DECISION

Fair Work Act 2009

s.394—Unfair dismissal

ss.400A, 611—Costs

Amara Somasundaram
v
Department of Education & Training, North-Eastern Victoria Region
(U2015/2980)

Application for relief from unfair dismissal - quantum of costs.

[1] This is the second decision of the Commission in relation to an application by the Applicant for a costs order against the Respondent in relation to proceedings concerning the Applicant’s unfair dismissal application.

[2] At the conclusion of the hearing on 19 February 2016 in relation to the costs application the Commission said:

“PN349 My decision, in the first instance, will only be about the first part of this case. If I decide in your favour, Ms Somasundaram we will have a second hearing about the second part of the case. If I decide against your application then, having decided the first part I have actually decided the entirety of the matter and there will be no further hearings. So you understand very clearly the way in which this will unfold? Good. Then, on that basis, thank you both for your submissions today. The Commission stands adjourned.”

[3] The Commission issued a decision 1 on 9 March 2016 determining the costs application in favour of the Applicant.

[4] At the direction of the Commission the Applicant produced and filed with the Commission details of the amount of costs which the Applicant sought to be ordered by the Commission consistent with the decision of the Commission.

[5] The detailed claimed costs were referred to the Respondent for its consideration. The Respondent agreed to pay most of the costs claimed by the Applicant but opposed some of the claimed costs on the basis that they were costs which fell outside the decision of the Commission. As no agreement was reached between the Applicant and the Respondent as to the amount of the costs order, the matter was listed for further hearing before the Commission.

[6] At the hearing on 15 June 2016 the focus of both the Applicant and the Respondent was on the costs claimed by the Applicant which the Respondent opposed.

[7] On 27 May 2016 the Respondent’s legal representatives wrote to the Applicant agreeing to pay most but not all costs claimed by the Applicant.

“…we confirm the Department agrees to pay to you:

Solicitor Fees $49,870.00
Counsel Fees $36,300.00

TOTAL LEGAL FEES $86,170.00 (incl. GST)

3. Personal costs claim

3.1 We note that you have sought to recover $1,186.56 in personal costs incurred by you, including travel expenses, printing, photocopying and postage. We note that not all of these costs were incurred in the Approved Period.

3.2 While we do not consider that the Department has any obligation to pay these costs to you as they are not legal costs, the Department is willing to include these costs in the calculations as a gesture of good faith and in an effort to reach agreement on the total costs payable.

4. Costs incurred outside of the Approved Period

4.1 You have also sought to recover costs incurred outside of the Approved Period, including:

(a) $12,562.00 in legal fees incurred between 31 July 2014-22 January 2015 in relation to ‘the dismissal process’;

(b) $15,752.70 for costs incurred in obtaining two ‘Specialist Reports’ in relation to a Supreme Court negligence proceeding and a Merit Protections Board hearing in September 2014.

4.2 On the basis of Commissioner Ryan’s decision and subsequent confirmation that costs are payable from 19 February 2015 onwards in respect of the unfair dismissal period, the Department is not required to pay these amounts.

5. Underpayment of remuneration and back pay

5.1 In relation to your underpayment and back pay claims, we do not consider that any such amounts form part of the indemnity costs calculation as they are not legal costs.

6. Interest

6.1 The decision made by Commissioner Ryan did not include a payment in relation to interest and the Department declines to make an additional payment in respect of interest.

7. Exemplary Damages

7.1 This claim falls outside of the issues addressed in Commissioner Ryan’s decision and the Department declines to pay an amount in respect of exemplary damages.”

[8] On 7 June 2016 and in compliance with directions issued by the Commission, the Applicant provided a detailed response to the position adopted by the Respondent in its letter of 27 May 2016. The Applicant repeated her position at the hearing on 15 June 2016.

Exemplary Damages

[9] The Applicant contended that an amount of exemplary damages should be included in the order issued by the Commission. The Applicant relied on s.47 of the Protected Disclosure Act 2012 (Vic) which permits the recovery of damages “in any court of competent jurisdiction”. The Applicant specifically contended as follows:

“The Commission, as far as the applicant believes, is a court of competent jurisdiction and has the power to award costs and damages incurred due to the actions taken by the Department of Education and Training that is contrary to the public interest.”

[10] Whilst the Commission does have the power to award costs such power arises solely from the terms of the Fair Work Act. The Commission is not a court and most certainly not a court of competent jurisdiction as referred to in s.47 of the Protected Disclosure Act 2012 (Vic). The Applicant’s contentions in relation to exemplary damages is unsound in every aspect and must fail.

Interest

[11] The Applicant claims that the costs order should include an amount of interest. The Applicant did not identify an actual amount of interest, the rate of interest that should be used or the principle upon which interest should be applied.

[12] The Respondent contended that “in the absence of any statutory provision authorising this Commission to make an order of interest, no such order ought to be made.” 2

[13] The Commission does not need to consider whether or not it can make an order for the payment of costs and include a component by way of interest. In the present matter the lack of any specific claim for interest and the basis for calculating such a claim for interest must lead to the conclusion that the Commission could not, on the basis of the Applicant’s contentions and material, even commence a process of calculating an amount of interest.

[14] The Applicant has failed to establish either the basis for or the amount sought as interest. This aspect of the Applicant’s calculation of the costs to be ordered must fail.

Underpayment of remuneration and back pay

[15] The Applicant has claimed that the Respondent has not complied with the order of the Commission made under s.391(3). The Applicant contends that an amount should be included in the costs order to compensate the Applicant for the “costs incurred due to not having the money in the applicant’s account”.

[16] In the present matter the lack of any specific claim for costs incurred and the basis for calculating such a claim for costs incurred must lead to the conclusion that the Commission could not, on the basis of the Applicant’s contentions and material, even commence a process of calculating an amount for “costs incurred due to not having the money in the applicant’s account”.

[17] The Applicant has failed to establish either the basis for or the amount sought as “costs incurred due to not having the money in the applicant’s account”. This aspect of the Applicant’s calculation of the costs to be ordered must fail.

Costs incurred by the Applicant before 19 February 2015.

The Applicant has claimed legal costs incurred by her before 19 February 2015. In the Respondent’s letter of 27 May 2016 these costs were identified under two headings:

(a) $12,562.00 in legal fees incurred between 31 July 2014 – 22 January 2015 in relation to ‘the dismissal process’; and

(b) $15,752.70 for costs incurred in obtaining two ‘Specialist Reports’ in relation to a Supreme Court negligence proceeding and a Merit Protections Board hearing in September 2014.

[18] Counsel for the Respondent, Mr D’Abaco, identified the individual invoices which related to these two cumulative claims. For the sake of convenience I will address the claims of the Applicant by reference to the two headings used by the Respondent.

[19] The Applicant’s claim for $12,562.00 must be rejected. Each of the invoices relate to legal costs incurred before 19 February 2015. Whilst it is reasonably clear that the costs were incurred by the Applicant as part of an ongoing process of disputation between the Applicant and the Respondent which led to the Applicant’s dismissal none of the costs were incurred after the Applicant was dismissed on 23 January 2015. All of these costs relate to the pre-dismissal disputation between the Applicant and the Respondent.

[20] The Applicant’s claim for $15,752.70 must be rejected. Each of the invoices relate to costs incurred before 19 February 2015. I have no doubt that the costs for the two Specialist Reports related to the ongoing process of disputation between the Applicant and the Respondent which led to the Applicant’s dismissal. However, the very nature of the claimed costs makes it clear that these costs had nothing to do with the unfair dismissal proceedings before the Fair Work Commission.

Conclusion

[21] The Commission determines that the Respondent be ordered to pay an amount of $87,356.56 to the Applicant in relation to costs incurred by the Applicant. The amount to be ordered includes an amount of $1,186.56 for personal costs incurred by the Applicant and which the Respondent, whilst denying any obligation to pay such costs has agreed to pay these costs “as a gesture of good faith”.

[22] An order to give effect to this decision will be issued separately. The Respondent will be ordered to pay the costs within 14 days of the date of the order.

COMMISSIONER

Appearances:

Ms A. Somasundaram on her own behalf.

Mr J. D’Abaco, of counsel, for the respondent.

Hearing details:

2016.

Melbourne:

June 15.

 1   [2016] FWC 1504.

 2   Transcript at PN480.

Printed by authority of the Commonwealth Government Printer

<Price code A, PR582138>