[2017] FWC 3382
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s 365 - Application to deal with contraventions involving dismissal

Ms Zeena Fadheel
v
Douglass Hanly Moir Pathology Pty Ltd
(C2017/1102)

DEPUTY PRESIDENT SAMS

SYDNEY, 27 JUNE 2017

Application to deal with contraventions involving dismissal – General Protections claim has no reasonable prospects of success – s 368 Certificate issued – multiple proceedings – anti-bullying application settled – comprehensive settlement of all known and unknown claims – subsequent General Protections claim lodged – costs sought pursuant to ss 375B and s 611 of the Fair Work Act – unreasonable act incurring costs – application frivolous, vexatious and instituted without reasonable cause – no reasonable prospects of success – abuse of process – inappropriate behaviour and unacceptable conduct of applicant – principles in respect to costs orders – indemnity costs ordered in rare and unusual circumstances – indemnity costs appropriate – further orders based on Commission’s Schedule of Costs.

BACKGROUND

[1] This decision will determine an application for indemnity costs, pursuant to ss 375B and 611(2) of the Fair Work Act 2009 (the ‘Act’), arising from an application filed by Ms Zeena Fadheel (the ‘applicant’), pursuant to s 365 of the Act (the ‘General Protections application’). The applicant’s General Protections application was filed on 28 February 2017 and purportedly arose following the applicant’s claim that she was forced to resign from her employment by Douglass Hanly Moir Pathology Pty Ltd t/a Douglass Hanly Moir (the ‘respondent’) on 15 February 2017. The applicant commenced employment with the respondent in October 2014 and was employed as a pathology technician/collector.

[2] It is unnecessary for the purposes of this decision, to set out the basis for the applicant’s General Protections application and the relief she sought in making that application. It is sufficient to observe that the applicant raised numerous allegations of bullying, harassment, discrimination and unfair treatment during her employment. She has brought numerous proceedings against the respondent, including an earlier General Protections claim, an anti-bullying application, Federal Circuit Court proceedings and a complaint to the Anti-Discrimination Board (‘ADB’). It is also apparent that the respondent had serious concerns with the applicant’s conduct, behaviour and unwillingness to cooperate in the workplace during her employment, for which she had received verbal and written warnings.

[3] This costs application arises from a most unusual, indeed remarkable, set of circumstances. Moreover, applications of this kind are very rare, given the limited jurisdictional scope of the Fair Work Commission to deal with applications filed under ss 372 and 365 of the Act. I shall return later to the Commission’s powers to determine a costs application in a matter under s 365 of the Act.

Earlier proceedings

[4] The Commission had some difficulty in contacting the applicant. She has provided numerous email addresses and incorrect phone numbers and insists on correspondence being sent to a PO Box. She also insists on attending all proceedings in person, notwithstanding notices of listing (when eventually acknowledged) have only required telephone attendance. The costs application was referred to me on 1 May 2017 following an unsuccessful conciliation in accordance with the Commission’s protocols on 5 April 2017. Relevantly, the Conciliator advised the parties that arbitration under s 369, or a General Protections court application in relation to the dispute would not have a reasonable prospect of success.

[5] The costs application was listed for telephone conference on Friday 12 May 2017 (as the Commission was that week sitting in Brisbane). Attempts at contacting the applicant were unsuccessful until the Sydney Registry advised that the applicant had ‘turned up’ at 80 William St Sydney, expecting an in person hearing. She also claimed to have not received the costs application, notwithstanding my Chambers had sent the listing and application by registered express post, with confirmation it was delivered to her PO Box at 6.27am on 5 May 2017 (7 days before the listing). It was also emailed to her various email addresses. In any event, a further copy of the application was personally handed to the applicant by Registry staff on 12 May 2017.

[6] While my usual practice is to list costs applications for directions and conference in order to explore with the parties any prospect of settling the application, this was not possible. Mr J Mattson, Solicitor, who represented Douglass Hanly Moir in other proceedings brought by the applicant, appeared with permission being granted, pursuant to s 596 of the Act. Mr Mattson sought an order of around $3,000 as the respondent’s costs in defending the s 365 application to that point. It was obvious from the applicant’s comments in the conference and later submissions that she strenuously opposed (and resented) the costs application. Mr Mattson relied on the matters set out in the costs application and did not seek to put anything further by way of written submissions. Accordingly, to ensure the applicant had sufficient opportunity to understand and respond to the application, directions were issued that:

The applicant (Ms Zeena Fadheel) is to file with the Commission, and serve on the respondent, an outline of submissions, any witness statements and any documentary evidence on which she seeks to rely on in opposition to the respondent’s (Douglass Hanly Moir Pathology Pty Ltd) application for costs on an indemnity basis, pursuant to ss 375B and s 611(2) of the Fair Work Act 2009 by no later than 4.00pm on Monday 5 June 2017.

[7] Without demur, the Commission decided to determine the application ‘on the papers’.

[8] In addition, Mr Mattson requested the Commission to issue a s 368(3)(b) Certificate of Unsuccessful Conciliation as an alternative to dismissing the s 365 application under s 587(1) or (3) of the Act. I formed the view that the appropriate and most jurisdictionally sound course, was to issue the s 368(3)(b) certificate in the following terms:

An application pursuant to s 365 of the Fair Work Act 2009 (the Act) was made by Ms Zeena Fadheel alleging she was dismissed by Douglass Hanly Moir Pathology Pty Ltd in contravention of Part 3-1 of the Act.

The Fair Work Commission conducted two conferences to deal with the dispute. The first was convened on Wednesday 5 April 2017 and the second on Friday 12 May 2017.

Pursuant to s 368 of the Act, the Fair Work Commission (the ‘Commission’) certifies that it is satisfied that all reasonable attempts to resolve the dispute have been, or are likely to be, unsuccessful.

Pursuant to s 368(b) of the Act, the Commission advises that, taking it account all the material before it, neither an arbitration under s 369 of the Act nor a general protections court application in relation to the dispute would have a reasonable prospect of success.

SUBMISSIONS

For the respondent

[9] Mr Mattson relied on the details set out in the application for costs and the respondent’s F8A response to the applicant’s General Protections application as follows.

[10] The costs application was made under ss 368(3)(b), 375B, 587 and 611 of the Act and the relief sought was:

1. An order under section 587(1) or (3) of the Act that the application is dismissed.

2. Alternatively, a certificate is issued under s 368(3)(b) of the Act.

3. In either case, an order that the Applicant pay the Respondent’s costs in this matter on an indemnity basis, or alternatively on a party-party basis, pursuant to ss 375B and 611(2) of the Act.

[11] Mr Mattson referred to the proceedings before McKenna C, in respect to an anti-bullying application lodged by the applicant on 9 November 2016. It was submitted that the proceedings before the Commissioner on 15 February 2017, resulted in a comprehensive settlement of all claims, known and unknown, made by the applicant against the respondent in respect to her employment. While the applicant had been dismissed by letter dated 14 February 2017 (while this date is disputed, a finding on that issue is not relevant for present purposes), the applicant had agreed to a substantial settlement offer (one year’s pay) and the respondent agreed to, and converted her dismissal to a resignation.

[12] Mr Mattson claimed that during the proceedings before McKenna C, the applicant had assured the Commissioner and the respondent that she had not lodged a complaint with the Australian Human Rights Commission (‘AHRC’). However, the very next day the respondent received a complaint from the AHRC which had been lodged by the applicant. As a result, the settlement payment was withheld. It was ultimately confirmed that the applicant had discontinued the AHRC complaint and the respondent processed the payment of the settlement amount on 21 February 2017. This amount was taxed according to the respondent’s obligations under tax laws. Mr Mattson said that if the applicant had an issue with the tax payable on the settlement, it is a matter between her and the Australian Tax Office (‘ATO’).

[13] Mr Mattson further noted that the settlement agreement of 15 February 2017 was signed at the Commission in the presence of McKenna C. He submitted that the applicant’s s 365 application was ‘doomed to fail’ because:

[14] Mr Mattson said that the applicant received a settlement amount of one year’s salary in consideration of her providing a full release and settlement of any, and all claims against the respondent in connection with her employment. She was required to discontinue all proceedings and all other claims, known or unknown, against the respondent lodged in any court, tribunal or with any other authority or body. Accordingly, she could not bring this s 365 application.

[15] Mr Mattson referred to another proceeding before the New Zealand Human Rights Review Tribunal (‘NZHRRT’), in which the applicant had signed a full and final settlement agreement with her former employer, Waitemata District Health Board; see: Fadheel v Waitemata District Health Board [2010] NZHRRT 6. She had then filed a further application against the Board and failed to disclose that she had done so; a not dissimilar set of circumstances to that which exist here. Mr Mattson submitted the applicant was fully aware that by signing a full and final settlement agreement, she was precluded from lodging, or continuing any complaint or application against the respondent; yet she did exactly that by lodging this s 365 application on 28 February 2017.

[16] Mr Mattson put that given these circumstances, the applicant made this application with ‘wilful disregard to the known facts’. It was therefore:

[17] Indemnity costs were sought because this application displays ‘special features’; see: Preston v Commonwealth Bank (Unreported, SC(NSW), Commercial Division, Giles J, No 50664 of 1991, 11 February 1993). Mr Mattson added that the applicant had displayed a wilful disregard for the settlement agreement and the significant payment she had received. This application was no more than a deplorable attempt to extract more money from the respondent. As it was both vexatious and had no reasonable prospects of success, indemnity costs would be appropriate.

Applicant’s submissions

[18] The applicant filed two documents, dated 16 March 2017 and 19 May 2017, respectively which may safely be assumed to be her response to the costs application, as they were both filed after the applicant was provided with the respondent’s indemnity costs application on 15 March 2017. I do not accept the applicant’s claim that she had not received the costs application until the telephone listing on 12 May 2017. She claimed she had not cleared her post office box and had not checked her emails or it was not sent to the correct email address. In my view, her reluctance to accept service was a deliberate intent to avoid service. In any event, there is no doubt that the applicant was provided with a copy of the application on 12 May 2017, by a Registry Officer in the Sydney Registry and she was directed to respond to the application by COB, Monday 5 June 2017.

[19] As mentioned earlier, the applicant filed a one page document on 19 May 2017, which the Commission accepts is her response to the costs application. Regrettably, the applicant did not directly address the basis for the respondent’s costs application. The applicant complained that she had been ‘tricked’ into signing the settlement agreement because the respondent deducted tax from the agreed settlement sum, which did not correspond to the tax she paid over a full year. She claimed to have received advice (including from the ATO) that the tax deducted by the respondent was wrong. She said this was a further example of the respondent bullying her ‘to humiliate (her) before (she) leave(s) peacefully and with integrity because the managers are sick and not educated and they cannot accept educated respectful and honest staff’. Notwithstanding the deed of settlement, the applicant claimed the respondent was aware of another application she had filed. She also made ill-informed and offensive comments about Commissioner McKenna which I do not repeat.

[20] The applicant submitted that she should not be obliged to ‘beg’ the ATO and wait 6 months to recredit any overpaid tax. She claimed to have received advice from lawyers and tax agents that it was not ethical and everyone involved in this issue were liars.
She said the respondent had:

She claimed that this meant the terms of settlement were ‘not confidential’.

[21] The applicant referred to a media report concerning a lawyer from Mr Mattson’s firm who was alleged to have stolen a client’s money. She accused Mr Mattson of acting in a similar way. The applicant believed this case is all about the respondent’s managers being jealous of her qualifications and personality and using cheaper school leavers who do not perform the work correctly. The applicant repeated her claims for remedies for psychological injury, unfair dismissal and the $10,500 tax deducted from the settlement payment.

CONSIDERATION

Relevant statutory provisions

[22] This costs application is brought pursuant to the Commission’s general powers to award costs under s 611 of the Act and the discrete provisions in respect to General Protections applications under s 375B. These sections are set out below:

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.

375B - Costs orders against parties

(1)  The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:

(a)  an application for the FWC to deal with the dispute has been made under section 365; and

(b)  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 dispute.

(2)  The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.

(3)  This section does not limit the FWC's power to order costs under section 611.

[23] It will be readily apparent that the ‘triggers’ enlivening the Commission’s general costs order powers in relation to this case are whether the applicant:

[24] The Commission’s costs order powers are nuanced in s 375B of the Act by reference to a ‘dispute’ under s 365 and where costs had been incurred by a party because of an ‘unreasonable act’ in ‘connection with the conduct or continuation of the dispute’. Section 375B was introduced into the Act in 2013, when Parliament approved amendments to strengthen the costs provisions against parties and their representatives. The Explanatory Memorandum to the 2013 amending legislation explains s 375B as follows:

230. New section 375B allows the FWC to order costs against a party to a general protections dismissal dispute (the first party) if it is satisfied that the first party caused the other party to the dispute to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the dispute. New section 375B is similar to the costs orders that are available against parties in relation to unfair dismissal matters (see section 400A).

231. This power to award costs is in relation to the dispute before the FWC and does not include costs associated with a general protections court application.

232. The power to award costs under new section 375B is not intended to prevent a party from robustly pursuing or defending a general protections dispute before the FWC. Rather, the power is intended to address the small proportion of litigants who pursue or defend disputes in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

233. The FWC’s power to award costs under subsection 375B(1) 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.

234. 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.

235. New subsection 375B(2) provides that the power to award costs against one party in these circumstances is only exercisable if the other party to the dispute makes an application in accordance with section 377. New subsection 375B(3) makes it clear that the new power to award costs under subsection 375B(1) operates in addition to subsection 611(2), which enables the FWC to make costs orders against a person in certain circumstances, such as where an application is made vexatiously or without reasonable cause.

[25] When read together and given the terms of s 375B(3), ss 611 and 375B may involve ‘triggers’ at two points in time:

[26] In my view, the continuation of a s 365 dispute application where costs are incurred because of an ‘unreasonable act’ of a party, such costs include those associated with preparing responses to the application and attending the s 368 conference.

[27] Further, in my opinion, the ‘unreasonable act’ causing the costs to be incurred may be the actual filing of an application which is vexatious, made without reasonable cause or has no reasonable prospects of success. If both, or either of these circumstances are established, or ‘an unreasonable act’ has been identified under s 375B, then the Commission’s general powers to award costs, either on ‘party to party’, or indemnity basis may be enlivened.

Powers and functions of the Commission under Part 3.1 of the Act

[28] The powers and functions of the Commission under the General Protections provisions of the Act (sections 334-378) are limited to the following:

[29] As I have already said, I have exercised the Commission’s powers under s 368(3)(b), by issuing a certificate of unsuccessful attempts to resolve the dispute and advising the parties that an arbitration in relation to the dispute would not have a reasonable prospect of success.

[30] There is little doubt that the Commission has the power to make costs orders in respect to a General Protections application in relation to the application and any subsequent proceedings pertaining to the application, including costs associated with responding to the application, preparing and attending the mandatory s 368 conference and, if necessary, arbitral proceedings under s 369 of the Act.

Costs order under s 611 of the Act

[31] I now intend to deal with the principles to be applied by the Commission when considering costs applications under s 611 of the Act.

[32] In this respect, I refer to a decision of the Commission in Qantas Airways Ltd v Paul Cater [2013] FWCFB 1811, in which the Full Bench said at paras [17]-[19]:

‘[17] We refer to the approach we have taken to considering if the provisions of s.611(2)(a) or s.611(2)(b) are established. We first deal with the application made on the basis that Qantas has made its appeal vexatiously. The approach generally taken by members of the Commission 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  (Nilsen). 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.”

[18] The approach we have taken to whether Qantas instituted its appeal without reasonable cause, is to consider whether at the time of instituting the appeal there was no substantial prospect of success.

[19] We now turn to s.611(2)(b). The approach to be taken to considering whether such a finding should be made is summarised in the decision of the Full Bench in Baker v Salva Resources Pty Ltd (Baker). The relevant extract is as follows:

“The concepts within s.611(2)(b) “should have been reasonably apparent” and “had no reasonable prospect of success” have been well traversed:

[33] In Hamilton James and Bruce Pty Ltd v Michelle Gray [2011] FWAFB 9235, a Full Bench of FWA (as the Commission was then styled) said at paras [18]-[21]:

‘[18] The phrase “without reasonable cause” was considered in Kanan v Australian Postal and Telecommunications Union. 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)

[19] In Kanan’s case, Justice Wilcox said in respect of the phrase that:

“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.”

[20] The phrase “no reasonable prospect of success” in the context of costs applications was considered by a Full Bench of the Australian Industrial Relations Commission (AIRC) in Deane v Paper Australia Pty Ltd. In that decision the Full Bench said:

“[5] It was not disputed that for the purposes of s.170CJ(1)(a)(ii) the appeal instituted by the applicant was a proceeding begun by him. The question is whether he did so in circumstances where it should have been reasonably apparent to him that there was no reasonable prospect of success. If that question is answered in the affirmative the Commission is able to make an order for costs against him. Whether it should do so is a separate although closely related question which requires a separate exercise of discretion.

[6] We were taken to a number of authorities which were said to bear upon the construction of s.170CJ. None of those authorities deals with the operative expression which now appears in s.170CJ(1)(b), namely: ‘no reasonable prospect of success’.

[7] The expression ‘no reasonable prospect of success' also appears in ss.170CF(2)(d), 170CF(3)(b) and 170CF(4). Section 170CF(4) provides for the summary dismissal of an application for relief pursuant to s.170CE, by the issue of an appropriate certificate, if the Commission concludes that the application has no reasonable prospect of success. The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service. In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that a conclusion that an application had no reasonable prospect of success should only be reached with extreme caution and where the application is manifestly untenable or groundless.

[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.” (Endnote omitted)

[21] In Smith v Barwon Region Water Authority, a Full Bench of the AIRC in considering the phrase “no reasonable prospect of success” in the context of s.650 of the Workplace Relations Act 1996 (Cth) (WR Act) concerning AIRC advice to the parties about an application for relief in respect of termination of employment said:

“[48] Having regard to the authorities ... it seems to us that an application will have no reasonable prospects of success if it is so lacking in merit or substance as to be not reasonably arguable.”’

[34] For completeness, I refer to the final two paragraphs of Kanan v Australian Postal and Telecommunications Union [1992] FCA 366:

‘29. 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. That is the situation in the present case. The qualification of s.347 applies. The Court has power to order costs against the applicant.

30. I see no discretionary reason to withhold such an order. It is not a matter of the applicant's motives but, rather, that he has put the respondent to the expense of resisting a claim which was always doomed to failure. There is no question of punishing the applicant for his unreasonable course of action. The rationale for making a costs order is that a measure of indemnity should be conferred upon the respondent for the costs it has been obliged to incur in responding to the unreasonably instituted proceeding. I propose to order that the principal proceeding be dismissed with costs. The costs of the motion will be costs in the principal proceeding and so covered by that order.’

See also: Church v Eastern Health t/a Eastern Health Great Health and Wellbeing [2014] FWCFB 810.

‘Unreasonable act’

[35] The Commission must determine whether the applicant engaged in an unreasonable act or omission in connection with the conduct or continuation of her dispute which caused the respondent to incur unnecessary costs.

[36] There are few decisions of the Commission which have dealt with s 375B; one example is Cadd v Millennium Cleaning (Vic) Pty Ltd [2017] FWC 2473. There appears to be only one Full Bench authority which has considered the section. In Keep v Performance Automobiles Pty Ltd [2015] FWCFB 1956, the Full Bench said at paras [13] - [16]:

[13] It is apparent from the Supplementary Explanatory Memorandum that the legislature intended that the power to order costs provided by s.375B only be exercised where there is clear evidence of unreasonable conduct. Such an approach is entirely consistent with the jurisprudence relating to the other costs provisions in the FW Act (such as s.611)…

[15] It may be observed at the outset that there are some similarities between s.611 and s.570 of the FW Act, in particular the common use of the expression ‘vexatiously or without reasonable cause’. On that basis judgments which have construed s.570, and its legislative antecedents, have been regarded as relevant to the consideration of s.611. Of course s.570 deals with the ordering of costs in court proceedings in relation to matters arising under the FW Act. In court proceedings the usual practice is that an order for costs follows the outcome of the substantive proceedings. The Commission context is quite different. There is no general practice that costs follow the event and the FWC’s power to order costs only arises in the circumstances specified in ss.376, 400A, 401, 611 and 780 of the FW Act. Section 611(1) sets out a general rule - that a person must bear their own costs in relation to a matter before the FWC, and then provides exceptions to that general rule in the limited circumstances referred to in s.611(2).

[16] The FWC’s power to order that a person bear some or all of the costs of another person in relation to an application is only enlivened if the FWC is satisfied as to the matters set out in either s.611(2)(a) or s.611(2)(b).

[37] In my assessment, there cannot be any doubt that the applicant’s pursuit of this General Protections application faces two insurmountable hurdles which can only result in one conclusion – the application is doomed to fail.

[38] Firstly, the claim is made, self-evidently, under the General Protections involving a dismissal provisions of the Act. By agreeing to resign and the respondent accepting her resignation, as a term of the settlement deed dated 15 February 2017, there was no dismissal of the applicant, constructive or otherwise. It follows that if there was no dismissal there can be no ‘application brought under s 365 ‘involving a dismissal’. However, the Commission has no power to dismiss a General Protections case; see: Raza v Harbour Roof Tiling Pty Ltd [2017] FWCFB 2248. The best I can do is advise the parties that the application has no reasonable prospects of success, which I have done (as had the Commission’s conciliator).

[39] Secondly, it is completely beyond doubt that the applicant entered into a settlement agreement with the respondent on 15 February 2017, which has the following salient features:

[4] The parties have agreed to settle any and all matters whatsoever, known or unknown, relating to the Employment, Complaints, cessation of employment and any other matter connected to her Employment, except claims for workers compensation under workers compensation legislation.

[5]Full and Final Settlement, it is agreed:

(a) OHM will pay to Ms Fadheel, within 2 working days, $31,680.54, less deductions required by law, plus 75 hours annual leave, less deductions required.

[6] DHM will make the payment 2 working days from written confirmation that Ms Fadheel has withdrawn and discontinued:

(a) FWC proceedings C2016/6660;

(b) FWC proceedings AB2016/717;

(c) FCCA proceedings SYG 314/2017;

(d) ADB complaint C2016/0727;

(e) And any and all other complaints made, claims or proceedings lodged with other authorities, bodies, organisations courts and tribunals not yet served on DHM

[7] The payment is made in full and final settlement. In consideration of payment, the Employee, Ms Fadheel, releases and indemnifies:

(a) DHM

(b) Its related body corporates

(c) All of their officers, servants and agents, including Mr Greg Henry, Ms Veronica Ticehurst, Ms Lynne Allen, Ms Katherin Posle, Ms Jenny Wallage, Ms Jane O’Keefe and all others;

(d) From any and all claims whatsoever arising out of or in connected with:

(e) her Employment;

(f) any entitlement;

(g) the Complaints;

(e) the cessation of her employment.

Commission’s Code of Conduct

[40] It is necessary to remind the applicant of the Commission’s Code of Conduct and Behaviour. For parties and representatives, the Code provides as follows:

Parties and their representatives have obligations to behave appropriately to both the Commission and each other, and in a way that helps provide a fair hearing for all.

Parties and their representatives should:

n treat the Commission and other parties/representatives with courtesy and respect

n act honestly, and not knowingly give false or misleading information

n cooperate with other parties and the Commission to enable the just, efficient, timely and cost effective resolution of the issues in dispute

n act promptly, comply with Commission directions, and minimise delay

n take reasonable steps to make sure the costs incurred in connection with proceedings are reasonable and proportionate to the complexity and importance of the issues and amount in dispute, and

n where appropriate, take reasonable steps to resolve disputes by agreement or to minimise the number of issues in dispute.

[41] For our part, Members of the Commission are responsible for ensuring that all proceedings are fair and that parties are treated with courtesy and respect.

[42] Where unrepresented parties are involved, the Commission is required to offer a certain degree of latitude and tolerance to persons who may feel uncomfortable and stressed when appearing in unfamiliar surroundings, involving stressful, and sometimes unpleasant circumstances. From time to time, the usual expectations of courtesy and respect will be severely strained in hotly contested and often contentious matters. The Commission is expected to manage these situations thoughtfully and with patience. That said, there are limits to such tolerance.

[43] Even putting aside the Commission’s Code of Conduct, ordinary community expectations of civility, decency and respect should not be waived simply because a disgruntled litigant is unrepresented. No other Court would tolerate the intemperate remarks and inappropriate conduct that the applicant exhibited in this case, including highly inappropriate and insulting emails to my Chambers after I reserved my decision in this matter.

[44] In Zepenic v Chateau Constructions (Aust) Limited [2017] NSWSC 582, Pembroke J said at para [46]:

‘In this case, and in many similar such cases, the litigant’s enthusiasm and passionate engagement in his quest for supposed justice, obscures the essential unreality of his expectations; blinds him to the chaos that his pursuit has created; and renders him oblivious to the waste and expense that he has generated or the disproportionate court time that he has consumed. Such a litigant’s level of pre-occupation, ruminating thinking, pedantic attention to the minutiae of his case and dogged persistence, serve only to hinder the efficient administration of justice. It is usually made worse by extravagant language, repeated assertions of fraud and the constant denunciation of the tactics or behaviour of the opposing party.’

[45] Often an unrepresented litigant’s incoherent or inappropriate conduct can be explained by an underlying medical condition, resulting from (or perhaps exacerbated by) the stress of having been badly treated at work, bullied or by having been dismissed. Usually, the Commission will have medical evidence to explain such behaviour and diagnosis, which may be unrelated to the employee’s employment. There was no evidence in this case to explain the applicant’s unacceptable conduct or her unreasonable act in pursuing this claim in the face of unequivocal terms of settlement she voluntarily agreed to. If the applicant had such evidence, she had ample opportunity to rely on it, but did not do so.

[46] There are rare occasions where the interests of justice demand that the Commission ‘call out’ completely unacceptable behaviour of a party to a proceeding and the improper motives of that party in filing and continuing an utterly unmeritorious application. Sometimes, (again rarely) there will be occasions where there is no point in ‘gilding the lily’ or tempering ones’ language, so as to not hurt a person’s feelings. Regrettably, this is one such case.

[47] I need go no further than the applicant’s submissions referred to above and her conduct during the phone conference before me on 12 May 2017. Her submissions were a mix of hyperbole, gratuitous insults (including to members of the Commission), unsupported irrational and irrelevant allegations against Mr Mattson, the respondent and its management and grossly overblown claims of her own intellectual and academic superiority over everyone she worked with, or supervised her.

[48] During the phone conference, the applicant would not answer simple propositions, spoke over and interrupted both me and Mr Mattson, threatened to take her case to the ‘Parliament and the media’, repeated allegations against other members of the Commission and the Commission generally and treated the respondent’s costs application with disdain and ridicule. She said the Commission should be renamed the ‘Fair Employers’ Commission (because of its bias in favour of the respondent). If such behaviour was indicative of her behaviour in the workplace, it is not a bit surprising that her continued employment was untenable.

[49] That said, it is abundantly apparent that the terms of the settlement between the parties of 15 February 2017 were carefully and painstakingly designed and crafted. The deed of settlement was to provide a complete release from all claims by the applicant against the respondent in respect to her employment. The terms were settled before a Member of the Commission and were signed by the parties that day. The applicant signed a Notice of Discontinuance. There is no evidence that the applicant was under any pressure or coerced into signing the settlement deed. Indeed, the deed expressly set out that she had entered into it ‘voluntarily’. In my opinion, the monetary payment to the employee, given her length of service and all the circumstances, might well be said to be on the generous end of the scale.

[50] Unbelievably, the ink was hardly dry on the terms of settlement when, just 13 days later, the applicant lodged this s 365 application against the respondent seeking further compensation and reinstatement for the ‘damage and hurt’ she had suffered.

[51] That the respondent was ‘gobsmacked’ by such an application would be an understatement. The terms of settlement could not have left the applicant (or anyone) with any doubt at all that she had agreed not to lodge or continue any claim, known or unknown, against the respondent. It was utterly appalling conduct for which the applicant should be ashamed of. For one who proudly proclaims her high qualifications and who professes to be far better educated than her managers, it beggars belief that she would totally ignore the agreement she accepted and for which she received a significant amount of money.

[52] As a ‘highly qualified’ person, the applicant could not have had any doubt that the words used to qualify the settlement amount of $31,680.54 being ‘less deductions required by law’, meant that the amount was a gross figure equivalent to a year’s gross income, less applicable taxation. The fact she now says the figure was either not a gross figure, or should not have been taxed at all, is a disingenuous and unsupportable proposition. Mr Mattson was correct when he posited that if the applicant had an issue with the tax treatment of the payment, that is entirely a matter between the applicant and the ATO. It has nothing to do with the respondent, who is required by law to make the appropriate tax deductions, irrespective of the applicant’s irrational complaint to the contrary.

[53] The applicant claimed that she had received advice from a person/s unnamed at the ATO and a number of unnamed lawyers who told her that there should have been no tax paid on the settlement amount. While I harbour some scepticism that such advice was ever given (or even sought), the respondent was obliged to remit the tax payable to the ATO. If the advice is correct (which I very much doubt), it will be a simple matter for the ATO to refund it to her. While I will not yield to the temptation of making a finding based on speculation, I do suspect something else is going on here, particularly given that the applicant has conducted herself in an almost identical fashion when she signed a settlement deed in proceedings she lodged in 2009, in the NZHRRT following her complaints of harassment, discrimination, defamation and abuse against her then employer, the Waitemata District Health Board. To illustrate the applicant’s mala fide intent, I intend to refer in some detail to that decision. Despite the applicant’s protests that this matter was confidential, the decision relating to it is on the public website. There is nothing improper, let alone illegal about the respondent referring to it, as I do. It reveals a remarkable similarity to the present circumstances, even down to her complaint that she wanted a farewell party when she left the workplace.

[54] In the NZHRRT decision of 17 March 2010, the Tribunal notes at paras [3]-[4]:

[3] It is common ground that these parties attended a mediation on 19 November 2009, and that asa result of that mediation the settlement was signed by both parties. Under the settlement - and in exchange for a sum of money that was not insubstantial - Ms Fadheel agreed:

[a] That the settlement was a full and final settlement of all matters between her and the WDHB arising out of their employment relationship;

[b] That she would withdraw:

[i] Her proceedings against the WDHB then before the Employment Court;

[ii] A second set of proceedings also against the WDHB in the Employment Court; and

[iii] A privacy complaint against the WDHB that was then under way.

[c] The settlement also provided: “Except for enforcing this agreement, neither party may take any further proceedings against the other arising from the employment relationship between them.”

The Tribunal concluded as follows:

[7] Having regard to the complaints made by Ms Fadheel’s claim in HRRT 46/09, however, we have no doubt that her allegations all relate to matters which arise out of the employment relationship that she once had with the WDHB. In our view her claims are all within the scope of the settlement. We therefore agree with the WDHB that continuance of the HRRT 46/09 proceedings in the face of the settlement is a breach of the settlement. (My emphasis)

[55] Regrettably, I am also satisfied the applicant deliberately and knowingly misled McKenna C on 15 February 2017 when she told her and the respondent that she had no active complaint in the AHRC. The very next day, the respondent received the complaint from the AHRC.

[56] In my opinion, it would be difficult to find a more compelling set of circumstances than here, which warrant a costs order being made against a party for unreasonable acts in connection with commencing and continuing an application. This includes her deliberate and wilful breach of the agreed terms of settlement she signed on 15 February 2017 and 13 days later filing this application knowing full well the terms of settlement represented a complete bar to her lodging or continuing any claims against the respondent.

[57] This act was designed to harass the respondent. Her motives were dishonourable and unacceptable and designed for a collateral and improper purpose. Upon receiving the respondent’s F8A (which I do not accept she was unaware of until the day of the conference on 12 May 2017), the applicant knew, or should have known, that her claim was doomed to fail. Not only did she not defend her actions, but her attitude to the costs application was to treat it, and Mr Mattson, with contempt and ridicule. To my mind, this behaviour exacerbated the unreasonableness of the applicant’s conduct. At that point, she should have graciously discontinued the application and implored the respondent not to press for costs.

[58] Further, it is my view that this application is, or perilously close to, an abuse of process. In this respect, I refer to a judgement of Cowdroy J in Seidler v UNSW [2011] FCA 640, in which His Honour was faced with a similar set of circumstances as here, although somewhat more complex and convoluted. At paras 80-84, His Honour said:

80. The applicant clearly seeks to challenge the findings of Nicholls FM made in respect of the allegations of fraud, duress and unconscionability concerning the execution of the HOA and the Deed of Release. However, the applicant has not sought to appeal the decision of Nicholls FM. Therefore, the Court considers that the applicant is attempting to re-litigate matters already determined adversely to the applicant.

81. In Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 the House of Lords considered the basis upon which pleadings could be struck out as constituting an abuse of process. Lord Bingham of Cornhill considered the doctrine of abuse of process at 22.

82. His Lordship at 22 referred to the observations of Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1981] UKHL 13; [1982] AC 529, 536 regarding the inherent power which any court of justice possesses to prevent misuse of its procedure. His Lordship at 23 then referred to the observations of Sir James Wigram V-C in Henderson v Henderson [1843] EngR 917; (1843) 3 Hare 100 at 114-115 in which the Vice Chancellor referred to the necessity for parties to bring before a court:

...their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of a matter which might have been brought forward as part of a subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence or even accident omitted part of their case.

83. At 31 Lord Bingham, having reflected upon Henderson v Henderson said:

The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all.

84.The Court is satisfied that the institution of these proceedings is an abuse of process. The abuse lies in the fact that the claims now made by the applicant all arise out of the circumstances for which she has given an express release to the respondents. The validity of the Deed of Release has already been conclusively determined by Nicholls FM. (My emphasis)

[59] Having been well satisfied that a costs order should be made against the applicant, it only leaves the question of whether costs should be ordered on an indemnity basis.

[60] The Commission is mindful of the principles to be applied to costs applications on an indemnity basis and the caution the Commission must exercise in this regard. Such costs orders are rare and unusual.

[61] In Dye v Commonwealth Securities Limited (No 2) [2012] FCA 407, Buchanan J identified one of the foundations for an order of indemnity costs may be on the basis of the findings made in the earlier judgment that the applicant’s case was, in all relevant aspects, based on a falsehood. His Honour said at para [5]:

‘Each of these foundations appears to me to provide a sufficient basis for the award of indemnity costs from the dates specified. As to the first basis upon which indemnity costs have been sought, it is well-established that indemnity costs are not awarded as a punishment against an unsuccessful litigant. However, they will be awarded in appropriate cases to protect a respondent from the financial burden of proceedings which were unjustified and should not have been commenced. Each of the proceedings commenced by the applicant falls, in my view, into this category. In the present case, the lack of merit in each of the proceedings is so marked, and the claim for protection by the respondents against unwarranted financial burden is so well-founded, that there is a sufficient justification for the award of indemnity costs with respect to the whole of each of the proceedings, subject to an issue to which I will return concerning the basis on which the Supreme Court proceedings were transferred to this Court. It is not necessary for me to repeat here the findings which were made in the earlier judgment. The proceedings were, in each case, based on falsehood and were without any legal substance. The respondents are entitled to claim that they should be relieved, so far as an order for costs would achieve this, from the financial burden of defendi ng them.’ (My emphasis)

[62] Given my earlier conclusions, I consider that this is one of those rare cases in which the respondent is entitled to its costs on an indemnity basis. I am satisfied that the applicant’s s 365 application:

a) had no prospects of success;

DIRECTIONS

[63] Given the applicant’s intemperate remarks at the conference on 12 May 2017, I do not expect that there will be any agreement as to the assessment of costs. I therefore direct the respondent to file an assessment of costs in respect to this application, in accordance with the Costs Schedule in Regulation 3.08 within seven days. Orders will then be made to finally conclude this costs application.

DEPUTY PRESIDENT

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