent, referring to her grievances within her team and dismay at Mr Glasson’s handling of her concerns.[14] Although the first of these emails was claimed by the Applicant to have been sent to all staff inadvertently, the Applicant did not confirm this with Mr Glasson at the time when given an opportunity to do so.[15] [14] CB 382 and 414. [15] CB 381, 386 and 410. On 23 November 2018, the Applicant was advised that her employment with the Respondent would cease at the end of her contract, on 31 December 2018.[16]PROCEEDINGS BEFORE THE COURT [16] CB 422. Prior to discontinuance of the Substantive Proceeding

Evidence

Evidence Before The Court

The Respondent and Applicant each provided affidavit evidence and submissions with respect to the Costs Application. Respondent’s Evidence Together with, and in support of, the Costs Application, the Respondent filed the 30 March 2022 McAleese Affidavit. Mr McAleese was the solicitor with the care and conduct of the proceeding for the Respondent between approximately May 2019 and 28 February 2022.[23] [23] Affidavit of Declan McAleese sworn 25 March 2022 filed 30 March 2022 (30 March 2022 McAleese Affidavit), [1] and [2]. The 30 March 2022 McAleese Affidavit provides information (amongst other matters) about the Applicant’s conduct during the proceedings which resulted in the Respondent incurring ‘significant legal costs’.[24] Specifically, the 30 March 2022 McAleese Affidavit sets out the offers to resolve the matter made by the Respondent to the Applicant on six (6) occasions and annexes the communication of these offers to the Applicant and the Applicant’s responses. The Court summarises the correspondence as follows (Emphasis added): [24] 30 March 2022 McAleese Affidavit, [29]-[31]. As is referred to in the table above, the 30 March 2022 McAleese Affidavit also deposed that on 9 February 2022, Counsel for the Applicant verbally restated to Counsel for the Respondent the Applicant’s offer of 9 June 2021. The 30 March 2022 McAleese Affidavit finally deposed at [31], as evidence of the Applicant causing the Respondent to incur costs by way of her unreasonable acts and/or omissions, the following: 31. In reviewing the various iterations of [the Applicant’s] filed statements of claim, including the case outline in which [the Applicant] amended the remedy she was seeking in the Substantive Proceedings, in seeking further instructions, preparing a new defence, and reviewing the proposed second further amended statement of claim of 31 January 2022, [the Respondent] incurred significant legal costs.[25][25] 30 March 2022 McAleese Affidavit, [31]. Respondent’s Submissions The Respondent seeks costs against the Applicant on an indemnity basis, or alternatively on a party and party basis. In the Respondent’s Submissions, the Respondent sought to rely on ss 570(2)(a) and 570(2)(b) of the FW Act, namely, that the Applicant instituted the proceedings vexatiously or without reasonable cause, or further and alternatively that the Applicant engaged in unreasonable acts or omissions causing the Respondent to incur costs.[26][26] Respondent’s Submissions on Costs, filed 4 October 2022 (Respondent’s Submissions), [10]. The Respondent’s Submissions outline the orders sought as follows: 62. It is submitted that in the circumstances, the Respondent seeks an order that the Applicant pay its costs on an indemnity basis or alternatively a party/party basis from: (a) 27 February 2019 on the basis that the proceeding was issued vexatiously and without reasonable cause; or (b) each date on which the Applicant rejected the Respondent’s offer of settlement, with such rejection in the circumstances constituting an act or omission by the Applicant that caused the Respondent to incur costs, being:(i)16 August 2019, or in the alternative;(ii)19 September 2019, or in the alternative;(iii)24 January 2020, or in the alternative; (iv)1 December 2020, or in the alternative; (v)9 June 2021, or in the alternative; (vi)28 February 2022.[27] [27] Respondent’s Submissions, [62].

Decision

Reasons for decision

I am satisfied that the Applicant should be ordered to pay costs to the Respondent on an indemnity basis by reason of the matters discussed above. CONCLUSION I determine that: the Applicant instituted proceedings vexatiously and without reasonable cause; that the Applicant’s unreasonable acts and omissions caused the Respondent to incur costs; that the Applicant should pay the Respondent’s indemnity costs from the commencement of the proceeding on 27 February 2019 until the date of the filing of the Notice of Discontinuance on 28 February 2022; and that the Applicant should pay the Respondent’s indemnity costs of and incidental to the Cost Application. Orders will be made accordingly.

Ratio Decidendi

Legal Principle Established

In respect of costs orders made in the Fair Work jurisdiction, it has been established that their purpose is not to punish litigants for undertaking an unreasonable course of action but rather, particularly for costs ordered on an indemnity basis, should follow where costs have been incurred in responding to ‘unreasonably instituted proceedings’: King v Patrick Projects Pty Ltd (No 2) [2017] FCA 388 at [10], citing Kanan v Australian Postal and Telecommunications Union [1992] FCA 539 at 265. CONSIDERATION Did the Applicant institute proceedings vexatiously or without reasonable cause? At the time the Application was filed Court, the Applicant was represented by Kennedys (Australasia) Pty Ltd (Kennedys), a law firm she had been referred to by her insurer. Prior to commencing the proceedings, the Applicant received a letter from Kennedys, dated 25 February 2019 (Kennedys Letter), advising her (amongst other matters) that the remedy she sought, reinstatement, was unlikely to be ordered by the Court and as such she was not seeking any ‘substantial remedy’.[81] I do not agree with the Applicant’s Submissions at [9] that this letter was “a typical letter from a legal representative to their client setting out various litigation risks and other matters ahead of legal proceedings”.[82] The Kennedys Letter contained tailored advice to the Applicant following a conference with a partner of Kennedys and the Applicant on 21 February 2019. The Kennedys Letter contains some serious and sound advice to the Applicant and needs to be read in full. This should have been the first ‘red flag’ to the Applicant that pursuit of her claim was likely to be unsuccessful and it should have caused the Applicant to pause and reflect upon the path that she was intending to embark upon.[83][81] Applicant’s Affidavit, [13] and Annexure “JV-3”. [82] Applicant’s Submissions, [9].[83] Applicant’s Affidavit, [14]. A further email was received by the Applicant from an Associate at Kennedys on 27 February 2019 informing the Applicant that Counsel had advised that reinstatement was not a remedy available to the Applicant.[84] This should have been a second ‘red flag’ to the Applicant that instituting proceedings was unlikely to be successful.[84] Applicant’s Affidavit, [15]. The Applicant nevertheless instructed Kennedys on 27 February 2019 to institute the proceedings in this Court.[85][85] Applicant’s Affidavit, [14]. I pause to note that on 24 May 2021, at the commencement of the first day of the First Part Hearing, the Applicant persisted with her application to be re-instated with her employment with the Respondent and expressed the view that this had been her desire ever since her application to the Fair Work Commission. The Applicant has repeatedly deposed that she was not motivated by financial compensation in instituting the proceedings, but instead sought redress from the Respondent for the wrongs committed against her during her employment. The fact that there was no identifiable remedy or outcome sought from the proceedings by the Applicant, save for reinstatement which was, as above, advised as highly unlikely, effectively demonstrate that the Applicant had no proper reason to bring the Application.