DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Joseph Costelloe
v
Origin Energy Resources Limited T/A Origin Energy
(U2016/13231)

Application for Costs by Respondent.

[1] Mr Joseph Costelloe made an application to the Fair Work Commission (Commission) seeking relief from unfair dismissal in relation to his employment with Origin Energy Resources Limited T/A Origin Energy (Origin Energy). Mr Costelloe resigned his employment on 2 December 2015. His application for relief from unfair dismissal was made on 2 November 2016.

[2] Origin Energy made objection to Mr Costelloe’s application on the grounds that it was filed outside the statutory time limit specified in s.394(2) of the Fair Work Act 2009 (FW Act). That objection was upheld and Mr Costelloe’s application was dismissed by Senior Deputy President Drake. Mr Costelloe successfully appealed that decision (the first Full Bench).

[3] Mr Costelloe’s application for an extension of time was subsequently heard by me and on 8 August 2017 I did not grant an extension of time, and consequently dismissed his unfair dismissal application (the August decision). Mr Costelloe appealed that decision but permission to appeal was not granted.

[4] On 22 August 2017 Origin Energy made an application for costs against Mr Costelloe. The determination of that matter was held in abeyance pending the determination of Mr Costelloe’s appeal.

[5] On 30 and 31 October 2017 respectively Mr Costelloe made applications to the Commission to issue orders for production of documents and an order to a person to attend the Commission to give evidence in relation to the costs application. By decision on 15 November 2017 1 I rejected that application.

[6] The application for costs was heard on 22 November 2017. Following submissions by counsel for Origin Energy, Mr Costelloe was invited to address the Commission. Mr Costelloe spoke, uninterrupted, for some 10 minutes. Mr Costelloe’s submissions were generally well off the matter at issue in the hearing and, in the end, descended into foul language. Mr Costelloe left the courtroom in an angry and disrespectful manner. There was nothing of substance that Mr Costelloe put before the Commission to which Origin Energy needed to reply, that had not already addressed. It was unfortunate that Mr Costelloe did not use the time for his oral submissions to address the Commission on why the costs application should not be granted.

[7] Whilst I accept that Mr Costelloe has found it stressful in dealing with his application before the Commission, I would observe that he has been given substantial latitude and assistance by the Commission in an attempt to facilitate the hearing of his application and then the costs application.

Further submissions following the hearing

[8] On the evening of the day of the hearing, and the following day, Mr Costelloe sent further emails to the Commission containing arguments he had intended to make at the hearing. I forwarded these to the Origin Energy’s representative and invited any submissions it felt it needed to make in reply. Origin Energy did not object to acceptance of Mr Costelloe’s further written submissions and provided a further submission in response to the material received from Mr Costelloe.

[9] On 30 November 2017 correspondence was received in my chambers from a lawyer (Mr Tom Christie) who had apparently acted for Mr Costelloe in an unrelated matter. That correspondence respectfully sought to provide brief submissions on why costs should not be ordered against Mr Costelloe.

[10] I referred this correspondence to lawyers acting for Origin Energy and sought their views as to whether it should be admitted. They responded objecting to the admission of the correspondence for the following reasons:

•  The basis on which the “submission” was made was not clear. The lawyer signatory (Mr Christie) to the letter was not Mr Costelloe’s legal representative in the matter before the Commission and he was not a witness in the proceedings. Further, Mr Christie says that he has not had the “opportunity to thoroughly review the initiating Application, nor the Hearings to date”, he does “not have a detailed understanding of the matter”, and his views are based on what Mr Costelloe has told him about the matter. As a result, the matters raised by in the letter are of no probative value and are not relevant.

•  To the extent that Mr Christie seeks to make submissions regarding Mr Costelloe’s mental health, he provided no evidence of his qualification to do so, and provided no evidence supporting his statements.

•  The letter was provided after close of the hearing, and after Mr Costelloe had been given further opportunity to make written submissions via email. The Respondent should not be required to continue to respond to written submissions made well after close of proceedings. 

[11] Given Origin Energy’s objection to the correspondence I gave Mr Costelloe an opportunity to state why I should consider the correspondence. He said Mr Christie:

has immersed himself in my case for the previous 2 months and has had several discussions with the various medical practitioners that have treated me over the years…Contrary to what [Origin Energy] contends, he does know the circumstances of this matter and has been briefed on the hearing, the evidence, the testimony and has used this information and his extensive experience in dealings with both the QIRC and FWC to offer his position on the matter.

In summary, I respectfully request you take account of all information and submissions (including those of Tom Christie and Dr Larder’s medico-legal report) in this matter… 2

[12] The “medico-legal report” of Dr Larder (who was a witness in proceedings) referred to by Mr Christie is a letter dated 17 August 2017. The report appears to be in relation to Mr Costelloe’s workers’ compensation matter and its relevance to the determination of a costs application is not apparent.

[13] Despite the submissions made by Mr Costelloe, Mr Christie indicated in his letter that he had not had the “opportunity to thoroughly review the initiating Application, nor the Hearings to date” and that he does “not have a detailed understanding of the matter” but rather relied on Mr Costelloe’s advice to conclude that “the substantive matter does not readily appear as being particularly complex which would require the engagement of Counsel.” In any event Mr Christie’s submission that it was not “reasonably apparent to Mr Costelloe that the Application has no reasonable prospects of success” given his self-representation is not the relevant test (as further explored below).

[14] I have decided not to consider the correspondence sent by Mr Christie. Whilst permission is not required for a lawyer to make written submissions to the Commission on behalf of a party to a matter, this submission was made after the hearing was completed. Mr Costelloe had already provided further submissions after the hearing which Origin Energy had not objected to being accepted by the Commission. Permission was not sought by Mr Costelloe to make further submissions. Whilst I appreciate the general submissions made by Mr Christie ultimately they are of little probative value such that I should re-open submissions.

[15] Given the lack of apparent relevance I have not had regard to the “medico-legal report” of Dr Larder dated 30 August 2017 and provided to the Commission on 14 December 2017 by Mr Costelloe. Dr Larder was a witness in the substantive extension of time proceedings and his evidence was properly considered in that context.

[16] Whilst I appreciate the stress this matter has caused to Mr Costelloe, he has had ample opportunity to seek legal advice or further medical reports prior to the hearing of the costs application. Further, he had opportunity to seek to have the matter adjourned or seek an extension of time to make submissions. He has done none of these. For the reasons given I have not admitted the letter of Mr Christie or the further medical report of Dr Larder.

Legislative framework

[17] Origin Energy has made its costs application pursuant to s.400A and s.611 of the FW Act.

[18] Section 400A of the FW Act states:

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.

[19] Section 611 of the FW Act states:

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).

[20] Origin Energy make their costs application pursuant to s.611(2)(b) and s.400A of the FW Act.

Jurisdictional objection

[21] On 16 October 2017 Mr Costelloe sent an email to my chambers in which he claimed the Commission had no jurisdiction to hear the costs application because:

1. The jurisdictional objection to his request for an extension of time was refused by the Commission so that it did not have jurisdiction to deal with the unfair dismissal application;

2. As the Commission found it did not have jurisdiction to deal with the unfair dismissal application it therefore does not have jurisdiction to deal with the costs application; and

3. The conference/hearing of 5 and 6 June 2017 to deal with contested facts did not, in fact, deal with contested facts. There is therefore no grounds to hear the costs application.

[22] I determined that I would deal with the jurisdictional objection of Mr Costelloe at the same time as I heard the costs application.

Submissions

Origin Energy’s submissions

[23] Origin Energy has made an application for costs against Mr Costelloe pursuant to s.400A and s.611 of the FW Act on the grounds that he:

1. Caused Origin Energy to incur costs because of an unreasonable act or omission on his part (s.400A) and/or;

2. It should have been reasonable apparent to him that his application had no reasonable prospects of success (s.611(2)(b)).

Unreasonable act or omission

[24] On 29 May 2017 Origin Energy wrote to Mr Costelloe and outlined flaws it saw in the submissions he had filed on 26 May 2017 with respect to his application for an extension of time. It says that it explained to Mr Costelloe how and why his application did not have any reasonable prospect of success. It put Mr Costelloe on notice at that point that it would seek costs should he pursue his application and not be successful.

[25] Origin Energy says that on the day following its letter to Mr Costelloe he sent a one-word response by email that read “Really?”. It says that this response indicates “no sound reason or judgement behind his decision to continue” with the application a “cavalier attitude towards the proceedings” and/or a “wilful, reckless abandon of sense.”

[26] Origin Energy says that Mr Costelloe’s failure to discontinue proceedings after it wrote to him on 29 May 2017 was an unreasonable act or omission on his part that caused it to incur costs.

[27] Further, Origin Energy says that Mr Costelloe did not address, in his further written or oral submissions or evidence before the Commission, the issues it had identified in its letter.

[28] Origin Energy says that Mr Costelloe’s failure to withdraw his application on the evening of 5 June 2017 following receipt of evidence from Dr Coha, Dr Schouten (his treating doctors) and Ms Melanie Thorley (a lawyer consulted by Mr Costelloe) was an unreasonable act or omission by him that caused it to incur costs. That evidence, Origin Energy submits, is that:

1. Mr Costelloe was advised by Ms Thorley with respect to constructive dismissal on 29 October 2015;

2. Mr Costelloe ceased instructing Ms Thorley to act for him on 12 November 2015, prior to his resignation; and

3. Mr Costelloe was not so incapacitated by his medical condition that he could not instruct lawyers to, or file himself, an application for unfair dismissal at least up until February 2016.

[29] Origin Energy says it gave Mr Costelloe the opportunity at the conclusion of the first day of hearing on 5 June 2017 to withdraw his application and indicated that if he did so it would not seek costs. Further, it gave him some two hours to consider the offer. Mr Costelloe’s immediate rejection of the offer was an unreasonable act or omission by him in that it was “not guided by good sense” nor based on sound judgement.

[30] Origin Energy further says that Mr Costelloe’s failure to discontinue proceedings after his own evidence on 6 June 2017, when he admitted he could have made his application in the period between his resignation on 2 December 2015 and February 2016, was an unreasonable act or omission that caused it to incur costs. It says that the failure of Mr Costelloe to discontinue proceedings was “not guided by reason or good sense” nor was it “based on or in accordance with reason or sound judgement”.

No reasonable prospect of success

[31] Origin Energy submits that the assessment of whether an application is without reasonable prospect of success is to be determined “on an objective basis taking into account all of the relevant facts”. To this end, it says it is not relevant what Mr Costelloe subjectively believed.

[32] Origin Energy says that the submissions put by Mr Costelloe in his application for an extension of time did not constitute exceptional circumstances on an objective analysis:

•  Mr Costelloe admitted he was aware of the 21 day time limit for making an application;

•  The medical evidence supported that he was not medically incapacitated in the 21 day period and until February 2016;

•  Mr Costelloe had not instructed a lawyer to make an application and they failed to do so, nor did his legal advisor tell him he could not make an application for unfair dismissal;

•  Mr Costelloe’s evidence that he was not aware of his dismissal until October 2016 misconceived the operation of s.394(3)(b) of the FW Act;

•  Mr Costelloe’s submission that he had disputed his dismissal by his actions prior to his resignation by lodging a workers’ compensation claim misconceives the purpose of s.394(3)(c);

[33] Origin Energy submits that, for these reasons, the Commission can be satisfied that it should have been reasonably apparent to Mr Costelloe at the time he made his application that it had no reasonable prospect of success.

Mr Costelloe’s jurisdictional objection

[34] Origin Energy submits that Mr Costelloe’s jurisdictional objection must fail as he misunderstands both the nature of the proceedings to date and the basis of the costs application.

[35] Origin Energy says that Mr Costelloe made an application for relief from unfair dismissal pursuant to s.394 of the FW Act. Section 394 is found in Part 3-2 of the FW Act. Section 400A allows costs application to be made in relation to “a matter arising under this part”. “This part” is clearly a reference to Part 3-2 of the FW Act in which s.394 is found.

[36] Further, s.611 allows a costs application to be made in relation to “an application to the FWC”. Mr Costelloe made an application to FWC for relief from unfair dismissal and in doing so he enlivened s.611 of the FW Act.

[37] In respect to Mr Costelloe’s alternative argument that the hearing of 5 and 6 June 2017 did not deal with contested facts, Origin Energy says the Full Bench determined that a hearing was required with respect to Mr Costelloe’s application for an extension of time and this is what occurred before the Commission on 5 and 6 June 2017.

Disposition

[38] For the reasons outlined above, Origin Energy submits that costs should be ordered against Mr Costelloe. It seeks costs from 7.00pm on 5 June 2017, although it maintains that Mr Costelloe’s unreasonable acts or omissions occurred before that date, such that he should have understood prior to that date that his application had no reasonable chance of succeeding.

Costelloe’s submissions

[39] Mr Costelloe makes the following submissions, in addition to his submissions on jurisdiction outlined above.

[40] At a broad level, Mr Costelloe says that he should not be held to account for Origin Energy’s legal expenses in circumstances where it voluntarily chose to engage lawyers and where he has remained unrepresented.

[41] Mr Costelloe says that he had reasonable cause to bring his application, and that the nature of the delay in making his application was explained in his application as a combination of mental stress and inappropriate legal advice.

[42] Mr Costelloe says he did not engage in any unreasonable acts or omissions and that he conducted his case in good faith. In support of this Mr Costelloe submits:

•  that he is not trained as a lawyer and it is reasonable, without such training, to believe he had reasonable grounds to succeed in his application for an extension of time and that it was “reasonably apparent that his application” would succeed;

•  The whole process was very stressful;

•  There was combination of factors that led to the delay in making his application including

•  Ill-judged legal advice

•  Inability to clearly communicate due to aggravation of a “serious psychological injury” diagnosed in early November 2015;

•  Effect of actions by his employer and Workers’ Compensation regulator;

•  Pursuing lost wages and entitlements through mediation with the Fair Work Ombudsman;

•  His admission that he could have completed a Form F2 (application for unfair dismissal remedy) in December 2015 is irrelevant;

•  He never admitted in evidence that he was aware of the connection between constructive dismissal and unfair dismissal;

•  He was never provided with advice on completing unfair dismissal forms in October 2015 by Ms Thorley;

•  If he had been aware of remedies for constructive dismissal in October 2015 it makes no sense that he did not act on that knowledge;

•  He was following directions issued first by Deputy President Drake, then by the Full Bench and then by Commissioner Bissett and that if he had not complied with those directions his application may have been dismissed;

•  Section 397 of the FW Act mandates that a hearing must be held where there are contested facts;

•  That he did not withdraw his application on receipt of the letter of 29 May 2017 from lawyers for Origin Energy is an irrelevant consideration when they only seek costs from 7.00pm on 5 June 2017; and

•  That he did not withdraw his application after the evidence of Ms Thorley was justifiable as he considered that his phone records would disprove her evidence.

[43] In his correspondence following the hearing Mr Costelloe further submits that:

•  Origin Energy provided “no plausible motivation” for his delay in making his application for unfair dismissal if he did, in fact, understand that his employment had been terminated in December 2015;

•  The lawyers for Origin Energy suggested at the end of the hearing on 6 June 2017 that written submissions should be filed, hence causing costs to be incurred by Origin Energy that he, Mr Costelloe, should not be responsible for; and

•  The Commissioner made findings based on contested facts and it is unreasonable to suggest that he should have known what those findings would be.

Authorities

Relevant authorities – s.400A

[44] In Construction, Forestry, Mining and Energy Union v Clarke 3 the Full Court of the Federal Court considered an application for costs pursuant to s.824 (1)-(2) of the Workplace Relations Act 1996. Section 824(2) provides that the court may award costs if it was satisfied that a party “by an unreasonable act or omission” had caused another party to incur costs. In considering the provisions of s.824(2) the Full Court said:

28. The first criterion is that one party must have engaged in “an unreasonable act or omission”…[W]hether a party has conducted itself or its litigation in such a way as to cross this threshold will depend on the particular circumstances of the case. The second criterion is that the act or omission of one party must have “caused another party to the proceeding to incur costs in connection with the proceeding”. Once both criteria are satisfied, then the Court “may” in its discretion order the party which has engaged in the unreasonable act or omission to pay some or all of the costs of the other party.

29. In our view, the respondent has not engaged in “an unreasonable act or omission”. As the authorities indicate, there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable…Simply because a party does not conduct its litigation in the most efficient way does not mean that the Court should exercise its discretion in s 824(2) of the WR Act to make a costs order.

[45] Whilst that decision was made with respect to provisions of the Workplace Relations Act 1996 it can be applied to s.400A of the FW Act which uses the same language and is in the same context of a costs application.

Relevant authorities – s.611(2)(b)

[46] The operation of s.611(2)(b) of the FW Act was considered by a Full Bench of the Commission in Baker v Salva Resources⁴ (Salva Resources). The Full Bench found:

[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;⁵ 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 groundless⁶ or so lacking in merit or substance as to be not reasonably arguable.⁷

[47] In Deane v Paper Australia Pty Ltd⁸ (Deane) the Full Bench of the Commission said:

[7] The expression “no reasonable prospect of success” also appears in ss.170CF(2)(d), 170CF(3)(b) and 170CF(4). Section 170CF(4) provides for the summary dismissal of an application for relief pursuant to s.170CE, by the issue of an appropriate certificate, if the Commission concludes that the application has no reasonable prospect of success. The construction of the expression in that context was considered by a Full Bench of the Commission in Wright v Australian Customs Service.⁹ In that case the Full Bench, drawing upon relevant authority relating to summary dismissal of proceedings in various jurisdictions, held that 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.

[8] Making due allowance for the caution which must attend the exercise of a discretion to summarily dismiss an application, it appears to us that the approach in Wright is one we should follow. In other words, unless, upon the facts apparent to the applicant at the time of instituting the appeal, the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available.

The August Decision

[48] In reaching a decision that exceptional circumstances did not exist such that an extension of time should be granted in the August decision, I concluded that there was no satisfactory reason for the totality of the delay in Mr Costelloe making his application for unfair dismissal (at [114) and that there were no exceptional circumstances such that an extension of time should be granted (at [144]).

[49] In reaching this conclusion it was necessary to assess the evidence before the Commission. Some of this from Ms Thorley and Mr Costelloe was in conflict. Ultimately I found Ms Thorley to be witness of credit (at [48]). Having reached this conclusion a number of findings of fact were made.

[50] I also concluded that there was nothing in the medical evidence that suggested Mr Costelloe was not able, for medical reasons, to make an application of unfair dismissal within time (at [95]) and that Mr Costelloe was not medically incapacitated for the total period of the delay in making his application and his “meticulous” research with respect to his workers’ compensation claim suggested he was able to undertake research, complete forms and engage with government agencies (at [113]). There was no conflict in the evidence before me as to Mr Costelloe’s medical state.

Consideration and finding – Jurisdiction

[51] I deal first with Mr Costelloe’s jurisdictional objection to the costs application.

[52] I am satisfied that I have the power to consider the application for costs and the jurisdictional objection of Mr Costelloe should be dismissed. I have reached this conclusion for the following reasons.

[53] Section 400A of the FW Act states in part that “FWC may make an order for costs against a party to a matter arising under this Part…” [underlining added].

[54] Section 400A is found in Part 3-2 of the FW Act. A “matter arsing under this Part” is therefore a reference to a matter arising under Part 3-2. Mr Costelloe’s application of relief from unfair dismissal was made pursuant to s.394 of the FW Act. Section 394 is found in Part 3-2 – that is, the same Part referred to in s.400A. Mr Costelloe’s application was therefore a “matter arising under this Part” and he is a party to the matter.

[55] For this reason, I am satisfied that I have jurisdiction to deal with an application for costs under s.400A of the FW Act.

[56] Section 611(2) of the FW Act states, in part, that “the FWC may order a person…to bear some or all of the costs of another person in relation to an application to the FWC…” [underlining added].

[57] The provisions of s.611(2) are therefore enlivened if an application has been made to the Commission. It is not dependent on the outcome of that application, just that an application has been made.

[58] On 2 November 2016 Mr Costelloe made an application to the Commission in that he filed an application seeking relief from unfair dismissal. The extension of time hearing arose from that application. That he made that application is enough to enliven the jurisdiction of the Commission to deal with a costs application pursuant to s.611 of the FW Act.

[59] At a more general level, Mr Costelloe suggests that the hearing on 5 and 6 June 2017 to deal with his application was required to deal with contested facts and it did not do so. A costs application therefore cannot be made.

[60] The first Full Bench which determined his appeal against the decision of Senior Deputy President Drake did so on the basis that the Senior Deputy President had failed to hold a hearing of his application for an extension of time (the application was dealt with “on the papers”) in circumstances where there were contested facts and where the FW Act requires that a hearing be held in such circumstances (s.397).

[61] The Full Bench remitted the application for an extension of time to me to deal with in accordance with the requirements of the FW Act. Submissions were subsequently sought from Mr Costelloe and Origin Energy and a hearing held on 5 and 6 June 2017. That I did not make substantive findings on all of the contested matters (for example the merits of the application 10) does not mean that a hearing was not held or that it did not deal with contested facts. The FW Act does not require that a substantive decision be made with respect to all contested facts, just that a hearing be held where there are contested facts. This is what occurred. Both parties made submissions on all matters relevant to a consideration of the application to extend time and all were properly considered in reaching my decision not to grant an extension of time.

[62] I am therefore not satisfied that there was not a hearing as required by the FW Act. Mr Costelloe’s contentions provide no jurisdictional bar to the Commission dealing with the costs application of Origin Energy.

Consideration and findings – s.400A

[63] The test under s.400A is different to that in s.611(2)(b). The question to be determined is if, through some unreasonable act or omission on the part of Mr Costelloe, he caused costs to be incurred by Origin Energy.

[64] Origin Energy raise specific points in time when they say it was unreasonable for Mr Costelloe not to have discontinued his application. These are: when they wrote to him on 29 May 2017; at the conclusion of the first day of hearing once Ms Thorley, Dr Coha and Dr Schouten had given evidence; and at the conclusion of the second day of hearing where Mr Costelloe conceded that he could have, but for what he claimed to be erroneous advice, made an application for unfair dismissal. Origin Energy submits that the failure to discontinue proceedings was an unreasonable act or omission on Mr Costelloe’s part.

[65] On 5 and 8 May 2017 Mr Costelloe filed his submissions in respect of the extension of time. On 26 May Origin Energy filed its reply and on 29 May 2017 Origin Energy’s lawyers sent a letter to Mr Costelloe in which it said:

On 26 May our client filed and served its submissions opposing your application. As set out in these submissions

•  Your reliance on an absence of legal advice in October and November 2015 is to say that you relied on nothing at all, and is not a reasonable basis for you to not seek legal advice about your resignation once it occurred;

•  That you had the capacity to prepare an appeal of your workers’ compensation claim during the 21-day statutory period for filing your Application means that you had the capacity to lodge your Application in that time, especially as you were aware of the 21-day statutory period for filing;

•  The medical evidence provided by you indicates that you were not so impaired that you were unable to file your Application during the 21-day statutory period or at a time prior to November 2016;

•  Your conduct after the 21-day statutory period for filing indicates that you were not so impaired that you could not file your Application at a time prior to November 2016;

•  On your own evidence, taken at its highest, there is no basis for your claim that you were constructively dismissed.

Given the above, our client has reasonably formed the view that your Application has no reasonable prospect of success and the filing of your Application, the continuation of your Application, your appeal against Deputy President Drake, and the continuation of the rehearing of your application for an extension of time before Commissioner Bissett are unreasonable acts by you causing our client to incur costs. 11

[66] The letter from Origin Energy’s lawyers indicated that it was putting Mr Costelloe on notice that it would seek costs against him and would rely on the letter for such an application.

[67] Mr Costelloe responded to this letter the next day by email in which he said “Really?”. 12

[68] Mr Costelloe continued with his application after receipt of this letter.

[69] I do not consider Mr Costelloe’s continuation of his application at this point an unreasonable act or omission on his part. Mr Costelloe had evidence and arguments (subsequently dismissed in the August Decision) on which he did rely, to explain the delay in making his application. That those were not successful is not the relevant consideration.

[70] Whilst I accept that Origin Energy, in its letter of 29 May 2017, put Mr Costelloe on notice in relation to some deficiencies in his application, I am not convinced that it fully explained the consequences as might be considered by the Commission in an application for an extension of time. In any event, Mr Costelloe believed and that he had the evidence (and witnesses to give that evidence) that could explain the delay in making his application. His application, to this extent, could not be considered to be misconceived.

[71] For this reason, I am not convinced that there was an unreasonable act or omission on Mr Costelloe’s part in not discontinuing his application in May 2017.

[72] On 5 June 2017 Ms Thorley gave evidence that she had provided advice to Mr Costelloe about unfair dismissal. She stated that she had walked him through the unfair dismissal form (it is not relevant that she used the plural “forms” when there is, in fact, only one form). This conversation was in the context of Mr Costelloe seeking information from her with respect to constructive dismissal. Ms Thorely gave evidence and produced documents that indicated she had given Mr Costelloe advice as to unfair dismissal, and also that, if he wished to pursue a general protections claim not involving dismissal he would need to remain employed. Whilst I ultimately found that Ms Thorley evidence was credible and I accepted it, Mr Costelloe, at this point, had not given his evidence. He was firmly of the view (and still remains so, despite my findings) that his phone records would be decisive in showing that he did not have the conversations claimed by Ms Thorley.

[73] To this extent it was not an unreasonable act or omission on Mr Costelloe’s part to continue his application beyond the 5 June 2017 to the next hearing date of 6 June 2017 when he would give his evidence.

[74] At the time of his evidence on 6 June 2017 when Mr Costelloe conceded that he was capable of making an application for unfair dismissal in the period November 2015 – February 2016 – that is within the 21 day period or soon thereafter following his resignation –he was well aware of the evidence of Ms Thorley. There is little doubt that it should have been apparent to Mr Costelloe at this point that his application had little chance of proceeding to a conclusion in which he would be successful.

[75] In these circumstances I am satisfied that Mr Costelloe continued with his application when he should have known it was not guaranteed of success but in circumstances where there was disputed evidence to be resolved. This does not make his application unsupportable. On the basis of the facts before the Commission on 6 June 2017 it was reasonable that he continued with his application and have findings made on the conflicting evidence.

[76] By the conclusion of the hearing on 6 June 2017 Mr Costelloe believed he had placed adequate evidence before the Commission, such that I would accept his evidence that the phone call Ms Thorley said had occurred, where she took him through his options, had, in fact, not happened. It was a contested matter on which a finding was required to be made.

[77] In this respect it is not possible to conclude that the continuation of his application beyond this point, or the refusal to withdraw his application at this point and prior to me making any substantive findings on the disputed issue, was an unreasonable act or omission on his part such that it would justify the award of costs pursuant to s.400A.

Consideration and finding – s.611(2)(b)

[78] Section 611(2)(b) provides that the Commission may award costs if it is satisfied that it should have been reasonably apparent to Mr Costelloe that his application had no reasonable prospect of success. The “test” time for when it should have been so apparent is not specified. The assessment of whether it should have been reasonably apparent is not one made only at the time the application was made. 13 If it was so restricted this could lead to an outcome where, on the production of overwhelming evidence contrary to the application made, a person could continue with an application with impunity. This would be a perverse outcome.

[79] As was said in Salva Resources 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 14 or so lacking in merit or substance as to be not reasonably arguable.15

[80] Just because Mr Costelloe was not successful in his application does not mean that his application was necessarily groundless, untenable or lacking in merit.

[81] Whilst the decision in Deane suggests that consideration of whether an application has no reasonable prospect of success needs to be determined from the “facts apparent to the applicant” at the time of making the application, 16 given my view that this assessment should be on-going it is also relevant to make such an assessment at least at the point in time when all of the evidence had been admitted. This is relevant in this case where, after the conclusion of the evidence, the parties consented to the making of written submissions following receipt of the transcript of proceedings and hence further costs were incurred.

[82] Certainly the facts apparent to Mr Costelloe at the time of making his application, objectively considered, do not suggest that his application had no reasonable prospects of success. The facts, apparent to him at that time included that he had been misled by lawyers and that he was mentally unwell. On any objective assessment these facts may well ground a finding that exceptional circumstances existed such that an extension of time might be granted. That these “facts” as understood by Mr Costelloe were ultimately found not to hold is not the correct assessment.

[83] Mr Costelloe had (and maintains) a view that Ms Thorley (or other lawyers he consulted) and/or his mental health were to blame for his failure to make his application within time, and that these presented exceptional circumstances such that an extension of time should be granted. None of his reasons withstood an assessment of whether they fully explained the reason for the delay, let alone whether they, along with other factors, evidenced exceptional circumstances.

[84] At the conclusion of the evidence on 6 June 2017 the “facts” that should have been apparent to Mr Costelloe included a conflict in relation to his conversation with Ms Thorley. Ms Thorley gave evidence that certain conversations occurred. Mr Costelloe disputed one of these in particular where Ms Thorley said there was a discussion of constructive dismissal with Mr Costelloe and that she had taken him through the unfair dismissal forms on a phone call. Mr Costelloe had produced his phone records to show the conversation did not take place. This conflict in the evidence would need to be resolved before any findings in relation to the extension of time could be made. The resolution of this factual dispute required a finding as to the credibility of the respective witnesses. Ultimately this finding was not in favour of Mr Costelloe.

[85] However, the totality of the facts as known to Mr Costelloe at this stage was not limited to the factual dispute as to his discussion with Ms Thorley. It was clearly established without dispute that:

● Mr Costelloe did not seek any advice from Ms Thorley as to what his options were after his resignation (at [51]);
● On 30 November 2015 (after he had put in his notice of resignation but prior to it taking effect) Mr Costelloe advised his GP that he had resigned and was feeling less stressed (at [58]);
● On 11 November 2015, on the basis of the evidence of Dr Schouten, his treating psychiatrist, Mr Costelloe would have been able to communicate matters of a legal nature consistent with that of a lay person and that he was functioning well outside work (at [60]);
● Dr Schouten reported that on 9 February 2016 Mr Costelloe was settled, appropriate and euthymic, had reported minimal mood and anxiety symptoms (at [61]);
● Mr Costelloe, on his own evidence, said he was in better mental health from December 2015 to February 2016 (at [111]);
● There was nothing in the medical evidence that suggested Mr Costelloe was not able, for medical reasons, to make an application of unfair dismissal within time (at [95]);
● Ms McNee (Mr Costelloe’s wife) said that Mr Costelloe was aware of constructive dismissal as a concept before he resigned and they had spoken of it (at [71]);
● Mr Costelloe raised the issue of constructive dismissal with Ms Thorley prior to his resignation and the term “forced resignation” was used at this time (at [46]);
● Mr Costelloe’s efforts on his workers’ compensation claim suggested he was capable of undertaking extensive research (at [100]) and that he self-confessed “obsession” with his workers’ compensation claim did not explain the delay (at [102]);
● Mr Costelloe agreed he was functioning at a level where he could have made an application within the 21 day time limit (transcript PN1532);

[86] The dispute over part of the evidence does not, in this case, outweigh the entirety of the remaining undisputed evidence in the application for an extension of time. Even if the dispute with respect to whether Ms Thorley’s evidence was found in Mr Costelloe’s favour, the totality of the facts as known to Mr Costelloe at the conclusion of the evidence on 6 June 2017, objectively considered, should have made it reasonably apparent to him that his application was groundless. The facts showed that he had failed to explain the totality of the delay in making his application even though he had explained some of the delay.

[87] In reaching this conclusion I have not ignored the other matters that the Commission must take into account in determining if exceptional circumstances exist such that an extension of time should be granted. In the scheme of this case however, given the extensive delay in making the application, the reason for the delay was a critical issue to the final decision.

[88] In reaching my conclusion I have taken into account the caution in Deane that a decision that an application “had no reasonable prospect of success should only be reached with extreme caution”. That it should have been apparent that an application had no reasonable prospect of success is a high bar. Unless the application is so clearly untenable it is difficult to find that the test in s.611(2)(b) has been met.

[89] In this case Mr Costelloe had the opportunity, after the conclusion of the hearing on 6 June 2017, to consider the transcript of proceedings prior to making written submissions. He was on notice that Origin Energy did not consider his application had any reasonable prospect of success and he stated that he was aware of the costs provisions of the FW Act and their implications. He also had the opportunity to further consider, in particular, Ms Thorley’s evidence and consider the basis for the offer made by Origin Energy on 5 June 2017. In all of these circumstances Mr Costelloe determined to continue to press his application.

[90] I am not satisfied, objectively determined, that it should have been reasonably apparent to Mr Costelloe at the time he made his application that his application had no reasonable prospects of success.

[91] I am however satisfied that, at the conclusion of the evidence or at least once he had access to the transcript and prior to final written submissions, it should have been reasonably apparent to Mr Costelloe that his application had no reasonable prospect of success.

Should I award costs?

[92] Having found that it should have been reasonably apparent to Mr Costelloe that his application had no reasonable prospect of success it is a discretionary decision of the Commission as to whether costs should be awarded. Should I decide to award costs, it would seem reasonable that, it should only be those costs incurred after 6 June 2017 that should be considered.

[93] Section 611(1) of the FW Act states that parties to matters before the Commission should bear their own costs in relation to that matter. The exception to this is in s.611(2). The requirement of s.611(1) has factored heavily in my decision.

[94] Mr Costelloe suggests that costs were incurred because Origin Energy proposed to go to written submissions and he did no more than defer to the Commissioner’s judgement on the process. He therefore submits that it would be unfair to award costs against him as it was Origin Energy’s actions that caused the costs after 6 June 2017 to be incurred. On this I note that, even if the matter had proceeded to oral submissions, the proceedings would not have been completed on 6 June 2017. In such circumstances further costs would have likely been incurred in a further day of hearing and preparation of oral submissions by Origin Energy.

[95] Mr Costelloe has, on numerous occasions, said that he faces bankruptcy or he will lose his house, or words to that effect, if required to pay Origin Energy’s costs. Mr Costelloe has not provided the Commission of any evidence beyond mere assertions to that effect. Origin Energy highlighted this lack of evidence when I raised these claims of Mr Costelloe with them in the hearing of the costs application. Mr Costelloe chose not to further address the Commission on this matter.

[96] Origin Energy is a large organisation by any measure. Whilst I accept that there has been a cost to Origin Energy in running this case I can reasonably infer that it would be more able to absorb its costs than Mr Costelloe. It is also the case that it chose to take external legal assistance in circumstances where there was no indication Mr Costelloe would seek to do so.

[97] In this case however, given the display of obduracy by Mr Costelloe, I consider that he should be required to meet some, but not the totality of Origin Energy’s costs, from after 6 June 2017.

[98] I have decided, in all of the circumstances, that Mr Costelloe should meet the lessor of 10% or $3,000 of Origin Energy’s costs incurred after 6 June 2017, save for any costs associated with airfares or accommodation (although there should not be any after 6 June 2107). There was no obvious reason for Origin Energy to engage Melbourne based lawyers or brief Counsel based outside Brisbane. Therefore there is no reason Mr Costello should meet costs associated with the travel for those legal representatives to travel to Brisbane. Mr Costelloe’s application was made in the Brisbane FWC registry and there was no reason for any party to think it would be heard elsewhere.

Further submissions

[99] Prior to a final determination of the final amount of the order for costs I will require a more detailed schedule of costs from Origin Energy based on the Fair Work Regulations 2009 Schedule of Costs.

[100] Further directions will be issued in this regard.

COMMISSIONER

Appearances:

J. Costelloe on his own behalf.

R. O’Neill of counsel for Origin Energy Resources Limited T/A Origin Energy.

Hearing details:

2017.

Melbourne and Brisbane:

November 22.

Final written submissions:

Applicant: 22 November 2017 and 23 November 2017.

Respondent: 28 November 2017.

 1  End notes:

[2017] FWC 6002.

 2   Mr Costelloe email to Commission 14 December 2017.

 3   [2008] FCAFC 143.

4 (2011) 211 IR 374.

5 Wodonga Rural City Council v Lewis, PR956243, at para 6.

6 Deane v Paper Australia Pty Ltd, PR932454, at paras 7 and 8.

7 A Smith v Barwon Region Water Authority, [2009] AIRCFB 769, at para 48.

8 PR932454.

9 PR926115, 23 December 2002 at paras [23] – [27] and [32].

 10   Fair Work Act 2009, s.394(2)(e).

 11   Affidavit of Evan Mentiplay, annexure ERM5.

 12   Ibid ERM6.

 13   Sharn Stanley v QBE Management Services T/A QBE [2012] FWA 8397.

 14   Deane v Paper Australia Pty Ltd, PR932454, at paras 7 and 8.

 15   A Smith v Barwon Region Water Authority, [2009] AIRCFB 769, at para 48.

 16   Deane at [8].

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