[2019] FWCFB 7644

The attached document replaces the document previously issued with the above code on 10 December 2019.

Correction to paragraph numbering from paragraph [109] to correct a missing paragraph number, correction to paragraph [61] to correct “6 October 2018” to “8 October 2018” and a correction is made to the citation at reference 93.

Callum Young

Associate to Deputy President Asbury

Dated 11 December 2019

Fair Work Act 2009
s.604 - Appeal of decisions

Ms Donnalyn Sharkey
v
Life Without Barriers
(C2019/4265)

Appeal against decision [2019] FWC 2287 of Deputy President Beaumont at Perth on 21 June 2019 in matter number U2018/11109.

BACKGROUND

[1] Ms Donnalyn Sharkey (Ms Sharkey/Appellant) and her representative Mr Patrick Mullally of Workclaims Australia, seek permission to appeal and appeal a decision 1 of Deputy President Beaumont issued on 14 June 2019. In that decision (the costs decision) the Deputy President decided to make an order under ss. 400A and 401(1A) of the Act that Ms Sharkey and her representative Mr Mullally pay the costs of Life Without Barriers (LWB) on an indemnity basis, in relation to an unfair dismissal application made by Ms Sharkey.2 The order in relation to costs was for the period from 17 December 2018 when LWB filed its material in support of the jurisdictional objection to 8 April 2019 when the costs application was heard. The costs were apportioned on the basis that Mr Mullally incurred 67% of the total costs and the Appellant 33%.

[2] While it is not clear from the Notice of Appeal that Mr Mullally is appealing the costs decision in his own right, this is clear from the submissions filed by the Appellant in the appeal. No issue was taken in relation to Mr Mullally’s standing as an appellant by LWB and we proceed on the basis that the appeal was instituted by both Ms Sharkey and Mr Mullally. The costs decision followed an earlier decision in which the Deputy President upheld a jurisdictional objection made by LWB to the Appellant’s unfair dismissal application (the unfair dismissal decision). 3 In the unfair dismissal decision the Deputy President found that the Appellant had not been dismissed and that she had voluntarily resigned her employment

[3] With reference to the numbering system adopted by the Appellant, the grounds of appeal can be summarised as follows. Ground A1 asserts significant errors of fact and law on the part of the Deputy President in concluding that Ms Sharkey committed an unreasonable act or omission within the meaning of s. 400A by failing to discontinue her application and that she knew or ought to have known that her application had no reasonable prospects of success at the time she was served with the materials filed by LWB on 17 December 2018 in support of its jurisdictional objection.

[4] Appeal ground A2 takes issue with the fact that notwithstanding that she did not award costs under s. 611 of the Act, the Deputy President extensively considered the operation of that section and stated that she would not have followed Full Bench Authority in the event that she determined to award costs under s. 611 of the Act. It is submitted in relation to this ground that the Deputy President’s conclusions about the operation of s. 611 were contrary to authority and likely infected the Deputy President’s reasoning with respect to the fact finding exercise she was required to undertake concerning s. 400A and s. 401(1A).

[5] Grounds B3, B4 and B5 relate to the conclusions the Deputy President reached in relation to the conduct of Mr Mullally under s. 401 of the Act to the effect that his conduct was unreasonable because he failed to advise the Appellant to discontinue her unfair dismissal application. Ground B3 alleges that the Deputy President made no findings of fact to ground her decision that Mr Mullally had committed an unreasonable act or omission for the purposes of s. 401(1A)(b). Ground B4 concerns a finding that a settlement offer made by Mr Mullally on 29 January 2019 was an unreasonable act and asserts that there was no basis for this conclusion. Ground B5 is advanced on the basis that notwithstanding that the Deputy President stated that it was not necessary for her to make a finding in relation to s. 401(1A)(a), she did find that Mr Mullally encouraged the Appellant to pursue her unfair dismissal application, and there was no evidence to support that finding.

[6] Ground C6 asserts the Deputy President erred in awarding indemnity costs to LWB in circumstances where LWB’s costs application did not seek costs on an indemnity basis. Ground C7 asserts that the Deputy President erred by admitting into evidence a document purporting to identify costs incurred by LWB with Ai Group, on the basis this document lacked provenance and was “self-serving” given that the LWB was required to demonstrate, as a threshold matter, that it had incurred any costs at all. Ground C8 relates to the Deputy President’s finding that LWB had in fact incurred costs in its representation through Ai Group. Ground C9 asserts that there was no basis made out by LWB for the Deputy President to draw an inference consistent with the rule in Jones v Dunkel because Mr Mullally and Ms Sharkey did not give evidence in the costs hearing.

PERMISSION TO APPEAL

[7] An appeal in relation to an unfair dismissal application is governed by the provisions of ss. 604 and 400 of the Act. Section 604 deals with appeals generally. These requirements are modified by s. 400 of the Act which provides that the Commission must not grant permission to appeal from a decision made by the Commission under Part 3-2 of the Act (unfair dismissal) unless it considers that it is in the public interest to do so (s. 400(1)). Further, s. 400(2) provides that an appeal from a decision arising under Part 3-2 can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact. The test under s. 400 has been characterised as stringent. 4 Sections 400A and s. 401 are found in Part 3-2 of the Act and we proceed on the basis that s. 400 applies to the present appeal.

[8] The application of the public interest test is a discretionary task involving a broad value judgment. 5 The public interest may be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.6

[9] The costs decision under appeal in the present case is a decision of a discretionary nature. The appeal is therefore required to be considered in accordance with the principles in House v R 7 as follows:

“It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the on the ground that a substantial wrong has in fact occurred.”

[10] A Full Bench of the Commission observed in Dafallah v Melbourne Health 8:

“Section 400(2) modifies the House v R principles by limiting any review based on mistake of fact to a significant error of fact. Section 400 clearly evinces an intention of the legislature that appeals in unfair dismissal matters are more limited than appeals with respect to other matters under the Act.” 9

[11] The Appellant submits that all of her grounds of appeal trigger the public interest test when considered against principles established by successive Full Benches of the Commission. The Appellant further submits the question of costs orders raises issues of importance and general application for those coming to the Fair Work Commission and for those who practice and advise in this area. It is also submitted that the costs decision manifests an injustice asserting that the Deputy President failed to make findings of fact as described in the appeal grounds. Further, it is asserted that the public interest is attracted because observations made by the Deputy President in relation to s. 611(2) of the Act (notwithstanding that she did not award costs on this basis) are disharmonious with previous Full Bench authority.

[12] We are satisfied that the public interest is attracted and that permission to appeal should be granted. The appeal raises important issues of general application in relation to the award of costs against parties and their representatives in unfair dismissal proceedings. To determine the appeal it is necessary to consider the costs decision in some detail.

THE COSTS DECISION

[13] The background to the costs application was set out at paragraphs [2] to [4] and [17] to [32] of the costs decision. That background includes reference to facts and related findings made in the unfair dismissal decision and can be summarised as follows. LWB is a provider of social services supporting clients who live in their own homes or in residential care homes including clients with a disability or mental illness. The Appellant worked in the role of Care Co-ordinator at a facility operated by LWB from 19 August 2013 until her resignation on 8 October 2019 which the Appellant contended was a forced resignation amounting to a constructive dismissal. The events which gave rise to the resignation and which were the basis upon which the Appellant contended that she had been constructively dismissed, included that she had been removed from an on-call roster resulting in a reduction to her income, variously quantified as $12,000 per annum or 20% of her total pay. The Appellant also contended that she was not consulted about the roster change and that other conduct engaged in by LWB managers had forced her to resign, including:

•  the removal of practices involving chemical or physical restraints to protect clients and LWB staff referred to as “restrictive practices”;

•  a lack of support when the Appellant was subjected to a “violent incident”;

•  a lack of support when the Appellant was treated for a cardiac incident;

•  removal of a vehicle from the facility where the Appellant was working.

[14] These matters were set out in an email complaint sent by the Appellant to the State Director of LWB on 4 September 2018. The costs decision records that the State Director of LWB Ms Burns offered the Appellant an opportunity to discuss her concerns with the Acting State Director Ms Meyers and that Ms Meyers sent an email to the Appellant on 5 September 2018 advising the Appellant that she was happy to meet with her to discuss her concerns and requesting that the Appellant advise whether she wished to participate in such a meeting.

[15] The Deputy President recorded in the costs decision that the Appellant took a period of personal leave commencing 6 September 2018 and remained on personal leave until her resignation on 9 October 2018. It is further recorded that during that period the Appellant did not respond to the correspondence from Ms Burns or Ms Myers and that during the unfair dismissal hearing the Appellant stated that she had not communicated with any LWB representative because she had been advised by her representative Mr Mullally not to do so. This was a matter that the Deputy President later put considerable emphasis on in reaching her conclusions about the conduct of the Appellant and Mr Mullally.

[16] We note that there are some irregularities with the costs application. The sections of the Act under which costs are sought are not clear in item 2.1 of the Form F6 Application for costs and the costs sought are not itemised as required. However the costs decision indicates that the Deputy President accepted that costs were sought by LWB against:

•  Ms Sharkey under s. 400A(1) and 611(2)(a) and (b) of the Act; and

•  Mr Mullally under s. 401(1A) of the Act.

[17] The questions to be determined in the costs application were set out by the Deputy President at paragraph [7] of the costs decision as follows:

“Jurisdictional pre-requisites

a) Did Ms Sharkey cause LWB to incur costs due to an unreasonable act or omission in connection with the conduct or continuation of the matter?

b) Did Ms Sharkey make the application vexatiously, or without reasonable cause?

c) Was it reasonably apparent to Ms Sharkey that her application had no reasonable prospects of success?

d) Did Mr Mullally encourage Ms Sharkey to start and/or continue the matter, and it should have been reasonably apparent that Ms Sharkey had no reasonable prospect of success in the matter?

e) Did Mr Mullally commit an unreasonable act and/or omission in connection with the conduct or continuation of the matter?

The appropriateness of an order

f) If one or more findings are made in the affirmative concerning the preceding questions then the Commission will determine whether the award of costs is appropriate in all the circumstances.

[18] In paragraphs [8] – [16] of the costs decision, the Deputy President summarised her conclusions. Firstly the Deputy President stated that she had determined pursuant to s. 400A that the Appellant did cause LWB to incur costs due to an unreasonable act in connection with the continuation of her application. The Deputy President then stated that she did not intend to grant costs pursuant to s. 611 of the Act and it was not necessary for her to consider the matters in that section, but that she intended to do so nonetheless. The Deputy President’s reasons for considering s. 611 of the Act, notwithstanding her acknowledgement that such consideration was unnecessary, were summarised at paragraph [9] of the costs decision as follows:

“In short, I am unable to follow the decision of Qantas Airways Limited v Mr Paul Carter, which appears to be the authority one has reference to when interpreting s 611(2)(b) of the Act. The decision of Qantas Airways Limited v Mr Paul Carter sets out that the point at which the Commission must determine whether an application had no real prospects of success, is when the application was made. However, I do not consider that the words of s 611(2)(b) are so limiting, such that they limit the ‘test’, for want of a better word, to the time of making the application. In Ms Sharkey’s case it should have been reasonably apparent to her that her application had no reasonable prospects of success when in receipt of LWB’s outline of submissions, witness statements and materials. It would be from this point that costs are to be awarded.” (Citations omitted).

[19] The Deputy President’s summary went on to state that pursuant to s. 401 of the Act she had determined that Mr Mullally committed an unreasonable act in connection with the matter by encouraging the Appellant to persist or continue with the proceedings when it should have been reasonably apparent that her application had no reasonable prospects of success. Critically for these conclusions, the Deputy President determined that it should have been reasonably apparent that Ms Sharkey’s unfair dismissal application had no reasonable prospects of success on 17 December 2018, when LWB filed its outline of submissions and witness statements in support of its jurisdictional objection.

[20] The Deputy President also stated that LWB would be awarded costs incurred by engaging Ai Group as its legal representative from 17 December 2018 up until the preparation of its costs application, which relevantly included the conduct of the costs arbitration on 8 April 2019. The Deputy President said that costs would be apportioned so that 67% would be paid by the Appellant’s legal representative and 33% by the Appellant and that it was appropriate that costs be awarded on an indemnity basis.

[21] The basis for the award of costs can be found in paragraphs [13] – [14] of the costs decision as follows:

“[13] In the decision at first instance, it was said that Ms Sharkey had acted on the advice of her solicitor (paid agent). The advice was misguided if she had not intended to bring her employment to an end, but rather assert she had been dismissed. Against that backdrop Mr Mullally and Ms Sharkey pressed on with the application, notwithstanding the receipt of LWB’s submissions, witness statements, and documentary material that unravelled the contentions Ms Sharkey was so reliant upon. On any objective basis, it was apparent that not only had Ms Sharkey’s ‘repudiatory’ argument faltered, but the negation of choice was going to be difficult, if not near futile, to press.

[14] The strategy adopted concerning the conduct and continuation of the case appeared to be one devised by Mr Mullally, and the apportionment reflects this. But, it is recognised Ms Sharkey was, at all times, free to exercise a choice to continue or discontinue her matter.”

[22] Two essential findings are apparent from these excerpts and the later findings set out in the costs decision. Firstly, the Deputy President concluded that the material filed by LWB on 17 December 2018 in support of its jurisdictional objection to the Appellant’s unfair dismissal application established a case that was so strong that a reasonable person would have withdrawn the unfair dismissal application. Secondly the Deputy President concluded that Mr Mullally was instrumental in the decision of the Appellant to continue with her application and had devised a strategy in this regard knowing that it was not reasonable to continue with the application. These are findings to which we will return.

[23] In the body of the costs decision, the Deputy President first turned to consider whether costs should be awarded against the Appellant under s. 400A. In doing so the Deputy President identified seven unreasonable acts alleged to have been engaged in by the Appellant and which LWB said caused it to incur significant costs, as follows:

1. Filing the initiating application when already on notice as to the unmeritorious nature of the claim by way of correspondence from LWB dated 28 October 2018;

2. Failing to discontinue the application subsequent to receiving LWB’s response on 6 October 2018;

3. Failing to discontinue the application subsequent to the conciliation held on 21 November 2018;

4. Failing to accept an offer of settlement from LWB dated 4 December 2018;

5. Failing to discontinue the application subsequent to receiving LWB’s outline of submissions and witness statements dated 17 December 2018;

6. Failing to discontinue the application subsequent to having received LWB’s submissions in reply dated 17 January 2019; and

7. Failing to discontinue the application before or during the proceedings on 1 February 2019.

[24] After considering case law in relation to s. 400A of the Act the Deputy President determined that the section concerns matters already instituted rather than whether a matter should have been instituted at all. 10 On that basis the Deputy President concluded that the initiation of the application was not an unreasonable act for the purposes of that section. In relation to the failure to discontinue the application after the receipt of LWB’s response, the Deputy President observed that although the response was comprehensive at the date it was received, the Appellant’s pursuit of her application at this stage was not unreasonable because the Appellant “had not been privy to the evidence LWB would adduce and was “not yet cognisant of the meticulous submissions it would provide that thwarted the lines of argument she would pursue”.11 The submissions of LWB in relation to the third unreasonable action were also rejected on the same grounds – that the outline of witness statements and submissions had not yet been filed.

[25] In relation to the failure to accept a settlement offer advanced by LWB on 4 December 2018, the Deputy President noted that the settlement offer made by LWB on 4 December 2018 was an amount of $5,400 which extended to the settlement of the unfair dismissal application and an application to a court for alleged underpayment of wages. The Appellant’s representative asserted that the underpayment claim was in the order of $4,000. The Deputy President noted that the Appellant declined the offer of $5,400 to settle all matters. The Deputy President also noted that the Appellant made a counter offer of $10,000 and stated an assumption that the Appellant’s representative Mr Mullally had seen fit to apportion $4,000 of the $10,000 settlement offer to the alleged underpayment of wages claim and the residual $6,000 to the unfair dismissal claim. The Deputy President went on to conclude that LWB’s offer of $5,400 seemed “manifestly reasonable” 12 notwithstanding the Deputy President made an earlier observation that she was not in a position to assess the relative strength of the underpayment of wages claim.

[26] After observing that when the Appellant made an offer to settle all matters for $10,000 she had not been served with LWB’s material, the Deputy President went on to make a number of critical findings about that material and the conduct of the Appellant and her representative Mr Mullally after they received it. The gravamen of those findings can be seen in paragraphs [72] – [76] of the Deputy President’s costs decision:

“[72] In the absence of LWB’s evidence and outline of submissions, an assessment of the relative strength of Ms Sharkey’s case in comparison to that of LWB, could have been considered, on any reasonable basis, a premature exercise, and one that may not have provided reliable guidance for the purpose determining whether to settle the matter.

[73] However, on receipt of LWB’s outline of submissions, witness statements, and documentary material, that all changed. Ms Sharkey had before her LWB’s case, presented in forensic fashion. Nothing was undisclosed. LWB’s narrative was laid bare, and it unravelled the contentions that Ms Sharkey was so reliant upon. On any objective basis, it was apparent that not only had Ms Sharkey’s ‘repudiatory’ argument faltered, but the negation of choice was going to be difficult, if not near futile, to press.

[74] In her submissions, Ms Sharkey suggested that the ‘factual disputes between parties cannot be resolved until hearing when the evidence is on oath and the witness statement are tested under cross examination’. That submission must be rejected in the circumstances of this matter. The evidence of Ms Hill, Ms Crawford and Ms Riordan was uncontroversial; the documents annexed to their witness statement providing a cogent account of the narrative LWB would rely upon.

[75] When settlement proposals are made, the context is inevitably one where sworn evidence has not yet been traversed. And yet, a party is called to evaluate the relative strengths of both its, and another’s case. The evaluation of relative prospects of success, as referred to in the decision of the Full Bench in Brazilian Butterfly, is simply an exercise where the possibility or likelihood of being successful with one’s case is considered.

[76] While at the time of receiving LWB’s outline of submissions and evidential material Ms Sharkey was not called to consider a settlement offer from LWB, the materials clearly placed her in the position where the evaluation of her case from a prospects of success perspective was conceivable, if not obligatory. And yet her dilatory response was to proffer a settlement offer over a month later on 29 January 2019 in the amount of $7500 to resolve all matters.”

[27] The Deputy President went on conclude that:

“[77] At [the unfair dismissal] hearing Mr Mullally elected to rely upon section 386(1)(b) of the Act and confirmed that Ms Sharkey no longer sought to rely upon the repudiatory conduct argument. An apt concession, as the gravamen of Ms Sharkey’s argument had been cast out. Ms Sharkey was left to contend that her resignation was brought about by her having no effective or real choice but to resign, because of the conduct of LWB. It was, however, Ms Sharkey who took personal leave from 6 September 2018 until 8 October 2018 and then resigned; all the while choosing not to communicate with LWB management about her grievances. This was despite the prompt invitation from LWB management to do so.

[78] When Ms Sharkey received LWB’s submissions and evidential materials on 17 December 2018, she did so against a backdrop of knowing that her silence during the period of 6 September 2018 through 8 October 2018 was a deliberate act on her behalf. She had, after all, conceded at the first instance hearing that she had followed the advice of her solicitor regarding her silence. On receipt of the materials from LWB on 17 December 2018, Ms Sharkey could not ‘simply disregard matters that should have been reasonably apparent’, to borrow the turn of phrase adopted in the decision of Kangan Batman TAFE. By then a reasonable person would have appreciated the failings of the repudiatory conduct argument and have appreciated that she faced insurmountable difficulties were she to press that there had been no real choice but to resign. …

[80] At the point of receiving LWB’s materials on 17 December 2018, Ms Sharkey’s failure to discontinue at this juncture was an unreasonable act as contemplated by s 400A of the Act. I am not satisfied that Exhibit A3 can be relied upon at this stage to determine the precise items of expenditure that could be covered by an order made. However, I am satisfied, in light of Ms Crawford’s evidence, that Exhibit A3 showed legal costs had been incurred.”

[28] The reliance on Exhibit 3 in the costs proceedings is one of the appeal grounds and a matter to which we will return. However it is sufficient to state that at this stage the Deputy President had found that the Appellant’s failure to discontinue the application after receiving LWB’s outline of submissions and witness statements on 17 December 2018 was an unreasonable act as contemplated by s. 400A and that legal costs had been incurred, albeit that those costs had not been adequately quantified so that the precise expenditure could be identified.

[29] The Deputy President then turned to consider whether costs should be awarded against the Appellant under s. 611(2)(b) of the Act, notwithstanding her earlier observation that it was not necessary to consider this matter in light of her consideration of whether costs should be awarded under s. 400A. The Deputy President considered a number of first instance decisions where Members of the Commission appear to have questioned whether costs can be awarded under s. 611(2)(b) of the Act for conduct of a party after an application has been made. 13 The following observation was made by the Deputy President about the submissions of the Appellant in relation to s. 611(2)(b) of the Act:

“[85] There were limited submissions made by Ms Sharkey with regard to the operation of s 611(2)(b) in respect of the circumstances of her case. While some principles were traversed, which were said to have emerged from authorities, no authorities were referenced. Further, it was proposed that ‘the test (in this case) is to be applied when the application is commenced’. A proposition which, as will be seen, appears both supported and unsupported by decisions within the Commission.”

[30] After considering the legislative framework of s. 611, the Deputy President observed that in Qantas Airways Limited v Mr Paul Carter 14 (Carter) a Full Bench of the Commission held that it was clear from the terms of s.611 that the point at which the Commission must determine whether or not an application was vexatious, without reasonable cause or had no reasonable prospects of success, was when the application was made. The Deputy President noted that this approach was followed in some subsequent decisions but had not been accepted without question. In this regard, the Deputy President referred to a number of decisions where individual members of the Commission have expressed views to the effect that while the reference point for s. 611(2)(a) is the point at which an application is made, s. 611(2)(b) is not so constrained.15 The Deputy President then asserted that “a paucity of detail regarding the interpretive steps taken is evident” in the reasoning of the Full Bench in Carter and after considering authorities in relation to various iterations of the legislative provisions in relation to costs concluded that:

“[127] Confronted by a Full Bench decision which adopts an interpretation of s 611(2)(b) which appears at odds with matters I am to take into account, and a policy approach of the Commission, where conformity with previous decisions relevant to the matter being determined is clearly desirable, a conflict arises. Nevertheless, there remains a binding obligation upon this Commission, not derived from policy, but the Act - that the Commission must perform its functions and exercise its powers in a manner that is fair and just. …

[129] Although on this occasion I have ordered costs under s 400A of the Act, were that section of no avail, I would find myself compelled to depart from the authority of Qantas. The objects of the Act, the obligation set out in s 577(a), the matters I am to take into account under s 578 of the Act, and the conclusion that the earlier decision in Qantas is wrong, while not exhaustive, are cogent and sufficient reasons for such departure. Appreciative of the factors of policy and the sound administration of justice, which make adherence with past decisions of this Commission desirable, I nevertheless hold the view that the departure from Qantas remains warranted.”

[31] The Deputy President then gave consideration to whether costs should be awarded against Mr Mullally under s. 401 of the Act. The analysis does not distinguish between conduct relevant to s. 401(1A)(a) and conduct relevant to s. 401(1A)(b). The Deputy President commenced her consideration by setting out the unreasonable acts said by LWB to have been committed by Mr Mullally as follows:

1. Encouraging the Appellant to refrain from communicating with LWB during the period of her personal leave and prior to her resignation;

2. Providing advice to the Appellant which was misguided and intended to bring about the end of the employment relationship so as to enliven the unfair dismissal regime, without merit;

3. Alleging LWB had repudiated the Appellant’s contract of employment within the resignation letter, application and his written submissions, only to withdraw that position at a late state in proceedings;

4. Asserting that the decision to remove the on-call allowance was made without consultation in contravention of the Award within the resignation letter, application and written submissions, only to fail to support this assertion with any cogent argument; and

5. Alleging that LWB had failed to consult with the Appellant even though LWB had no such obligation, and even if it did, could not consult due to the advice provided by Mr Mullally.

[32] It will be seen that those matters included encouragement which is dealt with in s. 401(1A)(a). In considering whether to award costs against Mr Mullally the Deputy President at [141] of the costs decision referred to “pointed observations I made in the decision at first instance [the unfair dismissal decision] with regard to Ms Sharkey’s course of action, and her representative’s involvement in the same.” Those observations found at [65] and [71] of the unfair dismissal decision are to the effect that Ms Sharkey engaged in a course of conduct by “ceasing communications” with LWB and doing so on the advice of Mr Mullally and includes the following in paragraph [71]:

“…What passed between Ms Sharkey and her Solicitor is unable to be confirmed on the evidence. However is (sic) such advice was given then one can only conclude that the advice was misguided and the action taken by Ms Sharkey was unwise if she had not intended to bring her employment to an end.”

[33] The Deputy President went on in the costs decision to observe that Mr Mullally made limited submissions in relation to his liability regarding costs and that both Mr Mullally and Ms Sharkey chose not to give evidence. In relation to this the Deputy President said:

“[144] The Respondent invited the Commission to draw a Jones v Dunkel inference because, in its submission, the Commission should be rightfully suspicious of Ms Sharkey’s refusal to give evidence or to call Mr Mullally to do the same – a step which would have been reasonable, logical and predictable in this matter.

[145] A breach of the rule in Jones v Dunkel may lead to the drawing of an adverse inference. The inference that may be drawn is ordinarily an inference that the uncalled evidence would not have helped the party's case: not an inference that the uncalled evidence would have been positively unfavourable to the party's case, or positively favourable to the opposing party's case. A breach of the rule in Jones v Dunkel may also result in a more ready acceptance of the opposing party's evidence on the fact in question.

[146] Section 591 provides that the Commission is not bound by the rules of evidence and procedure and, pursuant to s 590, the Commission ‘may inform itself in relation to any matter before it in such manner as it considers appropriate’. Further, s 577(a) provides that the Commission must perform its functions and exercise its powers in a manner that ‘is fair and just’. The ‘rule’ in Jones v Dunkel is said to be fundamentally concerned with issues of fairness, and therefore the Commission will give consideration to its application in an appropriate case.

[147] In the circumstances, and while noting that I am in a position to reliably find facts, draw conclusions from them, and determine issues, I nevertheless will draw the inference sought that the uncalled evidence would not have helped Mr Mullally’s case given that Mr Mullally provided no explanation for his or Ms Sharkey’s failure to give evidence. Particularly when one may have reasonably expected Mr Mullally to do so.”

[34] The following conclusions were then drawn with respect to Mr Mullally’s conduct for the purposes of awarding costs against him pursuant to s. 401(1A)(b) of the Act:

“[148] With regard to s 401(1A)(b), my findings are equivalent to those made with respect to Ms Sharkey and s 400A(1). However, it is important to acknowledge that while Mr Mullally did not profess to be a legal representative, he was a paid agent with extensive industrial relations experience. Understandably then, a higher standard applies when considering the actions taken, or not taken, by him.

[149] When LWB’s submissions and evidential materials were received on 17 December 2018, their receipt was against a backdrop of irrefutable evidence that Ms Sharkey had knowingly and deliberately maintained silence during the period of 6 September 2018 until 8 October 2018. It was Ms Sharkey’s own evidence that she had been advised to take that course and, it is more likely than not, that it was Mr Mullally who provided that advice. There was no evidence adduced to suggest otherwise, and Mr Mullally was abreast of what had occurred in the hearing at first instance, having been present for its duration. At no time did Mr Mullally confute the evidence of Ms Sharkey in this respect.

[150] As noted with regard to Ms Sharkey’s involvement, on receipt of the materials from LWB on 17 December 2018, Mr Mullally could not ‘simply disregard matters that should have been reasonably apparent’. By then, a reasonable person, particularly one with the training and experience of Mr Mullally, would have appreciated the failings of the repudiatory conduct argument and should have appreciated the insurmountable difficulties were Ms Sharkey to press that there had been no real choice but to resign; and yet, there was no notice of discontinuance received. Instead the dilatory response was to proffer a settlement offer, over a month later, on 29 January 2019 in the amount of $7500 to resolve all matters.

[151] At the point of receiving LWB’s materials on 17 December 2018, Mr Mullally’s failure to advise Ms Sharkey to discontinue at this juncture was an unreasonable act as contemplated by s 401(1A)(b) of the Act, as was the sending of his email proposing a further settlement offer a month later on 29 January 2019. This is particularly the case when, some two months prior, LWB had proposed an offer to settle the matter for $5400, which was rejected in the email Mr Mullally sent to LWB. There is no evidence before me to show that Mr Mullally gave advice to the contrary or took alternative action to that outlined, and I consider that I am permitted to infer that Mr Mullally’s untendered evidence would not have helped him in this respect.

[35] In relation to s. 401(1A)(a) the Deputy President said:

[152] In light of my findings regarding s 401(1A)(b), it is unnecessary for me to consider s 400(1A)(a). However, with regard to s 400(1A)(a), on the evidence before me, I am satisfied that Mr Mullally encouraged Ms Sharkey to persist with the proceedings at first instance, or rather, to continue with the matter, when it should have been reasonably apparent that Ms Sharkey had no reasonable prospect of success in the matter once the materials of 17 December 2018 had been received.”

SUBMISSIONS ON APPEAL

Appellant

[36] Mr Mullally dealt with appeal grounds A1 and B3 together in oral submissions before us on 8 August 2019. In essence, it was argued that:

(a) There was nothing in LWB’s 17 December 2018 material that was overwhelmingly favourable to LWB’s case. It raised a different perspective to that of the Appellant, but that is not uncommon in the unfair dismissal jurisdiction. 16

(b) The Deputy President granted permission for each party to be represented pursuant to s.596(2)(a) on the basis that permission would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. The grant of permission pursuant to s.596(2)(a) is seemingly at odds with a conclusion that LWB’s materials of 17 December 2018 were such that Ms Sharkey’s application was devoid of merit and if this was the case, permission should not have been granted. 17

(c) The Directions provided the Appellant with an opportunity to file and serve responsive material to LWB’s jurisdictional objection by noon on 3 January 2019 (and provided LWB with an opportunity to file and serve reply material by noon on 17 January 2019). The parties exercised these opportunities. 18

(d) In her witness statement, amongst other things, the Appellant explained her concerns that the removal of the on-call allowance after a period of approximately five years meant a reduction in her take home pay of around $12,000 per annum and this would have had a significant impact upon her financial wellbeing. 19

(e) The Appellant was entitled to have her case tested at the arbitration. 20

(f) The fact that the Appellant’s application was resolved against her does not mean that her action in continuing the application after 17 December 2018 constituted an unreasonable act or that Mr Mullally’s failure to advise the Appellant to discontinue her application was an unreasonable act. 21

(g) There were no findings of fact made in the Decision that support the conclusion reached that Mr Mullally failed to advise the Appellant to discontinue her application. 22

[37] In relation to appeal ground A2 Mr Mullally accepted that the part of the costs decision dealing with s. 611 of the Act could be viewed as obiter dicta, but maintained that given the analysis extended over some ten pages of the 30 page costs decision and the emphasis on this matter it is likely that the analysis coloured or infected the Deputy President’s conclusions in relation to s. 400A and s. 401. In relation to appeal ground B4 and the conclusion that the settlement offer sent by Mr Mullally to LWB on 29 January 2019 was an unreasonable act, Mr Mullally submitted that there are no findings of fact in the costs decision to support this conclusion and that the conclusion constitutes a significant error of fact. Mr Mullally also said that the settlement offer was made following a Mention before the Deputy President on 17 January 2019 in which the Deputy President encouraged the parties to confer and try to resolve the dispute. 23 In respect of the offer, Mr Mullally said:24

(a) The 29 January 2019 offer of $7,500 was substantially less than Ms Sharkey’s previous offer of $10,000 on 6 December 2018 to settle all matters between them;

(b) The settlement included a claim for approximately $4,000 in the Industrial Magistrates Court in Perth including a claim for imposition of penalties for breach of the Social Community, Home Care and Disability Services Industry Award (SCHCDS Award);

(c) The offer was made in the spirit of conciliation and as a gesture of goodwill;

(d) The offer represented approximately two weeks’ wages for Ms Sharkey; and

(e) The offer of $5,400 made by LWB two months’ prior was also to settle all matters between the parties and taking into account the quantum of the Court claim, LWB’s offer was less than one week’s wages to settle the unfair dismissal claim. It was not unreasonable for Ms Sharkey to reject that offer.

[38] In relation to appeal ground B5 and the finding that Mr Mullally encouraged Ms Sharkey to continue the matter when it should have been reasonably apparent as at 17 December 2018 that it had no reasonable prospect of success, Mr Mullally argued that: 25

(a) There was no finding of fact in the costs decision that Mr Mullally had encouraged Ms Sharkey in the manner alleged and no evidence upon which such a finding could be made; and

(b) The Order does not distinguish between s.401(1A)(a) or s.401(1A)(b) and the conclusion that Mr Mullally had encouraged Ms Sharkey pursuant to s.401(1A)(a) “was likely to have coloured [the Deputy President’s] approach to the whole of the application of s.401(1A).”

[39] Mr Mullally referred us to the decision of Barkhazen v Conair Australia Pty Ltd (No 2) 26 (Barkhazen) in which the Federal Court considered the question of costs orders against lawyers. Mr Mullally said that while the Court was dealing with issues under the Federal Court Rules, the principles are apposite and drew our attention to the following passage:

“[17] The relevant principles were helpfully summarised by Wigney J in Mitry Lawyers at [44] as follows:

1. Instituting or maintaining a proceeding on behalf of a client which has no, or substantially no, prospect of success will not, without more, invoke the jurisdiction to make a costs order against a lawyer.

2. Something which involves “unreasonable conduct” is required.

3. What constitutes unreasonable conduct will depend on the circumstances of the particular case.

4. The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success.

5. The circumstances must involve or result in a serious dereliction of duty owed to the court, or serious misconduct in promoting the course of, and the proper administration of, justice.

6. An ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless.

7. The reason that the mere pursuit of an unmeritorious case is not so sufficient to invoke the jurisdiction to make a costs order against a lawyer is that a party is entitled to have a practitioner act for him or her in an unmeritorious case. The court is concerned to avoid the risks of a practice developing whereby lawyers endeavour to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of personal costs orders being made against them.”

[40] In relation to appeal ground C6 it was submitted that indemnity costs should not be granted absent some unusual or special feature of a case. In support of this submission, Mr Mullally referred to the judgement of Woodward J in Australian Transport Insurance Pty Ltd 27 where it was observed in relation to allegations of fraud, that it is not sufficient to justify an award of indemnity costs where such allegations have not been sustained and that some further factor is required – for example the allegations have been made knowing they are false or have been irrelevant to the issues between the parties. His honour observed in that case that he was unable to say that the making of fraud and conspiracy allegations was improper given the facts as they must have appeared to the relevant party.

[41] In relation to appeal ground C7 it was submitted that without the wrongful admission into evidence of Exhibit A3 LWB would not have met its statutory onus to establish that LWB had incurred costs at all. The matter in Ground C8 was also said to involve a significant error of fact on the basis that the Ai Group is not a law firm and Mr McMahon appeared in the proceedings as of right under s. 596(4) of the Act. It was submitted that there was no evidence that legal costs had been incurred at all and that the approach by Ai Group in compiling the account underscores the error of law made by the Deputy President. Finally in relation to appeal ground C9 it is submitted that there was no basis for the Deputy President to apply the rule in Jones v Dunkel 28 on the basis set out by Windeyer J in that case that:

“No person is to be required to explain or contradict until enough has been provided to warrant a reasonable and just conclusion against him in the absence of explanation or contradiction.” 29

LWB

[42] In response to appeal ground A1 concerning the unreasonable act attributed to Ms Sharkey, Mr McMahon for LWB said that the Deputy President reached the correct conclusion when she determined that “at the point of receiving LWB’s materials on 17 December 2018, Ms Sharkey’s failure to discontinue at this juncture was an unreasonable act as contemplated by s 400A of the Act.” 30 Mr McMahon concurred with the findings of the Deputy President that LWB’s evidence was uncontroversial and clear,31 and that the material unravelled the contentions that the Appellant relied upon.32 Mr McMahon submitted that the Appellant’s unreasonable act caused LWB to incur costs.

[43] Mr McMahon also submitted that the Appellant was on notice following provision of a Calderbank 33 letter from LWB on 4 December 2018 that it was LWB’s intention to seek costs against her in the event that the matter continued to arbitration.34 In response to the Appellant’s submission concerning s.596 of the Act, Mr McMahon contended that it misconstrued the provision and that s.596 deals with the question of whether or not the right to representation should be granted rather than the strength of a party’s case.35 In response to questions from the Full Bench concerning the requirement that regard be had to the complexity of the case under s.596(2)(a), Mr McMahon said Mr Mullally’s application for permission to appear was not opposed by LWB.36

[44] In respect of appeal ground B3 regarding Mr Mullally, Mr McMahon said that the Deputy President reached the correct conclusion when she determined that “[A]t the point of receiving LWB’s materials on 17 December 2018, Mr Mullally’s failure to advise Ms Sharkey to discontinue at this juncture was an unreasonable act as contemplated by s.401(1A)(b) of the Act.” 37 In response to Mr Mullally’s submission that the Deputy President had made no findings of fact to ground this conclusion, Mr McMahon referred to the following paragraphs of the costs decision:

(a) At [10] of the costs decision, Mr Mullally encouraged Ms Sharkey to persist with the proceedings when it should have been reasonably apparent that Ms Sharkey’s application had no reasonable prospects of success.

(b) At [13] of the costs decision, Ms Sharkey acted on the misguided advice of Mr Mullally.

(c) At [14] of the costs decision, Mr Mullally had devised the strategy adopted by Ms Sharkey.

(d) At [78] of the costs decision, Mr Mullally advised Ms Sharkey to remain silent prior to her resignation.

(e) At [143] of the costs decision, Mr Mullally’s submissions with respect to his liability regarding costs were limited and neither he nor Ms Sharkey chose to give evidence.

(f) At [148] of the costs decision, Mr Mullally is to be held to a higher standing given his status as a legally trained paid agent with extensive experience. His failure to identify the unmeritorious nature of the application once in receipt of the 17 December 2018 material from LWB and failure to advise Ms Sharkey of that, was plainly unreasonable.

(g) At [147] of the costs decision, the Deputy President chose to draw the inference that the uncalled evidence of Mr Mullally and/or Ms Sharkey would not have helped Mr Mullally’s case given that no explanation was provided for the conspicuous absence.

[45] In respect of appeal ground B4, Mr McMahon said that the fact that Mr Mullally made an offer to LWB on behalf of the Appellant does not make it reasonable. Mr McMahon submitted that that given Ms Sharkey and Mr Mullally knew the application was futile on 17 December 2018, Mr Mullally’s conduct in making the 29 January 2019 settlement offer of $7,500, two months after LWB had made a settlement offer of $5,400, was an unreasonable act. He said the Deputy President did not err in reaching this conclusion. In the alternative Mr McMahon said that if the Full Bench was to consider that of itself, the 29 January 2019 settlement offer was not an unreasonable act, the issue is not fundamental because the primary root of Mr Mullally’s unreasonable action lies with his failure to appropriately advise his client and discontinue the matter in December 2018. 38

[46] In respect of appeal ground B5, Mr McMahon said that the Deputy President made her findings against Mr Mullally pursuant to s.401(1A)(b) of the Act 39 and any comments made by the Deputy President in relation to s.401(1A)(a) were obiter. Mr McMahon relied upon the judgement of the Full Court of the Federal Court in Maughan Thiem Auto Sales Pty Ltd v Cooper40 in support of LWB’s position that an appeal cannot properly be grounded by the consideration of s.401(1A)(a) in the costs decision in circumstances where the consideration in relation to this matter is not a decision of the Commission.41 With respect to appeal ground C6, LWB submits that there is no requirement in the Act that an application for costs indicate that costs are sought on an indemnity basis and that the Commission has a broad discretion to award costs on this basis. LWB also points to the fact that in oral submissions it sought the provision of indemnity costs and that it provided written submissions in this regard to which the Appellant had an opportunity to respond.

[47] It is submitted that appeal ground C6 misconstrues the Act and Regulations and that Regulation 3.08(3) provides that if the Commission considers it appropriate, a charge in Schedule 3.1 (which deals with costs) applicable to a solicitor is applicable to a person mentioned in s. 596 of the Act. On this basis the fact that LWB was represented by Ai Group does not preclude LWB incurring or seeking costs. In relation to appeal grounds C7 and C8, LWB submits that the Commission is not bound by the rules of evidence and in any event while the document purporting to set out costs incurred was admitted into evidence it was not relied upon by the Deputy President to determine the quantum of costs. It is also submitted that there was no inherent unfairness because the document had been filed by LWB with its submissions in reply, prior to the costs hearing. There was also evidence that LWB had engaged Ai Group and had incurred costs in this regard.

[48] It is submitted by LWB in relation to appeal ground C9 that the rule in Jones v Dunkel 42 operates where there is an unexplained failure by a party to give evidence and to call a witness. In light of the findings in the unfair dismissal application LWB invited the Commission to draw the inference because, in LWB’s submission, the Commission should be rightfully suspicious of Ms Sharkey’s refusal to give evidence or to call Mr Mullally to do the same – a step which would have been reasonable, logical and predictable in the matter. LWB submits that the Deputy President did not err in drawing the inference.

CONSIDERATION

The material filed by LWB on 17 December 2018

[49] Central to the Deputy President’s decision to award costs against the Appellant and Mr Mullally was a conclusion that the case advanced by LWB in its material filed on 17 December 2018 was so strong that continuation of the Appellant’s unfair dismissal application was unreasonable from the point in time the material was received. This conclusion founded the decision to award costs against the Appellant pursuant to s. 400. The material filed by LWB on 17 December 2018 is relevant to the following appeal grounds:

(a) Appeal ground A1 (with respect to Ms Sharkey’s failure to discontinue the application on 17 December 2018);

(b) Appeal ground A3 (with respect to Mr Mullally’s failure to advise Ms Sharkey to discontinue her application on 17 December 2018);

(c) Appeal ground B4 (with respect to the settlement offer sent by Mr Mullally to LWB on 29 January 2019);

(d) Appeal ground B5 (with respect to Mr Mullally’s action in encouraging Ms Sharkey to continue the matter within the meaning of s.400(1A)(a)).

[50] There is no specific appeal ground dealing with the Deputy President’s finding that Mr Mullally advised Ms Sharkey to maintain silence during the period of 6 September 2018 and 8 October 2018 although this matter is relevant to other grounds of appeal. 43 Given the centrality of the findings made by the Deputy President in relation to the material filed by LWB on 17 December 2018 to the decision to award costs against both the Appellant and Mr Mullally, it is necessary to consider that material in detail. Also, for reasons which will become clear, it is necessary to consider the state of the evidence when the costs decision was made.

[51] As we have previously noted, the Appellant’s unfair dismissal application asserted that she was forced to resign due to a course of conduct engaged in by LWB such that she could no longer tolerate the workplace. Directions for the hearing of the application required that LWB put on its case first on the basis that it objected to the application. On 17 December 2018, LWB filed and served an outline of submissions in respect of its jurisdictional objection and three witness statements from Clare Meyers (Regional Manager WA Disability and Aged Care), Kathryn Riordan (State Clinical Services Manager) and Sian Hill (Program Manager Disability and Aged Care). The evidence and material filed by LWB can be summarised as follows:

Evidence of Ms Meyers

[52] Ms Meyers is the Regional Manager WA Disability and Aged Care for LWB. In her witness statement, 44 Ms Meyers said in her witness statement filed on 17 December 2018 that she first became aware that Ms Sharkey had raised concerns in relation to her employment when she was provided with Ms Sharkey’s 4 September 2018 complaint email to Jennie Burns (State Director WA) (4 September Email). In the 4 September Email, Ms Sharkey said as follows:

“I am very upset writing this email Jennie, over the past two months I feel decisions are being made regarding Miami Lane that I am not being informed about the plans only receiving emails from Sian being told what is happening and the deadlines. There is no face to face contact to inform me. I feel I am no longer important and not part of the plan here. I feel that I am being pushed out. I have been a Coordinator the last five years at Miami Lane and have worked hard for the standards and training of staff and the care it gives to clients. I have just received an email from Sian this morning advising me that the on call is now being taken from me. I have done this the last five years and it is worth a monetary value of 12 thousand a year which is a fair amount to lose. Topics about the gate that leads to the kitchen being removed for example I was just told, there has been no discussion why it was installed, had it gone through panel etc?? Nothing I have done seems good enough, I am left feeling absolutely worthless Jennie and I have never felt this way in 26 yrs of Nursing.” 45

[53] Ms Meyers said that she responded to the 4 September Email on 5 September 2018 by email stating: “I would be happy to arrange a meeting to discuss your concerns with myself and Sian. Would you like to proceed with this option?” 46 According to Ms Meyers, Ms Sharkey did not provide a response to this email. Ms Meyers stated she intended to follow the matter up with Ms Sharkey on Monday 10 September 2018.

[54] According to Ms Meyers this did not occur because Ms Sharkey was unfit for duty from 10 September and ultimately resigned on 8 October 2018 without having returned to work. 47 Ms Meyers felt that she took all steps reasonably available to address Ms Sharkey’s 4 September Email but her absence from the workplace and resignation meant the issues could not be dealt with.48 Ms Meyers also said that: “it is reasonable practice not to contact a staff member who has gone on personal leave unless it is essential”. Ms Sharkey’s resignation letter also dated 8 October 2018 stated as follows:

“Dear Sian

Forced resignation from employment.

It is with great regret that I tender my resignation from your employment effective the 9^th October 2018, but feel compelled to do so because of the employer’s conduct towards me. The reasons for my resignation can be summarised as follows:

1. The decision to vary my contract of employment and remove me from being permanently on-call. This takes out of my salary about $12,000 per annum and is a significant percentage reduction in my take-home pay. It was done without any discussion or consultation and without my agreement or consent and therefore a breach of the Award;

2. Lack of involvement in or consultation regarding policies and practices at Miami Lane. Since July 2018 I have only had one face to face meeting with you and that was only a brief encounter as you showed the new clinical services manager through the centre;

3. The removal of the Captiva SUV from the centre in July. This was done without discussion or agreement and has a serious impact on our ability to service clients;

4. Your complete lack of support regarding a violent incident on or about the 30^th August this year when a client lunged at me aggressively and my staff had to push me into my office to protect me. The police were called. I left a voice mail message for you but did not receive any call back and no follow up as to my condition the only communication as via text regarding the clients and staff an hour after leaving you the voicemail;

5. The lack of follow up by you when I was taken to hospital from work by ambulance on 14^th August with suspected cardiac problems. There was no follow up from you when I returned to work;

6. The unilateral decision made by the new Clinical Services Manager and communicated by email of the 5^th September 2018 regarding restricted practices at Miami Lane. This was made without consultation or agreement with me as the effective Coordinator of the centre. These practices were introduced for health and safety reasons and were previously approved by a Clinical Panel. This manner and method of decision making is unacceptable and the consequences create an unacceptable level of risk to all of our health and safety at the centre;

7. The inability of the employer to deal with my written complaint regarding the general absence of proper communication with me from management.

Overall I feel that I have been bullied in the employment and cannot continue to work in such an environment without the risk of damage to my health.” 49

[55] Though not required, Ms Meyers said that she provided Ms Sharkey with a written response to her resignation letter. 50 In summary, Ms Meyers’ response stated:

(a) The on-call roster was not specified in a contract of employment so would not be considered a variation of the contract if it was to change over time. The move to a centralised on-call system was in keeping with best practice.

(b) LWB was non-compliant with “national and state requirements” and this required swift action to rectify. There was no requirement for consultation with staff when changes were being made to ensure compliance, service quality and duty of care.

(c) An alternative fleet vehicle remained available at Miami Lane following the relocation of the Holden Captiva.

(d) Ms Sharkey’s allegation concerning a complete lack of support regarding a violent incident on 30 August 2018 was not supported by the text message exchange between Ms Sharkey and Ms Hill. At no time did Ms Sharkey indicate or request the need for additional support. The incident report did not include reference to potential or actual harm to staff.

(e) Ms Hill was not made aware of the extent of Ms Sharkey’s personal illness until 25 September 2018. Ms Hill contacted Ms Sharkey on that day but Ms Sharkey did not reply.

(f) The review of restrictive practices at LWB was not specific to Miami Lane. The purpose of the review as to ensure that all restrictive practices were formally assessed and approved.

(g) Ms Meyers provided a response to Ms Sharkey’s 4 September 2018 complaint email to Ms Burns by inviting her to attend a meeting to discuss the matters, but no response was received from Ms Sharkey.

(h) There is no evidence of bullying or harassment involving Ms Sharkey.

Evidence of Ms Riordan

[56] Ms Riordan is the State Clinical Services Manager at LWB. In her witness statement, 51 Ms Riordan said that one of the key functions of her role is to review, approve and oversee the use of restrictive practices at LWB.52 Ms Riordan explained in her statement that a restrictive practice is a practice or intervention that has the effect of restricting the rights or freedom of movement of a person with a disability, with the primary purpose of protecting the person or others from harm.53 Ms Riordan said that LWB must comply with the quality standards prescribed by the Disability Services Act 1993 (WA) (DSA).54 In addition LWB has contractual obligations to the Disability Services Commission relating to service delivery.55 Together with the Disability Services Commission, LWB has implemented a Voluntary Code of Practice for the Elimination of Restrictive Practices (Code) to ensure best practice.56

[57] Ms Riordan gave evidence that she undertook an audit of the restrictive practices in use at LWB’s sites across the state. As part of this audit, Ms Riordan visited LWB’s Miami Lane Respite Centre (Miami Lane) on 4 September 2018 to review the restrictive practices in operation, of which there were a number. 57 Ms Riordan said that she felt concerned as the practices contravened LWB’s obligations under the Code and did not represent best practice.58 Ms Riordan determined that the restrictive practices at Miami Lane should immediately cease.59

[58] Ms Riordan communicated her concerns, views and directions to Ms Hill and Ms Sharkey by email on 5 September 2018. In her email, Ms Riordan said that the use of the restricted practices was not approved and asked that a plan be developed for their removal “in a manner that is safe for staff and optimises service delivery for clients.” 60 Ms Riordan said did not receive a response from Ms Sharkey to this email.

Evidence of Ms Hill

[59] Ms Hill is the Program Manager Disability and Aged Care at LWB. Ms Hill was Ms Sharkey’s line manager. In her witness statement, 61 Ms Hill addressed the following issues, broadly reflecting the matters that were raised by Ms Sharkey in her resignation letter dated 8 October 2018: the removal of the on-call arrangement, restrictive practices at Miami Lane, a workplace incident on 30 August 2018, Ms Sharkey’s personal health issue on 13 August 2018 and the removal of a fleet vehicle at Miami Lane.

[60] In respect of the on-call arrangement, Ms Hill said that the previous arrangement was that Ms Sharkey was solely responsible for the provision of on-call support at Miami Lane. This was provided under a policy. This effectively required Ms Sharkey to be ready, willing and able to return to work 24 hours per day, 7 days per week. 62 LWB had progressively been moving to a centralised on-call arrangement. On 4 September 2018, Ms Hill sent an email to Ms Sharkey advising her that there would be changes to the on-call roster by the end of the month of September 2018 and moving forward, all Care Co-ordinators would be on an on-call roster.63 The email included the following:

“Moving forward I would also like to see Miami Lane falling into the on call system with the rest of disability by the end of this month. Can I please request on call profiles are completed and saved onto the O drive for any clients whom are booked in, this will need to be completed for all new individuals when on boarding as a respite client moving forward, if they are already an LWB client please request this is completed by the CC. I will need these by COB 14.09.18, I have attached an example for your reference.

Please let me know if you need any support with the above.” 64

[61] Ms Hill said that while she did not consider the change to the on-call arrangements to be a major change for the purposes of consultation under the SCHCDS Award, Ms Hill intended to consult with Ms Sharkey about the issue. Ms Hill said that after she provided the 4 September 2018 email to Ms Sharkey, she did not receive a response from Ms Sharkey and then received her resignation letter on 8 October 2018. 65 In relation to the issue concerning restrictive practices Ms Hill said Ms Riordan had ultimate responsibility for this process. Ms Hill attended the inspection with Ms Riordan at Miami Lane on 4 September 2018. Ms Sharkey was advised of the inspection in advance.66 On 5 September 2018, Ms Riordan emailed Ms Sharkey to explain why the practices had not been endorsed and sought the safe removal of the restricted practices. Ms Hill said that no changes were made to Ms Sharkey’s terms of employment as part of this process.67

[62] In relation to a workplace incident on 30 August 2018, Ms Hill said that she received a voicemail message from Ms Sharkey involving a client’s behaviour at Miami Lane. There was no mention of a staff or client injury in the message and no indication it was a critical incident. 68 No further support was sought by Ms Sharkey.69 Ms Hill sent a text message to Ms Sharkey that evening concerning the issue and in her response, Ms Sharkey did not indicate there had been an issue of violence70 and nor had the LWB WA Checklist for Incident Reporting been completed, as required if the staff members is concerned that the incident resulted in harm occurring. Ms Hill said she understood that the client had shouted at the support staff and a debrief had been held with the affected employee.71

[63] With respect to Ms Sharkey’s hospitalisation on or about 13 August 2018, Ms Hill said that while Ms Sharkey had told her by way of text message on 14 August 2018 that she had been discharged from hospital, Ms Hill did not know that Ms Sharkey had been taken to hospital by ambulance with a suspected heart attack until 25 September 2018. Upon becoming aware of these circumstances on 25 September 2018, Ms Hill contacted Ms Sharkey by text message to enquire about her health but Ms Sharkey did not reply.

[64] Ms Hill gave evidence that previous management at LWB had made a Holden Captiva available for use by Support Workers at Miami Lane. The vehicle was not specifically allocated to Ms Sharkey. Ms Sharkey received a car allowance as part of her remuneration package. 72 A review of fleet vehicles was undertaken by LWB and the Holden Captiva at Miami Lane was relocated to another site. A 10 seater van is still based at Miami Lane and available for client activities.

LWB’s outline of submissions dated 17 December 2018

[65] In its outline of submissions dated 17 December 2018, 73 LWB denied that Ms Sharkey was dismissed at its initiative. It said that Ms Sharkey’s resignation was voluntary and there was no question that the resignation was forced as contemplated by s.386(2)(b) of the Act. It submitted that alternative pathways were available to Ms Sharkey to raise her concerns. LWB’s outline of submissions specifically addressed the following matters: the on-call arrangement, allegations of bullying and harassment, the legal principles concerning the concept of resignation as a dismissal, and the question of remedy.

[66] LWB said that an on-call arrangement operated at Miami Lane pursuant to an “On Call Policy,” which provided for an on-call allowance of $30 for each 24 hour period Monday to Friday and $50 per 24 hour period on weekends. Ms Sharkey was directed to participate in in the on-call arrangement for Miami Lane but the allowance was not a contractual entitlement. It said that LWB was entitled to amend or remove the arrangement at its discretion. It said that LWB advised Ms Sharkey of the decision to centralise on-call arrangements in Western Australia on 4 September 2018 by email and this decision did not constitute major change within the meaning of clause 8 of the SCHCDS Award, and nor was it likely to have significant effects on Ms Sharkey. Accordingly, consultation was not required pursuant to clause 8 of the SCHCDS Award. LWB also said the on-call arrangement did not form part of Ms Sharkey’s ordinary hours of work, such that the change was not one to Ms Sharkey’s regular roster or ordinary hours of work within the meaning of clause 8A of the SCHCDS Award.

[67] LWB said that notwithstanding there was no obligation to consult with Ms Sharkey about this matter, it “determined to engage in consultation” with Ms Sharkey between 4 September and 6 September 2018 but Ms Sharkey refrained from expressing a view or seeking further information. LWB contended that it had taken reasonable steps to engage “in a process” with Ms Sharkey but she took personal leave and subsequently resigned prior to any change to the on-call arrangement being implemented. As she had no contractual right to be on-call (and therefore no absolute right or entitlement to be paid an on-call allowance), it said the variation cannot be said to constitute conduct that would have the effect of forcing Ms Sharkey to resign from her employment.

[68] In relation to Ms Sharkey’s statement in the resignation letter that she had been bullied at the workplace, LWB argued that there was no evidence to indicate there had been any bullying or harassment within the meaning of the Act. It said that the matters identified in Ms Sharkey’s complaint email and her resignation letter constituted reasonable management action and in any event, Ms Sharkey chose not to engage in any process with LWB after she wrote the 4 September email. It said that these circumstances did not result in a situation where Ms Sharkey had no effective or real choice other than to resign.

[69] LWB’s outline of submissions concluded with a consideration of the legal test to be applied with respect to whether a resignation was forced by a course of conduct engaged in by the employer and the question of remedy. As is explored further at [85] below, the outline of submissions did not provide any analysis of the other matters set out in Ms Sharkey’s complaint email or in the resignation letter such as:

(a) the lack of involvement in decisions made at Miami Lane;

(b) the removal of the Captiva SUV at Miami Lane;

(c) the client incident on 30 August 2018;

(d) Ms Sharkey’s health concern on or about 14 August 2018; or

(e) the issue concerning the restricted practices at Miami Lane.

Appeal ground A1

[70] The first ground of appeal – A1 – concerns an order for costs made against the Appellant pursuant to s. 400A of the Act. That section is in the following terms:

“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.”

[71] In cases considering other iterations of legislative provisions concerning the power of the Commission to award costs, it has been held – albeit in the context of whether making an application was unreasonable – that consideration of what is unreasonable must be objectively determined and that the test is an objective one directed to belief formed on a reasonable basis. In our view the same approach applies to determining whether an act or omission is unreasonable for the purposes of s. 400A(1).

[72] There is one unreasonable act directly attributed to the Appellant and upon which the decision to award costs against her pursuant to s. 400A(1) was based – that the Appellant failed to discontinue the unfair dismissal application on 17 December 2018 upon receipt of LWB’s outline of submissions and the witness statements of Ms Meyers, Ms Riordan and Ms Hill. 74 The Deputy President held that on 17 December 2018, “a reasonable person would have appreciated the failings of the repudiatory conduct argument and have appreciated that she faced insurmountable difficulties were she to press that there had been no real choice but to resign.”75

[73] While there is some discussion about the Appellant not accepting a settlement offer made on or around 6 December 2018 and making a “dilatory” counter offer on 29 January 2019, in the section of the Deputy President’s reasons regarding Ms Sharkey’s unreasonable act for the purposes of s. 400A(1), the finding in relation to Ms Sharkey does not appear to cover refusing to accept an offer of settlement. 76 Further, while there are implicit findings that the Appellant deliberately cut off communication with LWB from 5 September to 8 October 2018, repercussions of the Appellant’s conduct in this regard appear to have been visited on Mr Mullally rather than the Appellant.

[74] In some cases it will be objectively apparent that at a particular point in time an application or a response is doomed to failure. In terms of applications, such cases include circumstances where on the facts pleaded, the party’s application or response cannot succeed or where the response to an application sets out facts which are undisputed or cannot be disputed, upon which it is apparent that the application being responded to cannot succeed. However, where there are disputed facts which can only be resolved at hearing, which if resolved in favour of a particular party would raise an arguable case – either in support of or opposition to an application – it is unlikely that a party who presses on and seeks that the Commission rule on disputed facts is acting unreasonably.

[75] A further circumstance in which it may be concluded that a person who presses on in the face of facts asserted by another party has acted unreasonably by continuing with an application or opposition to an application, is a case where it is demonstrated that the party who did not withdraw was dishonest or untruthful about the facts he or she asserted. What is clear is that more is required than the circumstance that an assertion is wrong or that the facts asserted by a party are not accepted by the Commission or that a different conclusion is drawn from those facts than the conclusion asserted by the party who raises them. Further, a conclusion of dishonesty could not be reached without a hearing and a finding being made in this regard.

[76] In the present case, the material filed by LWB on 17 December 2018 was the first tranche of material filed in accordance with directions for the hearing of both LWB’s jurisdictional objection and the Appellant’s unfair dismissal application. LWB was required to file its material first on the basis that it had raised the jurisdictional objection to the Appellant’s unfair dismissal application. The Appellant was required to file her material in relation to the LWB’s jurisdictional objection and the merits of her application on 7 January 2019. The hearing in relation to the both the jurisdictional objection and the merits of the Appellant’s unfair dismissal application was held on 1 February 2019. Accordingly as at 17 December 2018 when LWB filed its material, the Appellant had not had an opportunity to present her case to the Commission in any cogent way. The only material before the Commission at that time from the Appellant was her Form F2 Application for an unfair dismissal remedy dated 25 October 2018 (Form F2). 77

[77] As previously noted, the Form F2 variously asserted that the Appellant was forced to resign due to a course of conduct engaged in by her employer. The Appellant contended that the conduct was such that she could no longer tolerate the workplace and was repudiatory of her employment contract. The repudiation point was only one of the assertions being pursued by the Appellant in her attempt to establish that she had been dismissed.

[78] Section 386(1) of the Act concerns the meaning of “dismissed”. It is not solely or principally directed at conduct on the part of an employer which amounts to repudiation of the employment contract, but rather at whether the person’s employment was terminated at the employer’s initiative or the person resigned and was forced to do so because of conduct or a course of conduct engaged in by the employer. Repudiation of an employment contract by an employer is but one of the bases upon which the Commission may find that employment ended at the initiative of the employer. The same conduct which is said to amount to repudiation of an employment contract may also be part of a course of conduct which results in the employee having no effective choice to remain in employment and being forced to resign.

[79] The Appellant argued that the removal of the on-call allowance significantly reduced her annual income and was part of a course of conduct to force her resignation. It is apparent from the costs decision that the removal of the on call allowance was considered by the Deputy President within the paradigm of LWB’s assertion that the Appellant did not have a contractual entitlement to the allowance and that the removal of the allowance was not a basis for a finding that LWB had repudiated the Appellant’s contract of employment. While the correctness of this conclusion is not in issue in the present proceedings, it was not the end of the matter. A broader consideration of LWB’s evidence would have established that the fact that the Appellant did not have a contractual entitlement to the allowance was not determinative of whether the Appellant was entitled to rely on its removal in support of her claim. On any view, $12,000 was a significant sum of money to have been removed from Ms Sharkey’s annual income representing an approximate 20% reduction in her earnings.

[80] LWB did not deal with these arguments advanced by the Appellant in its material. Its evidence and outline of submissions left open the s. 386(1)(b) argument pleaded in the Appellant’s Form F2. The Appellant’s Form F2 also put in issue that consultation required by the SCHCDS Award had not been undertaken by LWB. Ms Hill’s assertion in her witness statement that there was no requirement to consult Ms Sharkey about this change because it was in place in other LWB establishments is not determinative of whether there was such a requirement and represents only Ms Hill’s arguably incorrect assumption. It is also arguable that even if the removal of the on-call allowance was not a significant change for the purposes of clause 8 of the SCHCDS Award, it was a change in respect of rosters or hours of work requiring consultation pursuant to clause 8A of the SCHCDS Award. Whether consultation was or was not required by the terms of the Award was not the end of the matter. Failure to consult was also capable of being considered as part of a course of conduct alleged by Ms Sharkey to have forced her resignation regardless of whether or not it was required by the SCHCDS Award.

[81] A review of Ms Hill’s witness statement filed on 17 December 2018 appending an email sent to Ms Sharkey on 4 September 2018 advising of the removal of the on-call allowance, discloses that Ms Hill did little more than tell Ms Sharkey of the decision and offer support in the context of changes to work practices associated with the removal of the allowance. 78 On the face of that email, it was not an invitation to discuss the change in any meaningful way but rather to discuss the impact of what had already been decided. While Ms Meyers’ stated that she planned to consult with Ms Sharkey but was unable to do so because of Ms Sharkey’s absence from work, it is arguable that what was offered was not consultation and would have been meaningless. The email offering a meeting was sent after the decision to remove the allowance had already been taken and communicated to the Appellant. In short, the lack of consultation was evident on the face of the material filed by LWB on 17 December 2018 and again left open the argument that this was part of the relevant course of conduct for the purposes of s. 386(1)(b).

[82] There are other matters that are evident on the face of the material filed by LWB on 17 December 2018 that at least leave open the argument that various managers of LWB engaged in a course of conduct that forced the Appellant’s resignation. The evidence of LWB’s witnesses makes clear that the series of events which Ms Sharkey alleged forced her resignation all occurred within a relatively short period of time. Ms Sharkey was advised of the removal of the on-call allowance on 4 September 2018 and the changes to restrictive practices on 5 September. Both of these events were also in close proximity to the removal of the Holden Captiva (31 August 2018) the violent incident complained of by Ms Sharkey (30 August 2018) and her hospitalisation on 13 August 2018 with a suspected heart attack.

[83] It is also the case that on the face of the witness statements filed by LWB, the implicit criticism of the asserted failure of Ms Sharkey to return calls or respond to emails in the period when she took personal leave prior to her resignation, is somewhat inconsistent and illogical. Ms Hill and Ms Meyers both complained of a lack of response by Ms Sharkey to communications with her in the period from 5 September 2018 until her resignation. Ms Meyers explains the failure of LWB managers to communicate with Ms Sharkey by stating that it is reasonable and practical not to contact a staff member who is absent on personal leave. Quite simply, if it was reasonable for Ms Meyer and other LWB managers not to contact Ms Sharkey while Ms Sharkey was on personal leave, it was conversely reasonable for Ms Sharkey not to contact Ms Meyers or any other person at LWB during the period of personal leave.

[84] The material filed by LWB on 17 December 2018, on its face, establishes facts on which at best, two equally probable inferences could be drawn. One inference is that Ms Sharkey deliberately cut off communication with LWB. The other is that she was taking a period of personal leave and it was not reasonable to expect her to discuss matters which had contributed to her need to take that leave, while she was absent. It is also equally probable that if Mr Mullally advised Ms Sharkey not to contact LWB in the relevant period, he did so because she was taking personal leave and should not be required to make contact while on such leave rather than to engineer a case for constructive dismissal. It is notable that no evidence was called by LWB to contradict the assertion that Ms Sharkey was on approved personal leave and had provided medical certificates to cover the period. The material filed and served by Ms Sharkey on 7 January 2019 and the evidence at the hearing of Ms Sharkey’s unfair dismissal application, did not establish facts that made one of these inferences more likely than the other.

[85] LWB’s outline of submissions dated 17 December 2018 also did not expressly address a number of other concerns of Ms Sharkey, evident from the Form F2 and her resignation letter. This included the lack of involvement in policies and practices at Miami Lane, the removal of the fleet vehicle from Miami Lane, Ms Sharkey’s concerns regarding a workplace incident on 30 August 2018, Ms Sharkey’s concerns regarding LWB’s response to her personal illness, or Ms Sharkey’s concerns regarding the removal of restricted practices at Miami Lane. While it is accepted that the Directions required LWB to file and serve “an outline of submissions” only and these matters were dealt with in LWB’s witness statements, and that Ms Sharkey had not yet filed her material, it cannot be said that LWB’s case was “presented in a forensic fashion” and “nothing was undisclosed,” as found by the Deputy President in the costs decision.

[86] LWB also contended in its 17 December 2018 submissions that “where an individual claims they were forced to resign from their employment, the onus is on the individual to prove that they did not resign voluntarily and that the employer forced them to do it.” 79 Implicit in this submission is the proposition that it was incumbent upon Ms Sharkey to prove that her resignation was forced within the meaning of s.386(1)(b). Ms Sharkey cannot be criticised on the basis that she took steps to do just that and continued with her application.

[87] The Appellant’s material filed and served on 7 January 2019 and the evidence and submissions in the hearing on 2 February 2019 further support a conclusion that LWB’s material filed on 17 December 2018 was not a complete answer the Appellant’s unfair dismissal application. At the point that LWB’s material was filed on 17 December 2018, there were disputed issues of fact and law which could only be resolved at hearing.

[88] The full extent of the case against LWB had not been revealed by Ms Sharkey at the point LWB filed its material. In Ms Sharkey’s 7 January 2019 material, she continued to contend that the variation to the on-call arrangement and other matters had the effect of forcing her to resign her employment. The issue of whether the resignation was forced was squarely in dispute between the parties. The fact that the Deputy President ultimately determined this issue against Ms Sharkey and that the correctness of her decision in this regard is not in doubt, does not mean that it is open to conclude that it was “near futile”  80for the Appellant to press the forced resignation argument, as at 17 December 2018.

[89] An assessment of the material filed and served on behalf of LWB on 17 December 2018 does not disclose an absence of merit in Ms Sharkey’s case such that her failure to discontinue the application was an unreasonable act. While there were aspects to Ms Sharkey’s claim that had little prospect of success – for example the claim of repudiation of her contract of employment – the content of the 17 December 2018 material does not support a conclusion that Ms Sharkey acted unreasonably by not discontinuing her application, such as to invoke the jurisdiction to make a costs order against her. We are respectfully unable to agree with the Deputy President’s description of the material filed by Ai Group on behalf of LWB. We are also of the view that Ms Sharkey’s material and her oral evidence at the hearing indicates that her case was at least arguable. The fact that her case was not accepted is not a proper basis for finding that the continuation of her case past the receipt of untested material from LWB was unreasonable.

[90] The Deputy Presidents’ conclusions about the material filed by LWB on 17 December 2018 were not open to her and were in error in light of the Appellant’s material filed on 7 January 2019 and the evidence and submissions at the hearing. The conclusion was erroneous and in our view the error was a significant error of fact. This is particularly so given that it founded the conclusion in relation to Ms Sharkey’s conduct for the purposes of s. 400A and other conclusions about the conduct of the Appellant and Mr Mullally upon which findings were made by the Deputy President. Ground A1 of the Notice of Appeal therefore succeeds.

Appeal grounds B3, B4, B5 and C9

[91] It is convenient to next consider appeal grounds B3, B4, B5 and C9. The findings to which these grounds of appeal relate are that Mr Mullally engaged in unreasonable acts or omissions for the purposes of the Deputy President making an order for costs against Mr Mullally pursuant to s.401 of the Act. That section is in the following terms:

“401  Costs orders against lawyers and paid agents

(1) This section applies if:

(a) an application for an unfair dismissal remedy has been made under section 394; and

(b)  a person who is a party to the matter has engaged a lawyer or paid agent (the representative) to represent the person in the matter; and

(c)  under section 596, the person is required to seek the FWC’s permission to be represented by the representative.

(1A)  The FWC may make an order for costs against the representative for costs incurred by the other party to the matter if the FWC is satisfied that the representative caused those costs to be incurred because:

(a)  the representative encouraged the person to start, continue or respond to the matter and it should have been reasonably apparent that the person had no reasonable prospect of success in the matter; or

(b)  of an unreasonable act or omission of the representative in connection with the conduct or continuation of the matter.

(2)  The FWC may make an order under this section 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.”

[92] As noted by the Federal Court in Barkhazen, the power to make a costs order against a lawyer must be exercised with care and discretion and only in clear cases. The element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, or an intention to use the proceeding for an ulterior purpose, or to abuse the processes of the court, or with a disregard of any proper consideration of the prospects of success. However, an ulterior purpose or an abuse of process cannot be assumed simply because the case does not succeed or even because it is hopeless.

[93] The Deputy President concluded that Mr Mullally engaged in an unreasonable act or omission by failing to advise Ms Sharkey to discontinue the application after receipt of LWB’s outline of submissions and witness statements of 17 December 2018. 81 This finding is the subject matter of appeal ground B3. In relation to this alleged unreasonable act, the Deputy President stated that her findings with in relation to s. 401(1A)(b) concerning Mr Mullally’s conduct were “equivalent” to her findings in respect of Ms Sharkey and s. 400A(1). It is therefore clear that this finding relates to s. 401(1A)(b).

[94] The finding that Mr Mullally’s conduct – in failing to advise the Appellant to discontinue her unfair dismissal application upon receipt of LWB’s material on 17 December 2018 – was an unreasonable act was based on the same view of that material which we have found in our consideration of appeal ground A1 to be a significant error. It follows that our conclusions in relation to appeal ground A1 apply equally to Appeal ground B3. Accordingly appeal ground B3 succeeds.

[95] Appeal ground B4 deals with the finding that Mr Mullally’s conduct in making a settlement offer on 29 January 2019 of $7,500 to resolve all claims between the parties was a further unreasonable act for the purposes of s.401(1A)(b) of the Act. 82 The context in which this offer was made is that on 6 December 2018 the Appellant made a written offer to LWB to settle her unfair dismissal application and another work related claim alleging an underpayment of wages under the SCHCDS Award, for an amount of $10,000. It is clear from the costs decision that prior to this offer being made by the Appellant, LWB had made a settlement offer which was rejected. The Deputy President also states that Mr Mullally on behalf of the Appellant had attributed $4,000 to the alleged underpayment of wages claim, the strength of which she was unable to evaluate. The Deputy President made an assessment on this basis that Mr Mullally had attributed an amount of $6,000 to the unfair dismissal application.

[96] A counter offer of $5,400 was made by LWB which the Deputy President stated appeared to be “manifestly reasonable” on the basis of its “equivalence” with the component sought by the Appellant for her unfair dismissal claim. Ms Sharkey did not respond immediately to the counter offer. The Deputy President found that this was not immediately unreasonable but became so when LWB’s material was received on 17 December 2018.

[97] We do not accept that this amounted to an unreasonable act in circumstances where the parties had been encouraged by the Deputy President at a Mention on 17 January 2019 to try to resolve the dispute. Mr Mullally argued that the offer was a gesture of goodwill. In the circumstances of this case, and noting the Deputy President’s encouragement of the parties at the Mention to attempt to resolve the dispute, it cannot be said that the settlement offer constituted unreasonable conduct in the manner described in Barkhazen. It is also the case that despite finding that she was not in a position to assess the merits of the Appellant’s alleged underpayment of wages claim, the Deputy President did not appear to consider the impact of that claim on the quantum of the counter offer. When that claim is taken into account, the Deputy Presidents assessment that the counter offer was “manifestly reasonable” was inconsistent with the facts.

[98] In our view, the conclusion that Mr Mullally’s conduct in making a settlement offer on 29 January 2019 of $7,500 to resolve all claims between the parties was a further unreasonable act for the purposes of s.401(1A)(b) of the Act was not open to the Deputy President and the conclusion was erroneous. The finding was based on significant errors of fact. Appeal ground B4 also succeeds.

[99] We turn now to consider appeal ground B5. That ground concerns the finding in [152] of the costs decision that Mr Mullally encouraged the Appellant to persist with her unfair dismissal application when it should have been reasonably apparent that the Appellant had no reasonable prospects of success when LWB’s material was received on 17 December 2018, for the purposes of s. 401(1A)(a). The finding is said by the Deputy President to be made on the basis of the evidence before her, which we assume encompasses her findings in relation to LWB’s material filed on 17 December 2018. It is notable that the Deputy President indicated that it was unnecessary to make the finding but did so in any event and it is arguable that the finding is obiter dicta as submitted by LWB.

[100] However, we also note that the costs order made by the Deputy President on 25 June 2019 is made pursuant to s. 400A and s. 401(1A) of the Act and it is not clear that only s. 401(1A)(b) was relied on in relation to the order insofar as it relates to Mr Mullally. Accordingly, we proceed on the basis that the Deputy President did make a finding pursuant to s. 401(1A)(a) of the Act with respect to Mr Mullally.

[101] Given the emphasis placed by the Deputy President on the material filed by LWB on 17 December 2018, it is likely the s. 401(1A)(a) finding is based at least in part, on the Deputy President’s views about that material. On this basis, for reasons set out above, conclusions in relation to appeal ground A1 also apply to appeal ground B5. Accordingly, appeal ground B5 succeeds.

[102] There are other conclusions about the conduct of Mr Mullally in the Deputy President’s consideration of whether costs should be awarded for the purposes of s. 401(1A) and as we have noted it is not clear whether those conclusions relate to s. 401(1A)(a) or s. 401(1A)(b). In paragraph [149] of the costs decision the Deputy President concluded that the Appellant knowingly and deliberately maintained her silence in the period from 6 September 2018 until 8 October and that Mr Mullally had advised her to do so.

[103] Clearly if Mr Mullally engaged in this conduct, he did so before the Appellant made her unfair dismissal application and as a matter of logic, it cannot relate to the conduct or continuation of that application. We proceed on the basis that this conduct was relevant to the Deputy President’s consideration of and conclusion in relation to s. 401(1A)(a) that Mr Mullally’s advice that the Appellant not communicate with LWB was part of the encouragement he gave the Appellant to start the matter by making an unfair dismissal application on the basis of constructive dismissal.

[104] In short there was an explanation for the Appellant’s non-contact with managers of LWB during the period of her personal leave that was at least equally probable – the Appellant was not fit for work for reasons of personal illness. In her witness statement filed on 7 January 2019, Ms Sharkey said that the removal of the on call allowance on 4 September 2018 “tipped her over the edge.” 83 Ms Sharkey also gave evidence in the unfair dismissal hearing that she was “absolutely distraught by then”84 and was “too ill to have contact initially.”85 Ms Sharkey also asserted that she had sought assistance from an external service provided by LWB to support employees and had been advised by a consultant that she should take personal leave. Further, Ms Sharkey stated that she took leave from 5 September 2018 notwithstanding that Ms Meyer said that Ms Sharkey was absent from 10 September 2018.

[105] The transcript of the unfair dismissal hearing also indicates that Ms Sharkey maintained under cross-examination that she went on sick leave at the end of the day she received the email from Ms Meyer advising her of a willingness to meet to discuss Ms Sharkey’s issues and was too distraught at that stage to have a discussion. 86 Ms Sharkey also maintained that she had provided medical certificates to LWB and had been paid personal leave notwithstanding that she did not tender those certificates at the hearing. LWB did not dispute Ms Sharkey’s evidence on this matter. The transcript also indicates that in re-examination Ms Sharkey was asked about the alleged failure to communicate with LWB and her medical state after 4 September 2018 and in an exchange with her representative said:

“Yes, all right then. You were then cross-examined about the email you sent to Jennie Burns and the ensuing communications from Clare Meyers and the suggestion of arranging meetings and so forth. What was your state or your medical state after those communications of the 4th?---Very poor, I was very stressed, really emotional, crying all of the time. The Employment Assistant counsellor even continued ringing me and we had appointments and supporting me. When I went off sick I couldn't even get out of bed I was that bad. The doctor tried to put me on antidepressants which I had a bit of a reaction to and they had to take me off, so I was in quite a poor state. 87

[106] There were two possibilities for Ms Sharkey’s non-communication with LWB managers for the period of 5 September 2018 until 8 October 2018 – that Ms Sharkey on advice from Mr Mullally, was deliberately avoiding contact with LWB’s managers to engineer a constructive dismissal claim or that Ms Sharkey was suffering from a personal illness and was unable to make contact with LWB’s managers due to the effects of that illness. The explanations were based on inferences that were at best, equally probable. Put another way, the circumstances appearing in evidence gave rise to conflicting inferences of equal degrees of probability so that the choice between them was a mere matter of conjecture. 88

[107] This brings us to appeal ground C9 which concerns the application by the Deputy President of the rule in Jones v Dunkel 89. The Deputy President drew an adverse inference by applying this rule in her consideration of the conduct of Mr Mullally for the purposes of s. 401(1A). The context in which the inference was drawn as set out in paragraph [148] of the costs decision involves findings about the strength of LWB’s material filed on 17 December 2018 and about Ms Sharkey’s evidence that she was advised not to communicate with LWB’s managers and conclusions about this drawn by the Deputy President.

[108] It is clear that the inference the Deputy President drew in relation to the fact that Mr Mullally and Mr Sharkey did not give evidence was a factor in her conclusions about Mr Mullally’s conduct for the purposes of the s. 401(1A). In our view, it was not open for the Deputy President to draw a Jones v Dunkel inference in the circumstances of this case and in doing so the Deputy President fell into error. That error was an error of law.

[109] It is well established that before the rule in Jones v Dunkel can properly be invoked, there must be evidence that calls for an answer 90 or enough evidence to warrant a reasonable or just conclusion in the absence of an explanation or contradiction. We have previously found that the Deputy President’s assessment of the strength of LWB’s case based on its materials filed on 17 December 2018 was erroneous. It is also the case, as we have previously noted, that there were two possible explanations for Ms Sharkey not contacting LWB from 5 September 2018 to 8 October 2018 which were equally probable. In our view, the explanation favoured by the Deputy President was based on inferences in circumstances where equally probable inferences were available and this was not a case where an adverse inference on the basis of the rule in Jones v Dunkel should have been drawn. The Deputy President also observed at paragraph [71] that what passed between Ms Sharkey and her solicitor was unable to be confirmed on the evidence. In circumstances where the facts did not point more conclusively to one of the available inferences, the rule in Jones v Dunkel could not be used to support either inference. Accordingly, appeal ground C9 also succeeds.

Appeal grounds C6, C7 and C8

[110] Ground C6 raises issues in relation to the procedure followed by the Deputy President in deciding to award indemnity costs and whether the case was one which justified an award of costs on that basis. We do not accept the proposition implicit in the Appellant’s submission that indemnity costs cannot be granted unless the initiating application for costs seeks costs on that basis. In our view the approach to considering indemnity costs adopted by the Deputy President discloses no error. The Appellant and her representative were put on notice by way of the submissions filed by LWB in the costs application that indemnity costs were sought and no unfairness arose on this basis. Appeal ground C6 fails insofar as it alleges denial of procedural fairness.

[111] However, we do accept, on the basis of our conclusions in relation to the Appellant’s case at first instance, that the case was one where indemnity costs should not have been granted and in our view the decision to do so was not open to the Deputy President. The Appellant’s case was not doomed from the outset and there was no basis for finding that the Appellant or her representative made allegations knowing them to be false or that the proceedings were commenced for some ulterior motive. The fact that the Appellant’s case was not strong or that her contentions were not accepted was not a basis for the grant of indemnity costs. The Deputy President erred in awarding indemnity costs in the circumstances of the case and accordingly appeal ground C6 succeeds in this regard.

[112] In relation to ground C7 we do not see any error in the approach to the admission by the Deputy President of Exhibit A3. In our view the Deputy President required no evidence of the quantum of costs incurred, and with or without the document there was a sufficient basis to find that costs had been incurred. Appeal ground C7 fails. We also accept LWB’s submission in relation to appeal ground C8. In short there was nothing unorthodox about the manner in which the Deputy President approached the procedural aspects of quantifying costs and it was open to her to deal with the question of whether costs should be granted and then to put in place a separate procedural step to quantify those costs. While it is regrettable that the costs application did not contain an itemised schedule, no issue of fairness arose as a result. Appeal ground C8 also fails.

Appeal ground A2

[113] In relation to appeal ground A2, we note that the Appellant accepted that the observations made by the Deputy President were obiter. We are content to proceed on that basis and therefore dismiss appeal ground A2. However, we note that the Deputy President extensively considered the proper construction of s. 611 of the Act in circumstances where it was not necessary that she do so. A key part of that consideration led to the Deputy President concluding that the decision of the full bench in Carter v Qantas is wrong. 91

[114] We are of the view that it is desirable that members sitting alone should adhere to Full Bench decisions which are relevant to the matter being determined. It is clear that the Deputy President was cognisant of that point and at [126] referred to the position stated by a Full Bench of the Commission as follows:

“There is not a developed system of stare decisis in this jurisdiction. However, it is clearly desirable for members of the Commission sitting alone to adhere to Full Bench decisions which are relevant to the matter being determined. Such a policy aids consistent decision making which in turn provides the parties to Commission proceedings with greater certainty.” 92

[115] In the present case it is not apparent that significant argument was put before the Deputy President to the effect that the decision of the Full Bench in Carter v Qantas was wrong. While the written submissions of LWB in the costs application make reference to the decision of Deputy President Sams in Dino De Giusti v NSW Trains, it is nowhere stated that the Deputy President should depart from Carter v Qantas with respect to the application of s. 611(2)(b). It is also the case that at the hearing of the costs application LWB did not make such an assertion.

[116] It appears that none of the parties in the costs application were on notice that the Deputy President intended to consider the correctness of Carter v Qantas in the costs decision. Accordingly, the neither LWB or Appellant had the opportunity to address this matter in submissions. Unsurprisingly the Appellant’s written submissions in the costs application (which were made after the hearing) simply asserted the established position in relation to s. 611(2)(b) to the effect that the test in that section is applied at the point the application is made. At paragraph [85] of the costs decision the Deputy President was somewhat critical of the Appellant’s submissions on s. 611(b) and stated that it was “both supported and unsupported in decisions within the Commission”.

[117] The proposition asserted by the Appellant in relation to s. 611(2)(b) – albeit briefly – is consistent with well-established Full Bench authority and the Appellant was entitled to base her submissions on such authority. While we have proceeded on the basis that the comments in relation to s. 611(2) were obiter and have not upheld the appeal on ground A2, the implications of a single member departing from an established full bench authority which is binding in the circumstances of the case being considered, on the grounds that he or she thinks that the case in which it is established was not correctly decided, are significant. As a Full Bench of the Commission stated in Pacific Access Pty Ltd v CPSU:

“The Commissioner decided not to follow a Full Bench authority which he regarded as binding. That was a fundamental error which deprived Pacific Access of the success which it was entitled to in accordance with binding authority. Whilst the Commissioner made it clear he thought the decision was wrong, he was nevertheless under a clear duty to follow it. His failure to follow an authoritative Full Bench decision was a serious error of principle which attracts the public interest. This alone is reason to grant leave to appeal and to quash the directions.” 93

CONCLUSION AND ORDERS

[118] For the reasons stated we grant permission to appeal and uphold the appeal on grounds A1, B3, B4, B5, B6 (on the limited basis that it was not open to award indemnity costs) and C9. As a consequence the costs decision should be quashed. Having regard to our findings we are of the view that there is no alternative basis for an award of costs against either the Appellant or Mr Mullally. The Orders of the Commission are:

1. Permission to appeal is granted.

2. The Appeal is upheld.

3. The Decision in [2019] FWC 2287 is quashed.

4. The application by LWB for costs in U2018/11109 is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr P Mullally of Workclaims Australia for the Appellant.

Mr R McMahon of Ai Group for the Respondent.

Hearing details:

2019.

8 August.

Melbourne with video-link to Perth.

Printed by authority of the Commonwealth Government Printer

<PR714054>

 1   Donnalyn Sharkey v Life Without Barriers [2019] FWC 2287.

 2   PR709676.

 3   [2019] FWC 569

 4   Coal & Allied Mining Services Pty Ltd v Lawler and Others (2011) 192 FCR 78 at paragraph 43.

 5   Ibid at paragraph 44.

 6   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343.

 7   (1936) 55 CLR 499.

 8   [2012] FWAFB 3540.

 9   Ibid at [25].

 10   [2019] FWC 2287 at [49].

 11   Ibid at [59].

 12   Ibid at [69].

 13   Dino De Giusti v NSW Trains T/A NSW Trainslink [2018] FWC 1843; Sharn Stanley v QBE Management Services Pty Limited T/A QBE [2012] FWA 7165; Dino De Giusti v NSW Trains T/A NSW Trainlink [2012] FWA 10164; Mr Ruben Galea v Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans [2017] FWC 2943; Shaun Welsh v Just Fine Food T/A Vanilla Slice Pty Ltd [2018] FWC 6077.

 14   [2013] FWCFB 1811 at [20].

 15   Sharn Stanley v QBE Management Services Pty Limited T/A QBE [2012] FWA 7165; Dino De Giusti v NSW Trains T/A NSW Trainlink [2012] FWA 10164; Mr Ruben Galea v Billabong Custom Caravans Pty Ltd T/A Billabong Custom Caravans [2017] FWC 2943; Shaun Welsh v Just Fine Food T/A Vanilla Slice Pty Ltd [2018] FWC 6077.

 16   Transcript of proceedings on appeal dated 8 August 2019 (Appeal Transcript) at [35].

 17   Appeal Transcript at [29]-[31].

 18   Appeal Transcript at [105].

 19   Appeal Transcript at [38].

 20   Appeal Transcript at [104].

 21   Appeal Transcript at [105].

 22   Notice of Appeal, B3.1.

 23   Appeal Transcript at [118].

 24   Notice of Appeal, 4.1-4.8.

 25   Notice of Appeal, 5.1-5.3.

 26   [2018] FCA 992.

 27   [1986] FCA 85.

 28   (1958-1959) 101 CLR 298.

 29   Jones v Dunkel (1959) 101 CLR at [16] per Windeyer J citing R v Burdett (1820) 4 B. & Ald. 95 [106 ER 873].

 30  [2019] FWC 2287 at [80].

 31   [2019] FWC 2287 at [74].

 32   Ibid at [73].

 33   Calderbank v Calderbank [1965] 3All ER 333.

 34   Transcript at [231].

 35   Transcript at [233].

 36   Transcript at [236].

 37   [2019] FWC 2287 at [151].

 38   Transcript at [283].

 39   [2019] FWC 2287 at [148].

 40   [2013] FCAFC 145.

 41   LWB outline of submissions in the appeal proceedings at [25].

 42   (1959) 101 CLR 298.

 43   [2019] FWC 2287 at [149].See Transcript of jurisdictional hearing dated 1 February 2019 at [312].

 44   AB273-315.

 45   Annexure CM-1 to the witness statement of C. Meyers dated 17 December 2018 (Meyers statement).

 46   Annexure CM-2 to the Meyers statement.

 47   Meyers statement at [15].

 48   Ibid at [16].

 49   Annexure CM-3 to the Meyers statement., AB284.

 50   Meyers statement at [21].

 51   AB246-272.

 52   Witness statement of K. Riordan dated 17 December 2018 (Riordan statement) at [4].

 53   Riordan statement at [7].

 54   Ibid at [8].

 55   Ibid at [10].

 56   Ibid at [11].

 57   Ibid at [16].

 58   Ibid at [16].

 59   Ibid at [18].

 60   Annexure KR-3 to the Riordan statement, AB270.

 61   AB192-245.

 62   Witness statement of S. Hill dated 17 December 2018 (Hill statement) at [16].

 63   Hill statement at [18].

 64   Annexure PC-5 to the Hill statement, AB220.

 65   Hill statement at [24]. (Note: Ms Hill’s statement incorrectly stated the resignation letter was received on 6 October 2018.)

 66   Hill statement at [31].

 67   Hill statement at [40].

 68   Ibid at [42]-[43].

 69   Ibid at [43].

 70   Annexure PC-9 to the Hill statement, AB244.

 71   Ibid at [45], [50].

 72   Annexure PC-1 to the Hill statement, AB202.

 73   AB384-400.

 74   [2019] FWC 2287 at [78], [80].

 75   [2019] FWC 2287 at [78].

 76   [2019] FWC 2287 at [76] and [80].

 77   See AB457-462.

 78   Annexure PC-5 to the Hill statement.

 79   LWB’s outline of submissions dated 17 December 2018 at [60] (AB397).

 80   [2019] FWC 2287 at [13] and [[73].

 81   [2019] FWC 2287 at [151].

 82   [2019] FWC 2287 at [151].

 83   Sharkey statement at [19].

 84   Transcript of jurisdictional hearing dated 1 February 2019 at [467] (AB126)

 85   Ibid at [469] (AB126).See also [572] (AB136).

 86   Transcript of proceedings 1 February 2019 PN467 – 475.

 87   Transcript of proceedings 1 February 2019 PN572.

 88   Luxton v Vines [1952] 85 CLR 352 at 358 per Dixon, Fullagar and Kitto JJ.

 89   (1958-1959) 101 CLR 298.

 90   Ronchi v Portland Smelter Services Ltd [2005] VSCA 83 at [81]; Cook’s Constructions Pty Ltd v Stork Food Systems Aust Pty Ltd [2008] QC 179 at [51].

 91   [2019] FWC 228 at [129].

 92   Modern awards review 2012 FWAFB 5600 [87].

 93   (1998) 83 IR 323 at 333 per Giudice P, McBean SDP and Lewin C.