Fair Work Act 2009
s 604 - Appeal of decisions

Costs application – permission to appeal and appeal – s 399A application to dismiss an unfair dismissal application – whether appeal instituted ‘without reasonable cause’ and/or with ‘no reasonable prospects of success’ – unreasonable act or omission – jurisdiction enlivened – discretion exercised – costs ordered on a party to party basis.

[1] In a decision of the Fair Work Commission (the ‘Commission’), the Full Bench refused permission to appeal and dismissed the appeal filed by Ms Robin Hansen (Ms Hansen) against a decision and order of Commissioner Platt in Matter U2015/16189 (Hansen v Calvary Health Care Adelaide Limited [2016] FWC 3472 and PR580948), on 3 August 2016; see: [2016] FWCFB 5223.

[2] On 17 August, 2016, the respondent to the appeal, Calvary Health Care Adelaide Limited (‘Calvary’), filed an application for costs against Ms Hansen. The costs application relied on ss 400A and 611 of the Fair Work Act 2009 (the ‘Act’) and was filed within the requisite time period set out in s 402 of the Act. Attached to the application was an itemised schedule of costs, on a party to party basis, totalling $5,000.00.

[3] On 19 August, 2016 directions were issued by the Full Bench for the filing of submissions and any supporting material by both parties. In accordance with usual practice and with the consent of both parties, the Full Bench proceeded to consider and determine the costs application ‘on the papers’.

SUBMISSIONS

For Calvary

[4] Mr P Walsh, Solicitor for Calvary, submitted that Ms Hansen’s application for permission to appeal and appeal of Commissioner Platt’s decision dismissing her initial unfair dismissal application under s 399A of the Act, was filed ‘without reasonable cause’. He set out the background to Calvary’s s 399A application which focused on whether:

a) Ms Hansen had failed to comply with the consent orders made by the Commissioner on 28 January 2016; and

b) whether Ms Hansen’s failure to comply with the orders was unreasonable.

[5] We have previously set out details of the Commissioner’s decision at paragraphs 6-13 of the appeal decision and do not repeat them.

[6] Mr Walsh submitted it was clear from the findings of fact made by the Commissioner, that Ms Hansen’s conduct was:

● a deliberate contravention of orders made on 28 January 2016;

● a course of conduct that involved multiple contraventions of the orders, rather than a single inadvertent contravention; and

● a course of conduct motivated to discourage a principle witness (Ms Barber) from participating in the hearing of Ms Hansen’s unfair dismissal application.

[7] It was further submitted that at the time Ms Hansen lodged her appeal application, she had the benefit of:

● her own knowledge about her conduct which was the genesis of the s 399A application;

● the evidence of two witnesses (Ms Barber and Mr Hocking) in the hearing of the s 399A application; and

● the decision of the Commissioner in which he made emphatic adverse findings as to Ms Hansen’s credibility based on her own evidence.

It followed that her appeal was brought ‘without reasonable cause’.

[8] Mr Walsh further put that Ms Hansen’s appeal made no challenge to the legal basis for the Commissioner’s decision and there was no challenge to the Commissioner’s findings on Ms Hansen’s evidence concerning the contravention of the orders. Ms Hansen’s central challenge was directed towards the Commissioner’s finding that Ms Barber was a witness of truth, in particular, with an attack on her alleged failed credibility as a reliable witness. This had no real connection to the issues before the Commission at that time. These matters reinforce the submission that Ms Hansen’s appeal was made ‘without reasonable cause’.

[9] Mr Walsh submitted that it should have been reasonably apparent to Ms Hansen that her appeal had no reasonable prospects of success. This was demonstrated by the fact that Ms Hansen did not identify any error in the Commissioner’s decision (other than she strongly disagreed with it). She sought to rely on new material which had not been presented as evidence in the Commissioner’s proceeding, in order to impugn the credibility of Ms Barber.

[10] Mr Walsh argued that Ms Hansen’s continued pursuit of her appeal application did not amount to a legitimate ‘robust’ pursuit of her unfair dismissal rights. The proper characterisation of Ms Hansen’s appeal was that she sought to run the same case she had put before the Commissioner, which itself was unrelated to the s 399A application, in the hope of achieving a different result. This constituted an ‘unreasonable act’ for the purpose of s 400A of the Act.

[11] Mr Walsh rejected Ms Hansen’s defence that her self-representation and unfamiliarity with the Commission’s processes were reasons why no costs order should be made. In any event, the Commission gave considerable latitude to Ms Hansen in the preparation and conduct of her appeal, including preparing her appeal book in circumstances where much of the material she submitted was irrelevant to the appeal. It was noted that the Commission and the Courts have made costs orders against self-represented parties when the statutory tests are satisfied, as in this case.

[12] Mr Walsh concluded that the Full Bench should exercise its discretion to order costs pursuant to ss 400A, 611(2)(a) or 611(2)(b) of the Act.

For Ms Hansen

[13] We summarise Ms Hansen’s submissions as follows, omitting the provocative and inappropriate language:

(a) she had been informed that the successful party in an unfair dismissal case would not be able to pursue their legal costs from the other party;

(b) she had been falsely accused and that, in fact, her accusers had engaged in the same conduct against her as she was alleged to have engaged in;

(c) Calvary’s investigation into the allegations against her (bullying of other staff) was flawed;

(d) Calvary had chosen to be legally represented and therefore incurred legal expenses at its own initiative;

(e) at a conciliation, a ‘member of the Commission’ had indicated that they believed her version of events and that her case should be heard;

(f) she is experiencing significant difficulty in obtaining employment, which she partly attributes to a false and misleading newspaper article related to her unfair dismissal application;

(g) due to the bullying by Calvary, she is not fit to work in the foreseeable future;

(h) she cannot afford to pay costs and would be faced with either being declared bankrupt or ending her life, if costs were awarded against her.

CONSIDERATION

Statutory Scheme and Principles

[14] This costs application is brought under both s 400A and s 611 of the Act. These sections are set out hereunder:

“400A Costs orders against parties

(1) The FWC may make an order for costs against a party to a matter arising under this Part (the first party) for costs incurred by the other party to the matter if 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 matter.

(2) The FWC may make an order under subsection (1) only if the other party to the matter has applied for it in accordance with section 402.

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

“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.

Note: This subsection is a civil remedy provision (see Part 4 1).”

[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).

[16] However, the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all. We note that Calvary does not seek its costs in relation to the appeal on an indemnity basis.

[17] Calvary’s application for costs relies primarily on the specific exclusions in s 611 set out in sub-clauses (2)(a) and (b); namely; that Ms Hansen’s appeal was made:

● without reasonable cause; and

● in circumstances where it should have been reasonably apparent to Ms Hansen that her appeal had no prospects of success.

[18] It was further submitted that the Commission could rely on s 400A in similar fashion, in that Ms Hansen’s pursuit of her appeal was an ‘unreasonable act…in connection with the continuation of the matter’. Section 400A of the Act applies to an appeal against a decision in relation to an unfair dismissal application; see: Matthew Gugiatti v SolarisCare Foundation Ltd [2016] FWCFB 2478. We accept that the section applies in respect to a decision on a s 399A application relevant to a substantive unfair dismissal application. Section 400A is a relatively recent amendment to the Act (1 January 2013) and is designed to provide the Commission with a discretionary power to award costs against a small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. As stated in the Explanatory Memorandum accompanying the s 400A amendment, ‘the power is only intended to apply where there is clear evidence of unreasonable conduct by the first party’ and ‘is intended to capture a broad range of conduct, including a failure to discontinue an unfair dismissal application made under s 394’.

[19] The frequently cited Full Bench authority in relation to the question of whether an application was made without reasonable cause is that set out in Elizabeth Church v Eastern Health t/as Eastern Health Great Health and Wellbeing [2014] FWCFB 810. At paragraphs 30-33 the Full Bench said:

‘[30] We now turn to the expression ‘without reasonable clause’. 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.”

[31] In the context of an appeal the question becomes whether, having regard to the arguments available to the appellant at the time of instituting the appeal, there was no substantial prospect of success. As Wilcox CJ (with whom Madgwick J agreed) observed in Imogen Pty Ltd v Sangwin:

“The prospect must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If having regard to those matters, there was not insubstantial prospect of the appeal achieving some success, albeit not necessarily complete success, then it would seem to me it cannot be fairly described as having been instituted ‘without reasonable cause’. This is so even if, in the result, the appeal proved unsuccessful.”¹

[32] In the same matter Ryan J said:

“The existence of ‘‘reasonable cause’’ within the meaning of s 347 falls to be determined at the time when the relevant proceedings were instituted. The fact that the party instituting the proceedings later discontinues them is therefore not a matter to be taken directly into account in the application of the section. However, an appeal stands in somewhat different case from proceedings at first instance in that discontinuance may bear indirectly on the discretion conferred by s 347 by tending to confirm an impression derived from the grounds of appeal and the reasons for judgment below that the prospects of success on the appeal were slight.

Not without significance to an assessment of the reasonableness of the institution of an appeal are the amount at issue and the nature of the points raised by the notice of appeal. Where, as here, the appeal is essentially against findings of fact made by the trial judge after a two day hearing resulting in a judgment for $16,900 and raises no important or distinctive point of law or principle, the Court may more readily conclude that it was not reasonable in the circumstances to have instituted it. On a fairly fine balance of the relevant considerations and not without hesitation, I have been led to reach that conclusion in this case and agree with the Chief Justice and the orders which he has proposed.” ¹⁵

[33] In construing s.570 and its legislative antecedents courts have observed that the test imposed by the expression ‘without reasonable cause’ is similar to that adopted for summary judgement, that is ‘so obviously untenable that it cannot possibly succeed’, ‘manifestly groundless’ or ‘discloses a case which the Court is satisfied cannot succeed’. (footnotes omitted)

See also Baker v Salva Resources [2011] 211 IR 374 and Holland and another v Nude Pty Ltd t/a Nude Delicafe [2012] FWAFB 6508.

[20] We would emphasise that this application for costs relates only to the appeal before us and whether the circumstances in relation to Ms Hansen’s prosecution of her appeal attract considerations under ss 400A and/or 611(2) of the Act. We are aware that on 31 May 2016, Commissioner Platt awarded costs against Ms Hansen in respect to the s 399A proceedings determined by him; see: Robin Hansen v Calvary Health Care Adelaide Limited [2016] FWC 7718. The fact that a person may have comprehensively lost their unfair dismissal claim, including the outcome being based on findings of witness credit, and that costs are awarded against that person, based on the tests under ss 611 and 400A, does not necessarily mean that an appeal against that decision will result in a similar costs outcome. Nor does it follow that an appeal which is dismissed because it does not attract the requisite public interest considerations (as in this case), would more likely result in a successful costs application against a party in an appeal. The focus must always be on the proceedings to which the costs application is directly related and to the considerations arising under ss 611 and 400A of the Act in that context.

[21] We turn to the submissions of the parties and intend to make a general observation about Ms Hansen’s submissions.

[22] Ms Hansen’s filed material in the costs application is the third time she has made repeated assertions of unfairness, allegations of lying against other persons, charges of conspiracy between witnesses and Calvary management and declarations of her own trustworthiness and truthfulness, including again relying on a lie detector test she had undertaken on 6 October 2015. Ultimately, however, these claims do not garner weight or become more believable simply because of the number of examples Ms Hansen referred to, the dogmatic force of her subjective belief as to these claims, or by the numerous instances Ms Hansen sought to repeat, ad nauseam, the evidence she would have sought to adduce, had her unfair dismissal application reached a hearing on its merits. Regrettably, the fact her case never made it to a substantive hearing was the consequence of Ms Hansen’s own conduct and not due to the actions of anyone else, most particularly Calvary. Had she complied with the orders she had agreed to, she would have had her ‘day in court’.

[23] As to some of Ms Hansen’s specific submissions, we would observe as follows:

[24] Ms Hansen claimed she had been informed that a successful party in an unfair dismissal case would not be able to pursue its costs and further, that at conciliation, a ‘member of the Commission’ had told her that they believed her version of events and her case should be heard. Ms Hansen provided no details of these claims, let alone who it was who had given her such information or advice. We doubt that at conciliation, a conciliator, presumably who Ms Hansen believes was ‘a member of the Commission’, would have offered such views, but, in any event, the conciliator would have obviously dealt with the merits of her unfair dismissal claim, and not the much later s 399A application, the subject of the appeal.

[25] It will almost invariably be the case that an unrepresented litigant will be at a disadvantage when the opposing party is legally represented. However, it is not uncommon for an unrepresented party to overcome such disadvantage or unfamiliarity with the Commission’s processes and successfully prosecute their case. The choice made by a party to be legally represented in an unfair dismissal case is one case which is always open, subject to satisfying the tests of permission being granted for such representation set out at s 596 of the Act. It was inappropriate and unhelpful that Ms Hansen attacked Calvary’s choice to be legally represented, particularly given the complex and convoluted circumstances of this case brought about by Ms Hansen’s difficulties in focussing on the relevant issues to be determined by the Commission, including in the appeal before us.

[26] We sympathise with Ms Hansen’s personal and financial circumstances and we accept she is having difficulty obtaining alternative employment. However, those matters are not relevant to our determination of Calvary’s application for costs under ss 400A and 611 of the Act.

[27] Unfortunately, Ms Hansen provided a voluminous potpourri of the same prolix material she provided to the Commissioner at first instance, in her appeal and again in this costs application. The bulk of this material was discursive, disjointed and disconnected. Ms Hansen scribbled defensive (and sometimes offensive) notes on much of the material, particularly that which emanated from Calvary or its legal representatives. However, more significantly, the bulk of the material was simply irrelevant, or at best remotely relevant, to the issues to be determined by the Commission in each of the applications referred to above. For example, Ms Hansen included various correspondence concerning allegations of bullying she raised 13 years ago against staff at another hospital.

[28] At all times, her unrelenting focus was on running the merits of her unfair dismissal claim (as she believed them), despite the merits never having been the subject of any hearing before or decision by the Commission. Nothing said by the Commission or directed by it, would deflect her from that course. Her obsession was pervasive and all consuming. As we said at par 47 of the appeal decision;

‘[47] Throughout this appeal, the appellant has consistently maintained her view that Ms Barber is lying to protect herself. Her ongoing hostility and animosity towards Ms Barber and the respondent during this appeal, was palpable. It is obvious the appellant strongly disagrees with the Commissioner’s decision. She has an acute sense of persecution and grievance and an obsessive belief that there is a conspiracy between Ms Barber, the Hospital’s management and its lawyers to prevent the truth (as she perceives it) from being exposed in order to ruin her life, destroy her career and seriously harm her psychological and emotional health.’

We have little doubt that this unfocussed obsession has hampered her capacity to properly craft and prepare her case, sensibly articulate her grounds of appeal and put coherent arguments to why it was in the public interest for the Commission to grant permission to appeal. It is within this largely illusory context that the Commission is tasked to determine the costs application in respect to the appeal.

[29] We turn now to the application of the tests under s 611(2) of the Act to the present application.

[30] As we earlier observed, Ms Hansen has an absolute and unshakable belief in the merits of her case. She has gone to extraordinary and bizarre lengths to prove her innocence and demonstrate her conviction of the conspiracy between witnesses, Calvary management and their legal representatives to destroy her life and career, including undertaking a lie detector test and placing signs around Adelaide declaring her innocence. As the Commissioner noted, she rationalised her conduct in respect to breaching the consent orders by offering implausible and fanciful explanations for her behaviour.

[31] In our view, Mr Hansen’s behaviour and conduct was entirely motivated by her aim of proving her innocence and having her ‘day in court’. Although Ms Hansen was clearly aware of the Commissioner’s adverse findings against her and had the benefit of knowing Calvary’s arguments against her in respect of the appeal, she was not deterred one iota in her belief as to the merits of her case. Having lost the opportunity of having her ‘day in court’, and notwithstanding she was the architect of her own downfall, we do not consider that Ms Hansen believed, in her own mind, that an appeal against the s 399A decision, was without merit. However, the test is not the subjective views of Ms Hansen, but as was said by the Full Bench in Baker v Salva Resources:

“[10] 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; 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 or so lacking in merit or substance as to be not reasonably arguable.” (footnotes omitted)

[32] Bearing this in mind, we do not accept, on any objective analysis, that Ms Hansen’s pursuit of her appeal on the grounds set out in the Notice of Appeal could be viewed as having any reasonable prospects of success. Her appeal was so devoid of merit or substance as to not be reasonably arguable. We would add that from Ms Hansen’s own submissions (which barely dealt with the relevant considerations under s 399A of the Act), and with knowledge of Calvary’s case against her, it should have been reasonably apparent to Ms Hansen that her appeal had no reasonable prospects of success. It must follow that this finding enlivens the Commission’s discretion to award costs under s 611(2) of the Act. That said and given Ms Hansen’s personal circumstances and psychological state, we have earnestly considered whether there would be any utility in awarding costs against her. However, not to do so would result in an unjust outcome in respect to the time, cost and resources which Calvary has expended in defending an appeal that objectively had no real prospects of success. We are satisfied in all the circumstances of this case that it is appropriate to exercise our discretion to make an order for costs against Ms Hansen in relation to the appeal pursuant to s 611(2)(b) of the Act.

[33] Finally, we consider that the sum of $5,000 submitted by Calvary as its party-party costs in preparing and defending the appeal is not unreasonable and within the range of costs that might reasonably be expected to be incurred for a matter of this kind. Pursuant to s 611(2)(b) we will order Ms Hansen to pay the applicant, Calvary, an amount of $5,000. Given these conclusions, it is unnecessary to make any further findings under s 400A of the Act. A formal order will accompany the publication of this decision.

DEPUTY PRESIDENT

Final written submissions:

For the applicant (Calvary) 31 August 2016;

For the respondent (Ms Hansen) 30 September 2016

Printed by authority of the Commonwealth Government Printer

<Price code C, PR587482>