FWC 4476
FAIR WORK COMMISSION
Fair Work Act 2009
s.789FC - Application for an order to stop bullying
ADELAIDE, 7 JULY 2014
Application for costs in connection with an application for an FWC order to stop bullying - substantive application dismissed on jurisdictional grounds - whether should have been reasonably apparent to applicant that application had no reasonable prospects of success - whether other grounds warrant a costs order - application for costs dismissed.
1. Background to the costs application
 This matter arises in the context of an application by Ms S.W. under s.789FC of the Fair Work Act 2009 (the FW Act) for an order to stop bullying conduct. The applicant is a teacher employed under the School Education Act 1999 (WA) (School Education Act) and the workplace concerned is a public school conducted by the Western Australian Department of Education (the WA Department).
 The s.789FC application was dismissed by the Commission on jurisdictional grounds in a decision 1 issued on 2 June 2014 (the substantive decision). The basis of the decision was that the relevant workplace was not a constitutionally-covered workplace,2 and that even if bullying behaviour occurred, it could not lead to a finding that the applicant had been bullied at work within the particular meaning of the FW Act.3
 The substantive decision concluded as follow:
“ Ms S.W. indicted that she wished to discontinue the matter if a finding of this nature was made. Whilst that course of action is entirely reasonable, I am obliged to formally dismiss the application given my findings, and will do so, if the application is not expeditiously discontinued by the applicant.”
 The WA Department applied for costs immediately upon the substantive decision being issued by the Commission.
 Ms S.W. subsequently filed a notice of discontinuance in relation to the s.789FC application.
2. The costs application
 The WA Department has sought that costs be awarded against Ms S.W. principally on the following basis:
● It should have been reasonably open to the applicant that her claim had no prospect of success. The Commission’s own guidelines at page 4 clearly indicate which businesses are not constitutionally-covered workplaces and identifies amongst others, State Government departments.
● Even if the Commission had found there was jurisdiction to determine the matter the Order being sought could not be issued as the applicant was no longer located at the workplace where the alleged behaviour was occurring.
● The applicant’s response to 1.1 in Form F72 was inaccurate.” 4
 The reference to 1.1 in Form F72 refers to the original application and relates to whether Ms S.W. was still employed or engaged at the relevant workplace and/or required to still interact with the individuals cited in the application as being responsible for the alleged bullying conduct.
 Ms S.W. has opposed the costs application and in effect contends, amongst other matters, that:
● She was advised and referred to the Commission by a member of the Parliament of Western Australia and legal professionals;
● The WA Department had a “business legal name” and used other names interchangeably and the identity of the actual employer was not clear to her or broadly understood by others;
● There was merit in her s.789FC application; and
● The concept of continuing engagement in the “workplace” was understood by her to be the WA Department more generally.
 Section 611 of the FW Act provides as follows:
(1) A person must bear the person’s own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person’s application, or the first person’s response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).”
 In the absence of a particular provision dealing with costs in relation to anti-bullying matters under Part 6-4B of the FW Act, s.611 applies to such applications.
 The discontinuance of the s.789FC application by Ms S.W. does not prevent the costs application being considered and determined by the Commission.
 A recent Full Bench of the Commission 5 considered the operation of the relevant costs provisions of the FW Act and summarised them in the following terms (endnotes omitted):
“ Section 611 sets out a general rule - that a person must bear their own costs in relation to a matter before the Commission (s.611(1)) - and then provides an exception to that general rule in certain limited circumstances. The Explanatory Memorandum confirms this interpretation of the section, it is in the following terms:
2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.
 In the context of s.570 and its legislative antecedents courts have observed that an applicant who has the benefit of the protection of a provision such as s.570(1), (ie the general rule that parties bear their own costs), will only rarely be ordered to pay costs and that the power should be exercised with caution and only in a clear case. In our view a similarly cautious approach is to be taken to the exercise of the Commissions powers in s.611 of the FW Act.
 We now turn to the exceptions to the general rule expressed in s.611(1) and the meaning of the expression ‘vexatiously or without reasonable cause’.
 The question of whether an application was made ‘vexatiously’ looks to the motive of the applicant in making the application. It is an alternative ground to the ground that the application was made ‘without reasonable cause’ and may apply where there is a reasonable basis for making the application. In Nilsen v Loyal Orange Trust (Nilsen) North J observed that this context requires the concept of vexatiousness to be narrowly construed. His Honour went on to state that an application will be made vexatiously ‘where the predominant purpose ....is to harass or embarrass the other party, or to gain a collateral advantage’. Deane and Gaudron JJ made a similar observation in Hamilton v Oades in which they said:
“The terms ‘oppressive’ and ‘vexatious’ are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are ‘seriously or unfairly burdensome, prejudicial or damaging’ and ‘productive of serious and unjustified trouble and harassment’.”
 We now turn to the expression ‘without reasonable cause’. A party cannot be said to have made an application ‘without reasonable cause’, within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful. The test is not whether the application might have been successful, but whether the application should not have been made. In Kanan v Australian Postal and Telecommunications Union, Wilcox J put it this way:
“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, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
 The particular operation of s.611(2)(b) of the FW Act has also been summarised by a Full Bench of the Commission in Metecno Pty Ltd T/A Bondor v I Cameron 6 in the following terms (endnotes omitted):
“[13 The requirement, for enlivening the discretion to award costs under s.611(2)(b) of the Act extends beyond a finding, in an appeal, that no error is evident in the primary decision. The making of an order for costs under s.611(2)(b) of the Act requires satisfaction that, viewed objectively, it should have been reasonably apparent to Bondor that its appeal had no reasonable prospect of success.
 In Hatchett v Bowater Tutt Industries Pty Limited (No 2), when considering s.347 of the Industrial Relations Act 1988 (Cth), Von Doussa J stated that the test imposed by the expression “vexatiously or without reasonable cause” is similar to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings. In General Steel Industries Inc v Commissioner for Railways (N.S.W.) and Others (General Steel), Barwick CJ observed that the test in relation to the summary power to dismiss actions had been expressed in various ways, including “‘so obviously untenable that it cannot possibly succeed’; ‘manifestly groundless’; ‘so manifestly faulty that it does not admit of argument’; [and] ‘discloses a case which the Court is satisfied cannot succeed’”.
 The language in General Steel adopted by Van Doussa J is reflected in Kanan’s consideration of the statutory term “without reasonable cause”: “on the applicant’s own version of the facts, it is clear that the proceeding must fail”, in Harris v Home Theatre Group Pty Ltd T/A Home Theatre Group: “hopeless or bound to fail”and in Legaz v Northern Beaches Community Services Pty Ltd: “manifestly untenable or groundless or so lacking in merit or substance as to not be reasonably arguable”.
 In Baker v Salva Resources Pty Ltd, a Full Bench summarised the approach to be taken in relation to s.611(2)(b) of the Act 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:
• ‘should have been reasonably apparent’ must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test [Wodonga Rural City Council v Lewis, PR956243, at para 6]; and
• a conclusion that an application ‘had no reasonable prospect of success’ should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless [Deane v Paper Australia Pty Ltd, PR932454, at paras 7 and 8] or so lacking in merit or substance as to be not reasonably arguable. [A Smith v Barwon Regional Water Authority,  AIRCFB 769 at para 48].”
 Reflecting that approach, 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”.”
 Accordingly, it is necessary to objectively consider whether any of the grounds in s.611(2) apply to the circumstances of the s.789FC application. Only in the case of a positive finding on one of those grounds does a discretion arise to order that some or all of the other party’s costs be paid.
 The WA Department relies principally upon the notion that it should have been reasonably apparent to Ms S. W. that her application had no reasonable prospect of success. Whilst not expressly relying upon the concept of the application being made vexatiously or without reasonable cause, the costs application does raise allegations of inaccuracy and accordingly I have considered all of the potential grounds raised by s.611(2) of the FW Act.
 I deal firstly with the issues associated with the workplace and the fact that Ms S.W. is now at a different work location than the school where the alleged bullying took place. I assume for present purposes that the basis of the WA Department’s grounds is related to the fact that in order to grant an anti-bullying order, the Commission must, in effect, be satisfied that the applicant worker is at risk of further bullying by the individuals cited in the application. 7
 I have not dealt with the merit of the s.789FC application and as a result no findings have been made about the substance of the application. It is however reasonably apparent from the application that the individuals cited in the application include both those with whom she worked at the School concerned and others more generally in the WA Department. Ms S.W. also contended that the transfer from the original school itself was part of the unreasonable conduct.
 It is conceivable that an applicant in these circumstances could contend that there was a further risk of bullying as a result of more general dealings with the individuals as part of departmental business and work interactions with them more generally. Further, the applicant could have argued that she was seeking to overturn the effect of the transfer through other means, and as a result, the risk of further bullying remained in that context.
 In any event, in relation to the future risk grounds associated with her work location, there is no basis to find that Ms S.W. made the application vexatiously or without reasonable cause, or in circumstances where it should have been apparent that it had no reasonable prospects of success.
 The jurisdictional objection determined by the Commission related to the whether the workplace concerned was a constitutionally-covered workplace. In this case, this ultimately meant a consideration as to whether the workplace was conducted by a constitutional corporation. I accept that the limitations upon the operation of the anti-bullying jurisdiction, including that it may not apply to workers in State Government Departments, have been communicated publically by the Commission and others. In that light, I could be satisfied that it should have been reasonably apparent to Ms S.W. that a potential jurisdictional hurdle might arise concerning her application. However, the relevant question is whether it should have been reasonably apparent to Ms S.W. that her application had no reasonable prospects of success.
 Although as general rule, it might be said that employees of State Government Departments are not covered by the anti-bullying jurisdiction of the FW Act, the jurisdictional matter actually required consideration as to the corporate or other status of the applicant’s workplace. That is, the identity of the applicant’s employer may not always be decisive; rather it is a question as to who is conducting the workplace concerned and whether it is a constitutionally-covered workplace. 8 This makes these matters more complex than might initially appear.
 The fact that the WA Department operated with an ABN was a consideration but ultimately not decisive. Further, all of the other contentions advanced by Ms S.W. concerning the nature of her employer and workplace ultimately failed. However, the operation of the anti-bullying jurisdiction of the Commission is relatively new, the potential application of the laws in similar circumstances had not been previously determined, and relatively complex legal issues were ultimately involved given the need to ascertain the nature of the workplace concerned.
 I note also that Ms S.W. contends that she was advised to bring the s.789FC application. There is no evidence to support those particular contentions and despite the absence of objection from the WA Department, I do not intend to rely upon these in determining the costs application. Further, as outlined earlier, I have made no findings about the substantive allegations made by Ms S.W. in the originating application, given the absence of a merits hearing. The allegations made would however appear to be capable of being considered as unreasonable conduct for the purposes of this jurisdiction.
 I am not persuaded that it should have been reasonably apparent to Ms S.W. that her application had no reasonable prospects of success. I am also not satisfied that any of the grounds raised by s.611 apply in this case.
 Accordingly, the costs application is dismissed and I so order.
The Western Australian Department of Education/The Crown in the Right of the State of Western Australia:
3 and 13 June 2014.
4 and 17 June 2014.
1  FWC 3288.
2 Ibid at .
3 Ibid at .
4 Email application from WA Department dated 3 June 2014.
5 E. Church v Eastern Health t/as Eastern Health Great Health and Wellbeing  FWCFB 810.
6  FWCFB 2128.
7 S.789FF of the FW Act.
8 See para  of the substantive decision.
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