Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2016] FWC 8491 of Commissioner Bissett at Melbourne on 25 November 2016 and Order PR589765 of Commissioner Bissett at Melbourne on 27 January 2017 in matter number U2016/7804.

[1] This is an appeal, for which permission to appeal is required, against a Decision 1 and Order2 of Commissioner Bissett. In her Decision, Commissioner Bissett found that Mr Garry Dircks, Ms Lindy Smith’s representative, had unreasonably omitted to produce Ms Smith’s employment contract and determined that Mr Dircks was liable for 50% of the costs of Ecolab on and from 25 August 2016. That Decision was made on 25 November 2016. As the appeal was not lodged until 17 February 2017, an extension of time for the appeal of the Decision needed to be granted if the appeal was to be considered.

[2] The appeal against the Order made on 27 January 2017 was properly before the Full Bench.

[3] At the hearing on 8 March 2017, Mr M. Addison, a legal practitioner, represented Mr Dircks and Mr T. Tissons, a legal practitioner, represented Ecolab. Given the complexity of the matter, and having regard to section 596 of the Act, permission was granted to both parties to be represented.

Background

[4] While Ecolab made an application for costs on a number of grounds, the only ground relevant for this appeal centred on whether Mr Dircks, by an unreasonable omission, caused Ecolab to incur costs.

[5] Ms Smith had been ordered to produce documents including any contracts of employment. That order was returnable on 12 August 2016. Prior to the compliance date, Mr Dircks sought an extension of time for compliance. At the mention in relation to this matter, Mr Dircks advised that Ms Smith did not have any contracts of employment or letters of offers of employment. 3 Commissioner Bissett found that the contract had been signed by Ms Smith on 3 August 2016 and there was no challenge to that finding in this appeal.4 Despite this, the document was not produced in compliance with the order.

[6] In its application for costs, Ecolab sought costs against both Ms Smith and Mr Dircks. Relevantly, in its application, Ecolab sought costs against Mr Dircks for engaging in an unreasonable omission in connection with the conduct or continuation of the matter, namely, the failure to produce Ms Smith’s contract of employment with Suez in response to the order to produce. In its submissions for costs, Ecolab contended that Mr Dircks knew or ought to have made enquires to discover that Ms Smith had signed an employment contract and was due to start work on 15 August 2016 on terms at least as favourable as her employment with Ecolab. 5

[7] In her decision, Commissioner Bissett had regard to the evidence and submissions of Mr Dircks. Commissioner Bissett accepted that Mr Dircks did not, at the relevant time, have a copy of the contract. 6

Extension of Time for the Appeal Against the Decision

[8] Rule 56(2) of the Fair Work Rules 2013 relevantly provides that a Notice of Appeal under section 604 must be filed within 21 calendar days after the date of the decision the subject of the appeal or within such further time allowed by the Commission on application by the Appellant.

[9] The usual principles applying to consideration of an application to extend time to lodge an appeal were summarised in the Full Bench decision in Jobs Australia v Eland  7 as follows (footnotes omitted):

“[5] Time limits of the kind in Rule 56 should not simply be extended as a matter of course. There are sound administrative and industrial reasons for setting a limit to the time for bringing an appeal and it should only be extended where there are good reasons for doing so. The authorities indicate that the following matters are relevant to the exercise of the Tribunal’s discretion under Rule 56(2)(c):

• whether there is a satisfactory reason for the delay;

• the length of the delay;

• the nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended; and

• any prejudice to the respondent if time were extended.”

The reason for the delay

[10] It was submitted that Mr Dircks delayed lodging an appeal against the Decision until he could assess the practical effect of the Decision. That assessment was delayed due to the time it took for the Order for costs to be finalised. Mr Dircks submitted that assessment would include a consideration of whether, given the amount that may have been ordered, it was financially justified to appeal. Had the costs been negligible or minor, then the costs of the appeal may have exceeded the amount of the costs ordered to be paid.

[11] Mr Dircks is an experienced practitioner who was aware of the time limits to lodge appeals.

[12] At the time of the Decision, Mr Dircks was aware of the amount of the costs claimed. Given the Decision and his failure to put on any material in opposition to the quantum of costs claimed, his explanation that he was awaiting the costs order before deciding to appeal is not a satisfactory explanation for the delay.

The length of the delay

[13] The appeal was due to be lodged by 16 December 2016 and was not lodged for another two months. This is not an inconsiderable delay.

The nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended

[14] This requires an assessment of whether the Appellant is likely to be granted permission to appeal and whether the appeal is likely to succeed.

[15] We summarise the grounds of appeal as follows:

1. The Commissioner erred in her findings about Mr Dircks’ conduct because he was entitled to rely on Ms Smith’s instructions, namely, that she had no employment at the relevant time.

2. The Commissioner denied Mr Dircks procedural fairness because the alleged conduct relied on by the Commissioner to make findings against Mr Dircks was not part of Ecolab’s claim and he was denied the opportunity to respond to the Commission’s findings.

3. The Commissioner erred when she found that the non-disclosure of the contract caused Ecolab to incur costs.

4. The Commissioner erred in criticising Mr Dircks for not providing a witness statement when he was not directed to.

5. The Commissioner erred in not holding a conference or hearing as there were contested facts.

6. The Commissioner failed to give adequate reasons.

[16] We now turn to consider each ground of appeal.

[17] In relation to the first ground of appeal, Commissioner Bissett considered Mr Dircks involvement in Ms Smith’s non-compliance and notes his advice that he “simply forwarded all the materials sent to me by the Applicant that she assumed needed to be supplied.” 8 Commissioner Bissett noted that Mr Dircks saw his position as one of “a passive player in that matter and all that went with it; that he was the mere courier of information.”9 She noted that as Ms Smith’s representative, he had an obligation to “provide her with appropriate and timely advice.”10 She found that he was required to do more than forward the notice to produce to his client so that she could respond to the order.11 She noted that Mr Dircks was an experienced practitioner in the Commission in the unfair dismissal practice area and that he was familiar with orders to produce. Commissioner Bissett found that Mr Dircks had “provided no cogent explanation of why he did not properly seek instructions from his client in this case.”12

[18] Commissioner Bissett noted at paragraph [90] of her Decision that “no submissions [were] made (or evidence given) by Mr Dircks as to what enquiries he made of Ms Smith as to the existence of any offer of employment or contract of employment that might exist such that the Order to Produce could have been complied with.” Commissioner Bissett found that Mr Dircks failed to make proper enquiries and that this was an unreasonable omission. Commissioner Bissett found that this conduct and Ms Smith’s conduct in failing to produce the contract of employment caused Ecolab to incur costs.

[19] We are not satisfied that Mr Dircks has identified any error in the approach of Commissioner Bissett.

[20] At paragraph 53 of his submissions, Mr Dircks put the following proposition:

“Where a client advises a representative that there is no employment offer, then the existence of an undisclosed document is an unknown …”

[21] Mr Dircks referred to a number of communications between himself and Deputy President Clancy about the notice to produce. There was no evidence that any of these documents were before Commissioner Bissett when she made her Decision.

[22] Mr Dircks, in his submissions, relied upon the decision of the Full Bench in G Dircks v JimRoy Pty Ltd, 13 which found that a representative is required to accept his client’s instructions. This is undoubtedly true; however, a client’s instructions are not given in a vacuum. We agree with Commissioner Bissett that a representative is not a mere conduit. The communications14 relied upon by Mr Dircks to support his proposition that he was acting on instruction do not assist him in this appeal as those documents do not disclose any evidence of any advice given by Mr Dircks to Ms Smith about the order and her obligations.

[23] We are not satisfied that Commissioner Bissett erred in determining that Mr Dircks had an obligation to do more than pass on information from the Commission to Ms Smith and vice versa.

[24] In relation to the second ground of appeal, as was clear from the submissions of Ecolab, Mr Dircks was on notice that Ecolab relied on the fact that he should have made enquires about the existence of the employment offer or contract. He had the opportunity to put on material that he provided advice to Ms Smith about what the order meant and what her obligations were and he did not do so. Accordingly, we are not satisfied that Mr Dircks was denied procedural fairness in this regard.

[25] In relation to the third ground of appeal, Ecolab had submitted that, had it known of the job offer, it would have renewed its offers of settlement. Mr Dircks submitted that Ms Smith may not necessarily have accepted such an offer. We do not agree with this submission. On 7 September 2016, Mr Dircks provided Ecolab with a copy of the contract of employment which advised that she had commenced employment on 15 August 2016. This caused Ecolab to put an offer of settlement on the same day which was accepted on the same day. It was not contested that Ecolab would have made an earlier offer to settle had it known that Ms Smith had accepted a position at a higher rate of pay. There was no evidence before Commissioner Bissett that, had that offer been made prior to 25 August 2016, that Ms Smith would not have accepted the offer. Ms Smith gave no evidence in opposition to the costs application. Therefore, we are not satisfied that Commissioner Bissett erred in finding that the conduct caused costs to be incurred from that date.

[26] In relation to the fourth ground of appeal, whilst Commissioner Bissett criticised Mr Dircks regarding his failure to address the evidence of Ms Gleeson, 15 this was not relevant to the decision to award costs as it was only relevant to the question of whether a settlement offer had unreasonably been refused. Her criticism that he produced no evidence or submissions about the steps he took to advise Ms Smith were legitimate. Thus, we are not satisfied that the Commissioner erred in this regard.

[27] In relation to the fifth ground of appeal, it was put that there was a disputed fact in the costs proceedings, namely, whether the contract was in the possession of Mr Dircks prior to 7 September 2016 and that Commissioner Bissett was obliged to conduct a hearing. We note that, at the time, Mr Dircks advised the Commission that “there is no serious factual dispute that would warrant a hearing.” 16 It was put that the parties cannot waive the Commission’s obligations under section 397 of the Act. We accept the proposition that parties cannot by consent waive the Commission’s obligation to conduct a hearing if there are disputed facts. We also accept that the fact of whether Mr Dircks actually had in his possession a copy of the contract at the relevant date was in dispute. However, we are not satisfied that it would be in the public interest to grant permission to appeal in relation to this ground, in circumstances where Mr Dircks expressly rejected the opportunity for a hearing, as Commissioner Bissett expressly found that Mr Dircks did not have the contract in his possession. Mr Dircks makes no complaint about this finding. He simply submitted that had there been a hearing, a matter unrelated to this disputed fact, namely, his failure to provide appropriate advice to his client, could have been discussed. Mr Dircks was clearly on notice that Ecolab relied on both its allegation that he had the contract and its allegation that he ought to have made enquires to discover the contract.17 He had an opportunity to respond to both allegations and failed to adequately respond to the second allegation.

[28] In relation to the sixth ground of appeal, it was submitted that there was no finding of fact that Mr Dircks’ omission caused costs to be incurred. We do not agree for the reasons set out above. We are satisfied that Commissioner Bissett provided adequate reasons for that finding.

[29] Thus, we are not satisfied that any of the matters raised by Mr Dircks justify the grant of permission to appeal in the public interest or otherwise.

Any prejudice to Ecolab

[30] There was no submission or any evidence of any prejudice to Ecolab if an extension of time were granted.

Extension of Time – Conclusion

[31] We are not satisfied that Mr Dircks has provided a satisfactory explanation for the delay in lodging the appeal. A lack of prejudice to Ecolab is not a sufficient reason to extend time for the appeal. Further, given our findings on the merits of the appeal, we are not satisfied that Mr Dircks’ appeal raises any public interest considerations.

[32] Accordingly, the application for an extension of time to lodge an appeal against the Decision is dismissed.

The Appeal Against the Order

[33] Mr Dircks relies on a number of grounds in his appeal against the Order. For the purpose of this appeal, we deal with one ground, namely, whether Mr Dircks was denied procedural fairness.

[34] In its application for costs, Ecolab provided a schedule of costs. It sought costs of $64,814.10 for costs incurred from 8 August 2016.

[35] Section 377A(2) provides that if an item is included in the prescribed schedule of costs, then any award of costs must not exceed the amount listed for the item in the schedule. Schedule 3.1 of the Fair Work Regulations prescribes a schedule of costs.

[36] In her Decision, Commissioner Bissett noted that she was not satisfied that “the itemised schedule of costs provided by Ecolab in the Form F6 submitted on 11 October 2016 properly particularised the costs (with reference to the Fair Work Regulations 2009) such that a proper assessment of these costs can be made.” 18

[37] Ecolab was directed to file an itemised schedule of costs, a description of work performed and the basis for costs sought. Commissioner Bissett advised that, following receipt of this information, relevant orders will be issued.

[38] On 13 December 2016, Ecolab provided an amended itemised schedule of costs. Its email noted that it had not provided the amended schedule to Ms Smith or Mr Dircks and noted that there had been no requirement that it be served. It further advised that Ecolab would prefer that the narrative of the work carried out not be disclosed to Ms Smith or Mr Dircks.

[39] The Commissioner’s Associate sought further information about the amended schedule and further asked why Ecolab did not want the detailed breakdown to be provided to Ms Smith and Mr Dircks. This email was not provided to Ms Smith or Mr Dircks.

[40] On 24 January 2017, a further revised schedule of costs was provided to the Commission but it was again not provided to Ms Smith or Mr Dircks. That correspondence advised that it no longer pressed that the schedule not be provided to Ms Smith or Mr Dircks. However the schedule was not provided. The Order was then made on 27 January 2017.

[41] One of the grounds of appeal relied upon by Mr Dircks was that he was denied procedural fairness as the critical document relied upon by Commissioner Bissett in determining the quantum of costs was not provided to him and he was not afforded an opportunity to make submissions as to the appropriateness of the costs order to made.

[42] We do not accept the submissions of Mr Dircks that he had a legitimate expectation that the costs would be taxed. There are no provisions in the Act or its rules or regulations for taxation of costs. Members of the Commission are required to adopt the procedures provided for in the Act and determine the quantum of costs. It may be desirable if the parties can reach an agreement on the quantum of costs, but if no such agreement can be reached or the member considers the quantum agreed to be inappropriate, then the Commission must determine the quantum of costs after providing the parties an opportunity to be heard. Whether this is done in a hearing, conference or on the papers is a matter for the member having regard to the Act.

[43] In this matter, while Mr Dircks did not make any submission on the quantum of costs sought in the original application, this does not mean he was not entitled as a matter of procedural fairness to be provided with a copy of the revised schedules and with an opportunity to make submissions.

[44] The issue of ex parte communications between a party to a proceeding with the Commission or its staff had been considered by the Full Bench in different circumstances. 19

[45] It cannot be suggested that the communications here were in relation to procedural, administrative or practical matters. The documents were a central consideration in Commissioner Bissett’s determination of the quantum of costs to be paid by Mr Dircks.

[46] Ecolab submitted that Mr Dircks was aware of the original schedule and did not comment on it. Further, that he knew a schedule was going to be provided and made no enquiries or application to be heard in relation to this. It was submitted Mr Dircks was not denied procedural fairness as he had ample opportunity to comment on the quantum of costs.

[47] We do not accept this submission. While we accept that Mr Dircks had an opportunity to comment on the original costs schedule, this was not the schedule used by Commissioner Bissett to make her decision. While it may have been prudent for Mr Dircks to have advised the Commissioner that he wished for a further opportunity to comment on any schedule provided by Ecolab, it was not unreasonable for him to assume, in accordance with normal practice, a copy would be served on him.

[48] We are satisfied that Commissioner Bissett erred in failing to ensure that Mr Dircks was provided with the documents she had regard to in making her decision on the quantum of costs and in failing to provide Mr Dircks with an opportunity to be heard in relation to the schedule of costs that formed the basis of her costs order.

[49] We are satisfied that a denial of procedural fairness raises issues of public importance.

[50] Accordingly, permission to appeal is granted.

[51] The appeal in relation to the Order made by Commissioner Bissett is upheld.

[52] The Order made by the Commissioner is quashed.

[53] The matter is referred to Commissioner Bissett to determine the matter in accordance with this Decision.

VICE PRESIDENT

Appearances:

M. Addison for the Appellant.

T. Tissons for the Respondent.

Hearing details:

2017.

Melbourne:

8 March.

 1   [2016] FWC 8491.

 2   PR589765.

 3   [2016] FWC 8491 at [13].

 4   Ibid at [45].

 5   AB 108.

 6   [2016] FWC 8491 at [90].

 7   [2014] FWCFB 4822.

 8   Ibid at [50].

 9   Ibid.

 10   Ibid.

 11   Ibid.

 12   Ibid.

 13   [2009] AIRCFB 679.

 14   AB 157-158.

 15   [2016] FWC 8491 at [60]-[69].

 16   Ibid at [25].

 17   AB 108 at [2].

 18   [2016] FWC 8491 at [96].

 19   United Voice v Broadspectrum (Australia) Pty Ltd [2017] FWCFB 871; Construction, Forestry, Mining and Energy Union v LCR Group Pty Ltd [2016] FWCFB 916; Holly v SMS Operations Pty Ltd [2011] FWAFB 6640

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