FWA 2575
Fair Work Act 2009
Cooperative Research Centre for Advanced Composite Structures Ltd T/A Advanced Composite Structures - Australia
MELBOURNE, 3 MAY 2011
Application for costs.
 This is a decision arising out of two costs applications made by the Co-Operative Research Centre for Advanced Composite Structures Ltd t/as Advanced Composite Structures - Australia (the Respondent) as a result of a decision issued on 25 February 2011 by Fair Work Australia (the Tribunal) in relation to the original application under s.394 of the Fair Work Act 2009 (the Act) brought by Mr Paul Andrews (the Applicant) against the Respondent.
 The Respondent seeks costs against the Applicant and also against the solicitor representing the Applicant, Mr Christopher Tucker of Lachlan Partners Legal.
 Mr Donaghey represented the Respondent at the original hearing and again at the costs application hearing. Mr Andrews represented himself and Mr J McKenna represented Mr Tucker.
 The Respondent makes applications against the Applicant under section 611(2)(a) and (b) of the Act and against Mr Tucker under section 401(a)(ii) of the Act.
 Section 611 of the Act states as follows:
(1) A person must bear the person’s own costs in relation to a matter before FWA.
(2) However, FWA may order a person (the first person) to bear some or all of the costs of another person in relation to an application to FWA if:
(a) FWA is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) FWA 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: FWA can also order costs under sections 376, 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).”
 Section 401(1) of the Act states as follows:
“401 Costs orders against lawyers and paid agents
(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:
(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.”
 The Respondent’s arguments, in terms of costs, go to the following and are stated as follows in their Submission of the Applicant on Cost:
“On the basis of the test provided for in the Fair Work Act 2009(Cth) (FW Act), the Applicant (and/or his solicitor) should be ordered to pay the costs wasted and thrown away by the Respondent. The reasons for these are:
a. the Applicant (and/or his solicitor) made the substantive application vexatiously or without reasonable cause (within the meaning of section 611 of the FW Act);
b. it should have been reasonably apparent to the Applicant (and/or to his solicitor) that the Applicant’s substantive application had no reasonable prospects of success (section 611);
c. that the lawyer:
i. encouraged the person to start or continue the matter;
ii. should have been reasonably apparent that the person had no reasonable prospect of success in the matter; and
iii. the lawyer caused costs because of unreasonable action or omission.”
 The Respondent seeks from the Applicant or from his solicitor an order for all of its costs. The Respondent seeks an indemnity costs order.
 The Respondent states that if the Tribunal is against the Respondent’s application for indemnity costs, then the Respondent seeks a reasonable amount of costs to be awarded to the Respondent such as two thirds of the total costs incurred and identified in Schedule A attached to the Submissions.
 The Respondent states:
“The entire case concept is lacking for Mr Andrews. Not only is his having jurisdiction counter-intuitive, by the shifting way in which the allegations are put in the correspondence, it appears some level of understanding of this position was known to the advisor, Mr Tucker.
To this extent, this is an “all or nothing” application. If the prosecution of his case was unreasonable at inception, then it follows that it was unreasonable at all points afterwards. Nothing in the correspondence from the advisor points to a reasonable basis for the pursuit of the application.
Whether he was encouraged or merely aided by Mr Tucker in the process of making an unmeritorious application is significant: but only as a matter of degree. The correspondence is:
a. from the first letter dated 10 August 2010, at ‘TW1’ which asserts a ‘harsh’ termination. This notion is positively irreconcilable with the terms of the contract actually entered into by Mr Andrews. Even in ‘TW1’, the notion of jurisdiction’ and the question of whether it existed for the Applicant, was a live one (see page 3, numbered para );
b. the next letter on 14 September, at ‘TW5’ which asserts that a witness, John Heathcote will give evidence that the Applicant was a permanent employee;
c. to the new allegations on 22 October 2010, at ‘TW6’ which alleges a further cause of action at common law. This allegation is a fallacy and could not be pursued at the time the letter was sent;
d. to the final letter of 10 November at ‘TW10’ to the effect that there is jurisdiction in the Applicant’s case, and that the Respondent should engage in ‘without prejudice’ discussions.”
 The Respondent further states:
“The thrust of the allegation is or are that Mr Tucker would have said anything to pursue his client’s claim. Anything, it appears, except analysing the jurisdictional basis which my instructors identified in August 2010 as lacking. That part of the case was never addressed in correspondence. It is not in evidence.”
 On the basis of the Applicant’s, or alternatively Mr Tucker’s, pursuit of a hopeless case in these circumstances, the Respondent seeks its indemnity or other costs of the proceeding, including a jurisdictional motion.
 The Applicant read a statement to the Tribunal defending his position in relation to the pursuit of his application.
 Mr McKenna, on behalf of Mr Tucker, stated that the application against Mr Tucker, brought under s611 of the Act is misguided. In Mr Tucker’s Outline of Submissions on Costs it is stated as follows:
“Subsection 611(1) provides the default position that a person must bear their own costs in relation to a matter before FWA. Subsection 611(2) provides some exceptions to the general rule. Relevantly, these include where:
(a) FWA is satisfied that the person made or responded to the application vexatiously or without reasonable cause; and
(b) FWA is satisfied that it should have been reasonably apparent to a person that their application, or their response to an application, had no reasonable prospect of success.
Both sub-ss611(2)(a) and (b) relate to the “first person”, being the person who made or responded to the application. It is submitted that an application for unfair dismissal under s.394 can only be “made” by an applicant themselves. A lawyer or paid agent may act as an applicant’s representative and may seek the tribunal’s permission to appear on their behalf; however, they do not make an application. Similarly, only a party to a proceeding can respond to that application. As such, s611 has no application to lawyers and paid agents (Trent Geissler v QR Passenger Pty Ltd  FWA 1939 at ). Rather, costs orders against practitioners in unfair dismissal proceedings are available in the limited circumstances prescribed by s401.
In order to make good an application under s401(1), it is here necessary for the respondent to establish that:
(i) Mr Tucker caused costs to be incurred by the respondent because Mr Tucker encouraged the applicant to start or continue the matters; and
(ii) it should have been reasonably apparent that the applicant had no reasonable prospect of success in the matter; or
(b) Mr Tucker caused costs to be incurred by the respondent because of an unreasonable act or omission of Mr Tucker in connection with the conduct of or continuation of the matter.
The jurisdiction of the tribunal to make an order for costs in accordance with s401(1) is limited to the circumstances where the tribunal is satisfied of these elements. As this is an application brought by the respondent, it falls to the respondent to establish the requisite elements (Howard v Cummins (1988) 27 IR 109 at 111-12). Here, there is no evidence before the tribunal that Mr Tucker “encouraged” the applicant to start or continue the matter. Moreover, Mr Tucker is also unable to disclose to the Tribunal any advice given to the applicant about the proceeding. The privilege in those communications and discussions belongs to the applicant.
It is further submitted that the respondent cannot establish that it was known, or should have been known to Mr Tucker that the application had no reasonable prospect of success.
It is also unclear exactly what are the unreasonable act(s) or omission(s) are relied upon by the applicants in support of the application under s410(1)(b).”
 The Tribunal has considered the written and verbal submissions of the parties very carefully, given that the power to award costs is a discretionary power and one that should be exercised very carefully.
 In considering the costs against the Applicant, the Tribunal would reject such application. The Tribunal is satisfied that, on the material before it, the Applicant does not meet any of the criteria in s611(2)(a) or (b) in order for the costs to be issued against him. Although the Applicant was not successful in his application, it does not follow that just because a person is unsuccessful that they had instituted proceedings either vexatiously or without reasonable cause or there was no reasonable prospect of success.
 From the Applicant’s point of view, he was convinced, based on past practice of the Respondent and also on the evidence that was to be provided by Mr Heathcote in the original application, that there was some prospect of success in that the Applicant’s contract of employment would go beyond 30 June 2010.
 It was only when Mr Heathcote, who was to give certain evidence and then changed his evidence during the proceedings, that it became clear that the Applicant’s contract was to expire on 30 June 2010.
 Understanding that the Applicant had had approximately 18 years’ service, and that service had been based on extensions of contracts, the Applicant (although incorrectly) thought that his employment would go beyond 30 June 2010, once funding by the federal government had been provided. The Applicant took some comfort to support his view from the evidence that was to be provided by Mr Heathcote.
 Quite often it is the very nature of the proceedings before the Tribunal and other forms of litigation before Courts where parties have a different view as to (a) a conversation (b) what the written words mean and (c) what was behind those written words. The mere fact that somebody instigates proceedings either in the Tribunal or another jurisdiction based on their view of the above does not mean that the claim has been instigated vexatiously or without reasonable cause.
 Therefore, as already stated above, the application for costs against the Applicant is rejected.
 In relation to the application for costs against Mr Tucker, the Tribunal understands that the application by the Applicant commenced before he sought legal advice from Mr Tucker.
 Without breaching the legal professional privilege, one would assume that Mr Tucker received advice from the Applicant based on the Applicant’s 18 years’ experience with the Respondent and the continuation of various contracts of employment. The Applicant’s expectations of what he may have expected based on past practice and the assurances that the Applicant would have received from the evidence that was to be provided by Mr Heathcote would have been also conveyed to Mr Tucker.
 The Tribunal can find nothing in the material provided that says that Mr Tucker did nothing more than represent the interests of the Applicant in a professional manner and relied upon the material provided by the Applicant. As stated in dealing with the costs application against the Applicant, it only became apparent that the Applicant’s employment was to cease on 30 June 2010 during the evidence given by Mr Heathcote. By then the matter, at the initial hearing, was nearly completed, except for final submissions.
 The Tribunal is satisfied that none of the criteria set out in s401(1) can be satisfied.
 It is the Tribunal’s view that both the Applicant was entitled to pursue his claim and have it tested and Mr Tucker was entitled, and in fact did, represent the interests of the Applicant based on proper professional conduct and legal professional privilege.
 Therefore, the application for costs against Mr Tucker is also rejected.
 A further point was raised by Mr Donaghey in relation to the wording at s401(1) where it states:
“401 Costs orders against lawyers and paid agents
(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 ...”
 The argument by Mr McKenna, on behalf of Mr Tucker, was that Mr Tucker was not the recipient of permission to appear under s.596 and on a proper reading of that provision, which the Tribunal is obliged to apply, there is no jurisdictional basis for this application to be made against Mr Tucker under s.401
 Mr Tucker, the solicitor representing Mr Andrews, was the instructing solicitor on the day of the initial proceedings. Ms Nelson, of counsel, was representing Mr Andrews and it is argued by Mr McKenna that it was Ms Nelson who was given permission under s.596 to appear before the Tribunal.
 It is an interesting point raised by Mr Donaghey, on behalf of the Respondent, and addressed by Mr McKenna. It is one that the Tribunal does not need to turn its mind to at this point given that it has rejected the costs application. However, it may be a point that may need to be addressed at some future point where a costs application, as in this case, is brought against an instructing solicitor but because the instructing solicitor is not the one who seeks permission but counsel is obliged to seek permission, whether in fact a costs application could be brought and even if it could, whether it would be successful given that the instructing solicitor would not have been the one seeking permission to appear.
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