[2012] FWA 10164

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Fair Work Act 2009
s.394—Unfair dismissal

Sharn Stanley
QBE Management Services Pty Limited T/A QBE



Costs Order under s.611 of the Act, whether costs should be awarded on an indemnity basis


[1] This decision follows an earlier decision determining the Respondent’s application pursuant to s.611 of the Fair Work Act 2009 (the Act), for an order requiring the Applicant to pay its costs on an indemnity basis. I determined that I should exercise my discretion under s.611(2)(b) of the Act and award costs against the Applicant from the date of her application for relief from unfair dismissal (costs decision). 1 The determination of the quantum of costs and whether costs should be awarded on an indemnity basis was, however, deferred for further hearing.2

[2] Subsequently, I decided that the further hearing would be confined to the determination of whether costs should be awarded on an indemnity basis, with a bill of costs to be filed and served by QBE consequent on the decision of the Tribunal, for an ultimate determination regarding the actual costs to be ordered.

Costs of Costs Hearings

[3] At the hearing, QBE indicated that it sought the costs of the hearings conducted in relation to its costs applications, as well as costs incurred by it from the date the Applicant made her application to the date the Applicant discontinued her application on 21 June 2012.

[4] S.611(2) of the Act relevantly provides:

[5] It is to be noted that s.611 of the Act empowers Fair Work Australia (FWA) to order costs “in relation to an application”. In this matter the application made under s.394 for unfair dismissal remedy was discontinued on 21 June 2012. On a plain reading of this section, the power to award costs is one confined to costs incurred whilst the application was extant.

[6] Relevantly, s.402 of the Act, which deals with applications for costs orders, provides that applications for ‘costs under s.611 in relation to a matter arising under’ Part 3.2 must be made within 14 days of either FWA determining the matter or the matter is discontinued.

[7] In context, s.611 of the Act should properly be construed as a power to award costs in relation to an application being a matter arising under Part 3.2. In this case the matter was an application under s.394 for an order under Division 4 of Part 3.2 granting a remedy.

[8] In Dean v Sybecca Pty Ltd T/A Sleepy Lagoon Hotel 3 (Dean), Richards SDP observed, regarding a costs application under s.401 of the Act in relation to earlier costs application hearing:

[9] The Respondent submits that s.611 of the Act is not so confined and should be construed broadly to include the award of costs incurred in the conduct of the hearing to determine their costs application.

[10] S.403 of the Act provides:

[11] The Respondent refers, in support of its submissions, to item 1111 of Schedule 3.1 to Regulation 3.08 of the Fair Work Regulations 2009 (Regulations), which specifies amounts to be charged for an attendance on taxation of costs for a solicitor or clerk. The Respondent submits that the inclusion of the schedule of costs associated with taxation of costs means that Parliament intended that s.611 ought to be construed to extend to costs for the fact of costs proceedings. 4

[12] I am not satisfied that the inclusion in a schedule to the Regulation of an amount for attendance on taxation of costs should operate to override the meaning of s.611 construed in context.

[13] Consequently, I find that s.611 of the Act does not permit the award of costs in relation to a costs hearing(s) conducted to determine an application made under s.402 of the Act for a costs order pursuant to s.611 in relation to an application being a matter arising under Part 3-2.

[14] I indicate here that, even if I had found in favour of the Respondent’s submissions, I would have refrained to exercise my discretion primarily for the reasons averted to by Richards SDP in Dean5

Power to Award Indemnity Costs

[15] Indemnity costs were awarded by a Full Bench in Goffett v Recruitment National Pty Ltd 6 (Goffett) under the Workplace Relations Act 1996 (the WR Act). S.658(3) of the WR Act provided that costs are to be awarded where the Commission was satisfied a party had caused costs to be incurred because of the first party’s unreasonable act or omission in connection with the conduct of the proceeding.

[16] The Full Bench found that the Respondent’s conduct amounted to an unreasonable act or omission and that satisfaction as to this ground for the award of costs, by definition, involved “some relevant delinquency”. 7 Consequently the test having regard to the relevant authorities for the award of costs on an indemnity basis was satisfied.

[17] Under the Act, the award of costs on the ground of unreasonable act or omission is specified under s.401 dealing with costs orders against lawyers and paid agents. S.401 is to be found in Part 3-2 - Unfair Dismissal. S.611 of the Act, the general provision dealing with costs which provides for costs against a party, does not specify unreasonable act or omission as a ground. By contrast the general provision dealing with costs under the WR Act, s.824 included this ground. 8

[18] The question arises whether FWA has the power to award indemnity costs under s.611 of the Act.

[19] By its express terms, FWA’s power to award costs is not limited to ‘items of expenditure’ contained in the schedule.

[20] Schedule 3.1 of the Regulations sets out the Schedule of Costs. The Schedule of Costs sets out in tabular form various items, being matters for which charge may be made and the ‘charge’. The ‘charge’ for each item is expressed in different forms. In some cases a particular dollar amounted is specified. In some cases the charge refers to a specific dollar amount or an amount ‘at the discretion of FWA’. In other cases, the charge is specified as ‘an amount FWA considers reasonable in the circumstances’.

[21] S.403 of the Act expressly provides that FWA is not limited to the items of expenditure in any schedule. Moreover, Schedule 3.1 to Regulation 3.08 of the Regulations contemplates, in relation to a number of items specified, the exercise of a discretion by FWA as to amounts to be awarded.

[22] It is relevant to note that in Goffett, the Full Bench said:

[23] I am satisfied that s.611 of the Act is a broad discretion given to FWA to award costs, provided it is satisfied as to certain circumstances. Taking into account the operation and effect of s.403 of the Act, Schedule 3.1 and Regulation 3.08, I am satisfied that this broad discretion includes the discretion to award costs on a party-party or indemnity basis. Of course, the exercise of discretion and the basis on which costs should be awarded will be conditioned by the approach taken by relevant authorities.

Principles - Indemnity Costs

[24] The relevant authorities extracted in Goffett (footnotes omitted) are set out below:

[25] Justice Sheppard said in Colgate-Palmolive Co v Cussons Pty Ltd 10 (Colgate Palmolive) at 233:

[26] In J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers, Western Australian Branch and Anor (No 2) 11, Justice French said:

[27] In Commonwealth Bank of Australia v Mohamad Saleh and Ors 12 (Commonwealth Bank decision), indemnity costs were awarded against the defendants, following a finding by the Court that they had sought to defraud the Bank of around $7 million.13 In the decision on costs, Justice Einstein said:

QBE Submission

[28] QBE submit that costs should be awarded on an indemnity basis from the time the Applicant commenced her application. In doing so, they rely on the following extracts from the costs decision: 14

[63] Also filed were a copy of records of the Applicant’s pay slip for the week ending 30 September 2011, which is said to show that the Applicant worked her full 72.5 hours for the fortnight ending 30 September 2011 and copies of emails sent by the Applicant under her QBE email address to other recipients (including clients and other employees) dated 29 September 2011. These disclose that, at the very least, the Applicant had access to her QBE email address on that day.

[64] I am not satisfied that the Applicant has or had a reasonable belief or an objective basis for her written submission that the Citibank account is not hers. In addition, it is clear the Applicant was not truthful in the interview with QBE on 5 February 2012 and in her witness statement filed on 23 April 2012, when she denied knowing a Sarah P.

[65] The consequence is that the fact of the deposits of large sums of unauthorised transactions into the Citibank account and the transfer of monies from Sarah P’s CBA Accounts into accounts held by the Applicant and into the Citibank account, renders in my opinion, the application for unfair dismissal remedy so lacking in merit or substance so as to be not reasonably arguable. I agree with QBE that any deficiencies in procedure could never overcome the incontrovertible documentary evidence.

[66] I am satisfied that it was reasonably apparent to the Applicant at the time she made her application, that there was no reasonable prospect of success. I am further satisfied that in the circumstances of this case I should exercise my discretion under s.611 of the Act by determining that the Applicant must bear the costs incurred by QBE from the date she made her application, 28 February 2012.

[67] I defer the question of the quantum of costs to be ordered for further a hearing. QBE submit that any costs should be on an indemnity basis. Given the failure of the Applicant to attend the hearing and my decision to refuse the Applicant’s adjournment, the question whether costs should be awarded on an indemnity basis is also deferred for a further hearing.

[29] These passages referred to above, the Respondent submits, satisfy the requirement of “some special or unusual feature in the case to justify the court exercising its discretion” to award indemnity costs. Amongst other things, QBE submits they indicate:

[30] The Respondent submits the decision of Justice Einstein in the Commonwealth Bank decision is directly on point, specifically it is submitted that His Honour’s observation, that Mr Edge “persisted throughout the whole of the hearing in denying the bank's allegations in respect of his fraud: knowing those allegations to be true” applies equally to Ms Stanley – as does Justice Einstein's summation that “[t]he case for a indemnity costs against [him] is plainly a fortiori”.

[31] Moreover, the Respondent relies on a “without prejudice offer” dated 7 May 2012 sent by the Respondent’s solicitors to the Applicant’s solicitors. The correspondence set out certain matters then known to the Respondent, alleged that the Applicant had been responsible for defrauding the Respondent and offered not to pursue the Application for costs if she discontinued. The letter placed the Applicant on notice that in the event the Applicant’s claim is dismissed the Respondent would seek costs on an indemnity basis. The failure of the Applicant to accept this offer, the Respondent asserts, amounts to an imprudent refusal of an offer to compromise: Colgate Palmolive.

Applicant’s Submission

[32] The Applicant opposes the award of costs on an indemnity basis.

[33] Mr McArdle submits his client acknowledges she should not have made an application under s.394 of the Act because of the jurisdictional barriers facing her. However, in this the Applicant was badly advised by her then lawyers. 17

[34] Mr McArdle submitted his client should not be called upon to award costs in what, in effect, is a common law accusation of theft. 18 It is submitted that the bulk of the costs sought is in relation to unnecessary forensic examination in relation to allegations of fraud which properly belong in another jurisdiction.19


[35] In this matter I have found that it was reasonably apparent to the Applicant that she had no reasonable prospect of success at the time she made her application on 28 February 2012. I have done so on the facts known or should have reasonably been known to her having regard to the material referred to in [33] of the costs decision. The award for indemnity costs requires some further factor influencing my discretion.

[36] I am satisfied that the further factor operated from 18 May 2012 when, provided with all the material the Respondent relied on, and which is summarised in the costs decision at [33], the Applicant failed to discontinue her proceedings. Allowing some time for the Applicant to read QBE’s Outline of Submission and witness statements filed on 18 May 2012, I am satisfied that it was “delinquent” of the Applicant not to have discontinued on 20 May 2012.

[37] The fact her lawyers had ceased to represent her on 21 May 2012 and she was self represented does not diminish what can only be described as delinquent conduct in failing to discontinue her application.

[38] I am therefore satisfied and determine that costs be awarded:

[39] Directions will be issued requiring the Respondent to submit a Bill of Costs in accordance with my determination.



Ms E. Raper of counsel - Representative of QBE Management Services T/A QBE

Mr C. McArdle - Representative of Ms Sharn Stanley

Hearing details:


Melbourne by videolink to Sydney

12 December

 1   [2012] FWA 7165 at [57]

 2   Ibid

 3   [2011] FWA 1010

 4   Transcript of Hearing - 12 December 2012 at PN829

 5   Op.Cit at [20]

 6   [2009] AIRCFB 626 at [47].

 7   [2009] AIRCFB 626 at [52].

 8   S.824 of the WR Act.

 9   [2009] AIRCFB 626 at [48]

 10   (1993) 46 FCR 225

 11   (1993) 46 IR 263 at 303

 12   [2007] NSWSC 990 at [5]-[7]

 13   Commonwealth Bank of Australia v Mohamad Saleh and Ors [2007] NSWSC 903

 14   [2012] FWA 7165 at [57] - [65]

 15   See [33] above

 16   Witness Statement of Geoffrey Burnett Brown, Annexure GB-1.

 17   Transcript of Hearing - 12 December 2012 at PN798 and PN803

 18   Transcript of Hearing - 12 December 2012 at PN802

 19   Transcript of Hearing - 12 December 2012 at PN813

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