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  • Unreported Judgment

Fraser Coast Regional Council v Alderton

 

[2020] QIRC 1

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION

CITATION:

Fraser Coast Regional Council v Alderton [2020] QIRC 001

PARTIES: 

Fraser Coast Regional Council

(Applicant)

v

Alderton, Sally

(Respondent)

CASE NO:

TD/2018/40

PROCEEDING:

Application for costs

DELIVERED ON:

8 January 2020

HEARING DATE:

18 November 2019

Applicant's Submissions - 02 December 2019

Respondent's Submissions - 16 December 2019

Applicant's Reply Submissions - 20 December 2019

MEMBER:

HEARD AT:

Thompson IC

Brisbane and on the papers

ORDER:

  1. The application for costs is granted.
  1. The Respondent is to pay the Applicant's costs as follows:
  1. (i)
    Application for reinstatement (TD/2018/40) being $8347.20; and
  2. (ii)
    Application in existing proceedings being $626.20.

 

INDUSTRIAL LAW – APPLICATION FOR REINSTATMENT – APPLICATION FOR COSTS – where application by respondent for reinstatement refused – where respondent afforded procedural fairness and natural justice – where respondent refused offer of settlement – where respondent put on notice applicant would seek costs if she continued to prosecute her application – whether application without reasonable cause or reasonable prospects of success – whether the refusal of the settlement offer was vexatious or without reasonable cause

LEGISLATION:

Industrial Relations Act 2016, s 316, s 317, s 320, s 322, s 530, s 545

Industrial Relations (Tribunals) Rules 2011

Uniform Civil Procedure Rules 1999 (Qld)

CASES:

Alderton v Fraser Coast Regional Council [2019] QIRC 137

Kanan v Australian Postal and Telecommunications Union (1992) FCA 366, 43 IR 257

State of Queensland (South West Hospital and Health Service) v Tania Crews-Bradley [2016] QIRC 093

Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions [2016] FWC 3120

Alderton v Fraser Coast Regional Council [2019] QIRC 058

State of Queensland (Department of Justice and Attorney-General, Queensland Corrective Services) v Timmins (No 2) [2018] QIRC 117

Marriage v Devine Ltd [2005] 178 QIRC 118

Walters v BT Equipment Pty Ltd (No 2) [2002] 169 QGIG 227

Latoudis v Casey [1990] 170 CLR 534

Gambaro v Workers' Compensation Regulator [2017] ICQ 005

Blackwood (Workers' Compensation Regulator) v Chapman [2015] QIRC 086

O'Reilly v Coco's Trading Pty Ltd [2003] 173 QGIG 337

APPEARANCES:

Mr D. Chen of NB Lawyers for the Applicant.

Ms S. Alderton, Respondent.

Reasons for Decision

Background

  1. [1]
    This is an application in existing proceedings filed on 16 October 2019 by Fraser Coast Regional Council (the Council/Applicant) pursuant to s 545 of the Industrial Relations Act 2016 (the IR Act), seeking costs against Ms Sally Alderton (Alderton/Respondent) in respect of a decision issued by the Queensland Industrial Relations Commission (the Commission) as constituted on 17 September 2019, refusing Ms Alderton's application for reinstatement in matter TD/2018/40[1].
  1. [2]
    The Applicant seeks the following decision:
  1. (a)
    the Applicant applies to the Commission for an Order pursuant to s 545(2)(a) of the IR Act that the Respondent pay the costs incurred by the Applicant in responding to the Respondent's application for reinstatement filed in the Industrial Registry on 12 April 2018;
  2. (b)
    pursuant to paragraph 178 of the Decision delivered on 17 September 2019[2], the Applicant respectfully requests the Commission to issue appropriate directions to facilitate the hearing of this application in existing proceedings; and
  3. (c)
    in the event the Commission sees fit to make an order under s 545 of the Act, the Applicant seeks an order that costs be assessed by the Registrar pursuant to Rule 70(3) of the Industrial Relations (Tribunals) Rules 2011 (Qld) or, in the alternative, that costs be determined based on the scale of costs for Magistrates Courts set out in Schedule 2 of the Uniform Civil Procedure Rules 1999 (Qld).
  1. [3]
    On 18 November 2019 the Commission issued directions for the parties to file and serve written submissions in relation to the application for costs.
  1. [4]
    The parties have each filed written submissions and the matter is determined on the papers.
  1. [5]
    The following chronology supporting the application for costs is extracted from the information deposed by Mr Chen in his affidavit filed in the Commission on 16 October 2019:

Initial Events

  • I received instructions to represent the Applicant on 26 November 2018 and filed a Form 36 - Notice of Change of Lawyer or Agent with the Industrial Registry on the same date.
  • I reviewed the documents provided by the Applicant and formed a view that the Respondent had little to no prospects of success having regard to the documented evidence which demonstrated that the Applicant had afforded the Respondent procedural fairness and natural justice at all material times and that the conduct engaged in by the Respondent was sufficiently serious, as a whole to justify termination of employment.
  • I was instructed by the Applicant to make a "Without Prejudice" settlement offer of eight (8) weeks' gross pay to the Respondent.
  • The offer put the Respondent on notice that her application had no reasonable prospects of success and that the Applicant would seek costs against her if she continued to prosecute her application.
  • On 14 December 2018, I served on the Respondent a Form 23 - List of Documents in accordance with the Amended Further Directions Order dated 29 November 2018.
  • On 19 December 2018, the Respondent sent me correspondence by way of email indicating that she was rejecting the offer provided on 11 December 2018 and proposed a counter-offer of twenty (20) weeks' gross pay.
  • On 20 December 2018, I spoke to Ms Caitlin Noble, Employee Relations Manager of the Applicant in respect of the Respondent's counter-offer.  I informed Ms Noble that the counter-offer was quite close to the statutory limit prescribed by s 322 of the IR Act and therefore only likely to be awarded in compelling applications.  Having regard to the little prospects of success of the Respondent's application I advised that twenty (20) weeks' pay was unlikely to be awarded by the Commission.
  • Ms Noble advised that the highest offer she was authorised by the Applicant to advance to the Respondent was twelve (12) weeks' gross pay and provided instructions to make an offer to the Respondent on such terms.  I considered these instructions to be putting the Applicant's best offer forward to the Respondent.
  • On 21 December 2018, I served on the Respondent the documents she requested from the Applicant's Form 23 - List of Documents.
  • Later on 21 December 2018, I sent correspondence to the Respondent rejecting her counteroffer dated 19 December 2018 and making a further "Without Prejudice" settlement offer of twelve (12) weeks' gross pay.
  • The offer put the Respondent on notice that the Applicant would incur significant costs in defending the application and the Applicant would be relying on the offer to seek a costs order in the event the Respondent's application is determined by the Commission to have been brought vexatiously, without reasonable cause, without reasonable prospects of success or in circumstances where the Respondent obtains a result that is less beneficial than the offer.
  • On 4 January 2019, the Respondent sent me correspondence by way of email indicating that she was rejecting the offer provided on 21 December 2019 and proposed a counter-offer of twenty (20) weeks' gross pay.  This was the same position in the Respondent's correspondence dated 19 December 2018, however the Respondent provided general comments on the substantive application.
  • By 4 January 2019, the Respondent had access to the documents that were to be relied upon by the Applicant in the substantive proceedings (and she had been provided a number of documents as requested).  Accordingly, the Respondent was in a better position to consider the merits of her application.
  • On 11 January 2019, I was instructed by the Applicant to send email correspondence to the Respondent rejecting her counter-offer dated 4 January 2019.  I was not instructed to make a counter-offer given the Applicant's offer dated 21 December 2018 was their best offer and was rejected by the Respondent.
  • The email correspondence reiterated that the Applicant would incur significant expense in defending the Respondent's application and put her on notice that her unreasonable rejection of a genuine settlement offer would be used to form the basis of an application for costs in the event she was unsuccessful.
  • No further communications in respect of offers to settle were made by the Applicant after 11 January 2019.
  • On Friday 5 April 2019, I attended a mention before the Commission.  During the course of the mention, the Commission drew the Respondent's attention to the Unfair dismissal and reinstatement application guide (the Guide) published by the Commission in consideration of the Respondent's status as a self-represented litigant.
  • The Respondent informed the Commission that she was "very familiar with the guide".
  • Given the Respondent's assertion that she was familiar with the Guide, a reasonable inference can be drawn that she was familiar with the relevant considerations of the Commission in determining an application made under s 317 of the IR Act, specifically the provisions contained in s 320 of the IR Act.
  • Part 3.2 of the Guide, which the Respondent indicated she was "very familiar" with, sets out the basis on which the Respondent's application would have been decided upon having regard to s 320 of the IR Act.

Events at the Hearing

  • The Respondent's application was allocated for a three (3) day hearing (Hearing) in Hervey Bay from Tuesday 18 June 2019 to Thursday 20 June 2019.  I continued to act for the Applicant as their solicitor advocate for the duration of the Hearing.
  • During the course of the Hearing, a number of issues became reasonably apparent that demonstrated the Respondent's application had been brought without reasonable cause, having regard to the fact that the onus was on the Respondent to establish, by way of evidence, that her dismissal was unfair within the meaning of s 320 of the IR Act.  Some of the issues are briefly summarised as follows:
  1. (a)
    in respect of the Respondent's assertion that employees of the Applicant had "corroborated" against her in an attempt to have her cease employment, the Respondent readily conceded that she had "no evidence" to support her assertion.
  2. (b)
    in respect of the Respondent's assertion that a change in her position description was bullying, undermining and applied pressure for the Respondent to cease her employment, the Respondent readily conceded that the change in position description had "very little impact".
  3. (c)
    leading a large amount of irrelevant material during the Hearing more applicable to a Workcover claim as opposed to the Respondent's application for reinstatement.
  4. (d)
    continuing to disagree with the decision of Local Government Workcare (LGW) and the subsequent review of its decision by the Office of Industrial Relations that the Deed of Settlement offered on 20 October 2017 by the Applicant did not constitute unreasonable management action.  In any event, the Deed of Settlement was irrelevant to the Respondent's application.
  5. (e)
    making assertions, without any apparent basis, that Ms Noble had falsified the written warning issued on 2 May 2017.
  6. (f)
    adopting a misconceived view that the Applicant should have issued a final written warning prior to making a decision to terminate the Respondent's employment which is contradictory to a plain reading of the Applicant's Discipline Procedure which does not compel the Applicant to issue a final written warning if circumstances are sufficiently serious to justify termination of employment; and
  7. (g)
    at all material times, the Respondent had been offered the opportunity to bring a support person, access to the Applicant's Employee Assistance Program, provided an opportunity to respond to the allegations against her, provided extension of time to respond in addition to paid time off to respond in October 2017.
  • I understand the words "without reasonable cause" used in s 545(2)(a)(i) of the IR Act to refer to an application where on the Applicant's own version of facts, it is clear that the proceeding must fail having regard to the comments of Wilcox J in Kanan v Australian Postal and Telecommunications Union[3].
  • The matters listed in paragraphs (a)-(g) of this Affidavit support an inference that a significant number of the Respondent's arguments were unsupported by evidence or otherwise irrelevant to the application which may give rise to a finding the application must fail.  This is particularly so given that:
  1. (a)
    the matters listed in paragraphs (a)-(g) were reasonably within the knowledge of the Respondent at the time of the application;
  2. (b)
    the Respondent had previously acknowledged, prior to the Hearing, that she was aware of the Guide and therefore the relevant considerations for her application for the reasons set out above in this Affidavit; and
  3. (c)
    notwithstanding her knowledge, she persisted with her application.
  • The issue of an unreasonable refusal of a settlement offer was considered in the matter of State of Queensland (South West Hospital and Health Service) v Tania Crews-Bradley[4] which was an application for costs before the Commission.  In this Decision, O'Connor DP referred to comments made by Williams C in the matter of Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions that:

"failure to accept the offer of settlement involved the continuation of proceedings in wilful disregard of known facts and also was an imprudent refusal of an offer to compromise and this delinquent conduct warrants the Commission exercising its discretion to award indemnity costs".[5]

  • In the circumstances, the Respondent's conduct in rejecting two (2) offers of settlement despite being in full knowledge she did not have evidence to support her application and relitigating medical issues that had been rejected by LGW and the Office of Industrial Relations (which was in any event irrelevant) suggests she wilfully disregarded known facts and imprudently refused a reasonable offer of settlement.  This is a factor in favour of the exercise of discretion by the Commission to order costs against the Respondent.
  • The Applicant reserves its right to make further submissions upon appropriate directions being issued by the Commission for an application for costs pursuant to s 545(2) of the IR Act.
  • On that basis and for the reasons set out above, the Applicant requests that appropriate directions be made by the Commission as referred to by the Commissioner in his Decision for matter TD/2018/40 dated 17 September 2019[6].

Background

  1. [6]
    On 12 April 2018, the Applicant filed an application for reinstatement with the Commission (Matter No. TD/2018/40).
  1. [7]
    A compulsory conference was held before the Commission on 8 May 2018 and was unsuccessful.
  1. [8]
    At a mention on 5 April 2018 the Respondent (in the substantive matter) sought leave pursuant to s 530(4) of the Act to be legally represented in the substantive application.  Following a hearing on 5 and 16 April 2019, the Commission by Decision dated 17 April 2019 granted leave for the Respondent to be legally represented.[7]

Hearing of substantive application

Legislation

  1. [9]
    Section 545 of the Act provides:

 545 General power to award costs

  1. (1)
    A person must bear the person's own costs in relation to a proceeding before the court or commission.
  1. (2)
    However, the court or commission may, on application by a party to the proceeding, order-
  1. (a)
    a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied-

 (i) the party made the application or responded to the application vexatiously or without reasonable cause; or

  1. (ii)
    it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or

 (b) a representative of a party (the represented party) to pay costs incurred by another party to the proceeding if the court or commission is satisfied the representative caused the costs to be incurred-

  1. (i)
    because the representative encouraged the represented party to start, continue or respond to the proceeding and it should have been reasonably apparent to the representative that the person had no reasonable prospect of success in the proceeding; or
  1. (ii)
    because of an unreasonable act or omission of the representative in connection with the conduct or continuation of the proceeding.
  1. (3)
    The court or commission may order a party to pay another party an amount reasonably payable to a person who is not a lawyer, for representing the other party.
  1. [10]
    The Applicant relies upon s 545(2)(a) of the IR Act.
  1. [11]
    Rule 70 of the Industrial Relations (Tribunals) Rules 2011 (the Rules) provides:

70 Costs

  1. (1)
    This rule applies if the court or commission makes an order for costs under section 545 of the Act.
  1. (2)
    The court or commission, in making the order, may have regard to -
  1. (a)
    for a proceeding before the commission - the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2; or

 (b) for a proceeding before the court or the full bench - the costs payable on the scale of costs for the Supreme Court and District Court under the Uniform Civil Procedure Rules 1999, schedule 1; or

 (c) any other relevant factor.

  1. (3)
    The court may order that costs be assessed by the registrar and, in assessing costs, the registrar may have regard to the Uniform Civil Procedure Rules 1999, chapter 17A.

Applicant's Submissions

Background

  1. [12]
    The Applicant relied upon the content of an affidavit deposed on 16 October 2019 by Daniel Chen, Lawyer who acted for them in the substantial proceedings and reproduced at paragraph five of the decision.

 Relevant Law

  1. [13]
    The relevant legislation in respect of the costs application had also been previously mentioned in this decision being:
  • s 545(2)(a)(i) and (ii) of the Act; and
  • r 70 of the Rules.
  1. [14]
    At the time of the Respondent's dismissal her annual salary was $66,891.00 and the amount sought by her in the substantive proceedings was $33,445.50, being twenty-six (26) weeks' payment as compensation for the termination of her employment.

Applicant's Case

  1. [15]
    In the matter of Kanan v Australian Postal and Telecommunications Union (Kanan) it had been noted by Wilcox J that:

 It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.  If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause".  But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.[8] (emphasis added by Applicant)

  1. [16]
    On the Respondent's own version of the facts the application for reinstatement had been without substantial prospects of success having regard to the following facts in that the Respondent knew or ought to have known:
  • she was required to comply with the Applicant's Code of Conduct, given the numerous informal and formal warnings issued to her by the Applicant;
  • the employment was ultimately terminated for her failure to comply with the Code of Conduct;
  • there was no evidence at the commencement of the proceedings to support the assertion that other employees had "corroborated" against her in an attempt to have her employment terminated;
  • changes to her position description had little or no material impact on her and no relevance to her termination of employment;
  • continuing to argue the Deed of Settlement offered by the Applicant on 20 October 2017 had little merit on the basis that:
  • on 12 January 2018 Local Government Workcare (LGW) had determined the offering of the Deed of Settlement constituted reasonable management action;
  • a review of the LGW decision on 21 May 2018 affirmed the offering of the Deed of Settlement constituted reasonable management action; and
  • in any event, the Deed of Settlement was irrelevant to the application for reinstatement.
  • the assertion that Caitlin Noble (Noble), Employee Relations Manager had falsified a written warning was without any basis in that this assertion was ultimately determined to be "spurious in nature";
  • the assertion that the Applicant had failed to comply with the Staff Grievance Resolution Procedure was without merit; and
  • she had been afforded procedural fairness and natural justice at all times.
  1. [17]
    The Respondent on her own version of the facts, had no substantial prospects of success at the time it was instituted and therefore without reasonable cause consistent with the decision in Kanan.

Doomed to Fail

  1. [18]
    In the matter of the State of Queensland (Department of Justice and Attorney-General, Queensland Corrective Services) v Timmins (No 2)[9] which dealt with an application for costs, the Commission had accepted that "without reasonable cause" may include circumstances where "an appeal is brought to the Commission on a footing which is misconceived and doomed to fail, costs should follow the event".  The substantive application appeared to relitigate a WorkCover claim that had been rejected twice which required different considerations to a reinstatement application.  This was notwithstanding the Respondent's express acknowledgement she was familiar with the relevant criteria of an application for reinstatement and therefore having regard to that, in the circumstances, the application was doomed to fail and supports an inference the application was commenced without reasonable cause.

Respondent's unreasonable refusal of settlement offers

  1. [19]
    In the State of Queensland (South West Hospital and Health Service) v Crews-Bradley[10] which was an application for costs based on an unreasonable act of refusing a settlement, it was accepted that such a refusal may weigh in favour of an order for costs.  The decision relied upon comments made by Williams C in Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions :

 failure to accept the offer of settlement involved the continuation of proceedings in wilful disregard of known facts and also was an imprudent refusal of an offer to compromise and this delinquent conduct warrants the Commission exercising its discretion to award indemnity costs.[11] (emphasis added by Applicant)

  1. [20]
    Offers of settlement were made in the following terms:
  • on 11 December 2018 an offer of eight weeks' gross pay in addition to the Respondent being informed that the Applicant would seek a costs order.  On 19 December 2018 the Respondent rejected the settlement offer and proposed a counter offer of twenty weeks' gross pay; and
  • on 21 December 2018 following the disclosure of documents to be relied upon by the Applicant in the substantive proceedings, another offer of settlement was made in the form of twelve weeks' gross pay and again advised of the intention to seek a costs order.  The Respondent on 4 January 2019 rejected the settlement offer and restated her previous counter offer of twenty weeks' gross pay.
  1. [21]
    The refusal of the settlement offers by the Respondent were an unreasonable act on the basis that:
  • at the time of refusing the settlement offer she knew or ought to have known the facts that were to be relied upon by the Applicant;
  • at the time of refusing the second settlement offer which was considerably more generous, the Respondent was in possession of the Applicant's evidence that was intended to be relied upon by the Applicant; and
  • notice was given to the Respondent that costs would be sought in the event she failed to secure a more beneficial outcome than the settlement offers.
  1. [22]
    There ought to be a conclusion reached by the Commission that the unreasonable demand by the Respondent for twenty weeks' gross pay for settlement of her application weighs in favour of costs being awarded against the Respondent.  In the matter of Marriage v Devine Ltd, it was stated by Asbury C, that:

 It is also the case, as was pointed out by Commissioner Blades in Reilly v Coco's Trading Pty Ltd (No 2) (2003) 173 QGIG 669 at 670, that parties who make unreasonable demands for settlement can expect to have costs awarded against them.  This decision was upheld on appeal by President Hall:  Coco's Trading Pty Ltd v Reilly [2003] QIC 151; (2003) 174 QGIG 102.[12] (emphasis added by Applicant)

Conclusion

  1. [23]
    The application for reinstatement was commenced without reasonable cause, given it had no substantial prospects of success and the fact the Respondent also engaged in an unreasonable act by refusing the Applicant's settlement offers, the application for a costs order incidental to the reinstatement application should be granted.
  1. [24]
    The costs sought were identified as follows:

1

Application in existing proceeding regarding legal representation (Hearing dates on 5 and 16 April 2019)

$   626.20

2

Effecting disclosure, preparing list of documents and making copies of documents

$   730.00

3

Preparing for trial with no settlement conference (and no Counsel at trial)

$3,363.00

4

Appearance by Solicitor at Hearing without Counsel on 18 June 2019 (first day of hearing)

$1,530.00

5

Appearance by Solicitor at Hearing without Counsel on 19 June 2019 (subsequent day of hearing)

$1,049.00

6

Appearance by Solicitor at Hearing without Counsel on 20 June 2019 (subsequent day of hearing)

$1,049.00

7

Application in existing proceeding for costs

$   626.20

 

TOTAL COSTS CLAIMED BY THE APPLICANT

$8,973.40

Respondent's Submissions

  1. [25]
    It was the Respondent's understanding that in respect of her reinstatement application each party would bear their own costs pursuant to s 545(1) of the Act.
  1. [26]
    At the time "without prejudice save as to costs" settlement offers were made, the Respondent as a self-represented litigant, had not been made aware of Chapter 9, Part 5 of the Uniform Civil Procedure Rules 1999 (UCPR) or the consequences and implications in not accepting a settlement offer.  The settlement offers had not contained a reference to Chapter 9, Part 5 of the UCPR stating only:

 The Council wishes to note that it will incur significant financial costs in defending your application.  Should it eventuate that your application was brought vexatiously, without reasonable cause, without reasonable prospects of success, or you obtain a result that is less beneficial than this offer, you are put on notice that the Council intends to rely on this offer to seek a costs order against you.

The Applicant had failed to meet their professional obligations in not complying with the statutory requirements concerning the contents of the settlement offer documents.

  1. [27]
    The Applicant's incompetence in presenting ineffective offers had caused prejudice to the Respondent who as a self-represented litigant may have made a different decision should all of the information been disclosed.  The failure of the Applicant to satisfy the statutory requirement of s 353(3) of the UCPR had given rise to the Respondent's unawareness and subsequent non-compliance with the provisions contained at s 357(3) of the UCPR as evidenced in the hearing.
  1. [28]
    Notwithstanding the "without prejudice save to costs" settlement offer (dated 11 December 2018) was open for acceptance for a period of 10 days only and therefore failed to meet the statutory requirement pursuant to s 355(1) of the UCPR of being open for not less than 14 days.
  1. [29]
    In accordance with s 545(2) of the Act, the Respondent's reinstatement application had not been made vexatiously or without reasonable cause and it was not apparent to her that the application had no reasonable prospects of success.  The matters raised within the reinstatement application were legitimate workplace concerns that had led to the unfair termination of employment.  Although the final order made by the Commission was not in the Respondent's favour, she had the right to have her unfair termination application heard.
  1. [30]
    The Respondent is currently unemployed with an income protection benefit due to expire in January 2020.  The current state of her health was preventing the acceptance of a place at the University of Sunshine Coast having deferred the offer for six months.  It was likely that she would be seeking some form of casual work in the interim.
  1. [31]
    The Respondent would be unable to pay the Applicant's legal costs and as she could not return to full time work, it would not be possible to be approved for a bank loan.  If orders were to be made requiring her to pay such legal costs it would cripple her financial position.

Applicant's Submissions in Reply

Uniform Civil Procedure Rules

  1. [32]
    The assertion of the Respondent that the settlement offers made by the Applicant were non-compliant with the UCPR because they failed to state the offers were made under Chapter 9 Part 5 of the UCPR and gave rise to the Respondent's "unawareness and subsequent non-compliance" was improbable.

Offers to settle

  1. [33]
    The "without prejudice" offer (dated 11 December 2018) informed the Respondent in unambiguous terms that the Applicant "considers the offer to be reasonable in the circumstances as it fully complied with all obligations in relation to [the Respondent's] dismissal . . . the [Applicant] therefore considers [the Respondent's] application to have no reasonable prospects of success".  The first offer went on to inform the Respondent of the intention to rely on s 545 of the IR Act to seek a costs order.
  1. [34]
    The second offer again "without prejudice" put the Respondent on notice of the intention to rely upon the offer to seek a costs order against her making it difficult to accept the assertion she was unaware of the "consequences and implications" of not accepting a settlement offer.
  1. [35]
    It had been open for the Respondent to have sought further legal advice in responding to the first and second offers however she chose not to do so.

Without Reasonable Cause

  1. [36]
    The Applicant maintained the position that it should have been reasonably apparent to the Respondent that her application for reinstatement had been made without reasonable cause and/or had no reasonable prospects of success for reasons previously outlined and it was known or ought to have been known by her that the Applicant had:
  • multiple concerns, over a period of time, relating to her conduct;
  • provided her with multiple opportunities to respond to claims relating to her conduct;
  • issued multiple warnings relevant to her conduct;
  • allowed ample time for the conduct to improve; and
  • provided full procedural fairness.
  1. [37]
    It had been established that the application for reinstatement had been made without reasonable prospects of success.

Quantum of Costs

  1. [38]
    The Respondent appears to be asserting that her impecunious state should weigh against an order for costs.  In this regard, the Applicant:
  • claims costs, strictly confined to the Scale of Costs pursuant to the UCPR; and
  • does not seek to have costs assessed or agitate for indemnity costs to be paid.
  1. [39]
    The Commission was requested to take the above into consideration pursuant to r 70 of the Rules.

Conclusion

  1. [40]
    The Respondent, based on the facts at the time of instituting the proceedings should have known she was making erroneously a quasi-WorkCover application as opposed to an application for reinstatement.  In any event, she knew she lacked the evidentiary basis for the majority of her assertions and proceeded on the basis of her "workplace concerns".
  1. [41]
    The Applicant accepts that proceedings commenced without reasonable cause or reasonable prospects of success may only be deemed as such with the benefit of hindsight.  In this regard, the Applicant relied upon comments made in Walters v BT Equipment Pty Ltd (No 2) (Walters) where a Full Bench of the Commission noted the following:

 A conclusion that the application was not arguable may only be reached by basking in the wisdom of hindsight.[13]

  1. [42]
    In the circumstances the considerations that should have been reasonably apparent to the Respondent distinguishes her application from matters such as Walters.
  1. [43]
    Costs should be awarded in favour of the Applicant.

Conclusion

Background

  1. [44]
    On 17 September 2019 the Commission (as constituted) released a decision in which an application for reinstatement (by the Respondent in these proceedings) was refused.  In doing so, the Commission found that:
  • the allegations relevant to the conduct engaged in by Alderton were reasonably open to be substantiated by the decision maker;
  • the disciplinary process engaged in by the decision maker had been compliant with the legislative and policy procedures relevant to the circumstances with Alderton being afforded procedural fairness and natural justice at all times;
  • the penalty of termination was warranted in circumstances where the conduct and behaviour displayed by Alderton over an extensive period of time had breached the Council's Code of Conduct;
  • the decision to terminate Alderton's employment effective from 22 March 2018 was not harsh, unjust or unreasonable; and
  • the application for reinstatement is refused.[14]

General Powers to award costs

  1. [45]
    In the course of the substantive proceedings the Applicant (in this proceeding) foreshadowed the filing of an application for costs pursuant to s 545(2) of the Act that was subsequently lodged with the Industrial Registry on 16 October 2019.
  1. [46]
    In essence the Applicant relied upon the conduct of the Respondent in the substantive matter which was said to have enlivened s 545(2)(a)(i) and (ii) of the Act in that:
  1. (i)
    the party made the application or responded to the application vexatiously or without reasonable cause; or
  1. (ii)
    it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success . . .
  1. [47]
    With regard to "reasonable cause" it was argued that on her own version of the facts it was the case that the reinstatement application was without substantial prospects of success as there has been a range of informal and formal warnings given over a period of time regarding the failure to comply with the Code of Conduct, and the claim that other employees had "corroborated" against her to bring about the termination of her employment was not supported by any evidence to that effect.
  1. [48]
    Other matters relied upon in the prosecution of the reinstatement application were clearly of no relevance in establishing the termination had been harsh, unjust or unreasonable and this was known to the Respondent at the time of commencing the action against the employer.  These included:
  • changes to her position description which had no material impact on her employment and were not associated with the termination;
  • the offer of a "without prejudice" Deed of Settlement to exit the employment in October 2017 which had been found to be reasonable management action in another place;
  • the claim that the Employee Relations Manager had falsified a written warning without any reason, which was ultimately determined to be "spurious in nature"; and
  • she had not been offered procedural fairness and natural justice which was not the case.
  1. [49]
    The matter of Kanan was relied upon to support the proposition that in testing whether a proceeding was instituted "without reasonable cause" it was important to take into account the position of the Respondent at the time, with Wilcox J stating:

 But where, on the applicant's own version of facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.[15]

  1. [50]
    The Applicant further relied upon the matter of State of Queensland (Department of Justice and Attorney-General, Queensland Corrective Services) v Timmins (No 2)[16] where the Commission accepted that "without reasonable cause" may include circumstances where a matter was brought to the Commission "on a footing which is misconceived and doomed to fail, costs should follow the event".
  1. [51]
    The Respondent argued that the application for reinstatement had not been made vexatiously or without reasonable cause and it was not apparent to her that no reasonable prospects of success existed.  In her view the matters raised were legitimate workplace concerns that led to the unfair termination of her employment.
  1. [52]
    As a self-represented litigant the conduct of the application for reinstatement by the Respondent appeared to suffer due to an obvious lack of expertise and the knowledge of what was required to prosecute such an application, despite having informed the Commission in an earlier hearing that she was "very familiar" with a guide on the QIRC website regarding unfair dismissals.  Nevertheless, in the course of the substantive proceedings, the Commission was prompted to make the following comment:

COMMISSIONER:  And Ms Alderton's brought a lot of material to the Commission about her WorkCover matter that's not - it's really not of any benefit to her, the case she prosecutes for long service leave - for - sorry - termination, in terms of that.  And, I mean, whatever Local Government Workcare decide in relation to what's reasonable or not reasonable management action doesn't affect what the Commission - can't impact on what the Commission finds in terms of what occurred with her termination.[17]

  1. [53]
    I am not satisfied that the application for reinstatement had been made vexatiously or without reasonable cause even though the Applicant identified and relied upon a number of factors that pointed to significant difficulties a person would have prosecuting such an application in those circumstances.  It was in my view reasonable for an employee with more than 10 years' service with an employer to be in the first instance aggrieved with a decision to end such employment and to mount a challenge questioning the soundness of the decision.
  1. [54]
    Once the application for reinstatement was made the requirement for a conference to be held pursuant to s 318(1) of the Act was fulfilled with the Commission Member issuing a written certificate indicating that the matter was unlikely to be settled by conciliation.  The conference was held on 8 May 2019.
  1. [55]
    It is evident that the parties, following the conciliation conference, continued to engage in dialogue around the application resulting in two offers being made by the Applicant to settle the application on 11 and 21 December 2018, respectively.  Each offer was made on a "Without prejudice save as to costs basis".
  1. [56]
    The offer of 11 December 2018 was made to "settle the ongoing dispute (and avoid further litigation)" on the following basis:
  • On a purely commercial basis and without admission of liability whatsoever the Council agrees to settle the ongoing dispute with you;
  • The Council will pay you eight (8) weeks' gross salary subject to taxation liability in full satisfaction of any existing or potential disputes;
  • The Council will provide you a Statement of Service; and
  • The Council and you will enter into a Deed of Release and Settlement on the usual terms, including but not limited to confidentiality and non-disparagement terms.
  1. [57]
    The offer remained open until 5.00 pm on Friday 21 December 2018 and was formally rejected by the Respondent in correspondence (dated 19 December 2018) with a counter offer being proposed of "not less than twenty (20) weeks' gross salary in order to settle this unfair dismissal matter".
  1. [58]
    The refusal of the offer was made in circumstances where the Applicant had informed the Respondent of the following:

The Council considers the offer to be reasonable in the circumstances as it has fully complied with all obligations in relation to your dismissal as was apparent at the Conciliation Conference.  The Council therefore considers your application to have no reasonable prospects of success.

The Council wishes to note that it will incur significant financial costs in defending your application.  Should it eventuate that your application was brought vexatiously, without reasonable cause, or without any reasonable prospect of success, the Council intends to rely on s 545 of the IR Act to seek a costs order against you.

  1. [59]
    The offer of 21 December 2018 was made following the Applicant's rejection of the counter offer of "not less than twenty (20) weeks' gross salary" and included the following terms:
  • On a purely commercial basis and without admission of liability whatsoever the Council agrees to settle the ongoing dispute with you;
  • The Council will pay you twelve (12) weeks' gross salary subject to taxation liability in full satisfaction of any existing or potential disputes;
  • The Council will provide you a Statement of Service; and
  • The Council and you will enter into a Deed of Release and Settlement on the usual terms, including but not limited to confidentiality and non-disparagement terms.
  1. [60]
    The offer remained open until 5.00 pm on Friday 4 January 2019 and in this case reference was made to the fact that the Respondent had been paid four weeks' pay in lieu of notice at the time of termination as a gesture of goodwill.  The position of the Applicant in respect of their previous advice to seek a costs order if the Respondent was to "obtain a result that is less beneficial than this offer" was reiterated.
  1. [61]
    The offer was formally rejected by the Respondent in correspondence (dated 4 January 2019) and the previous counter offer of not less than twenty (20) weeks' gross pay was again presented as being required to settle the reinstatement application.
  1. [62]
    The effect of the 21 December 2018 offer was to increase the compensation on offer to twelve (12) weeks' gross salary and as required by s 322(3) of the Act was to be considered in circumstances where the four (4) weeks in lieu of notice payment was to be taken into account.
  1. [63]
    The rejection of the final offer to settle the application was made in circumstances where the Respondent was aware of the material to be relied upon by the Applicant to defend the application for reinstatement and where she had been put on notice that should a result be obtained where it was less beneficial than the offer, a costs order would be sought.
  1. [64]
    The Respondent sought to discredit the offer by suggesting that the Applicant had omitted relevant information about the UCPR and that the offer had subsequently failed to particularise certain requirements in relation to offers to settle matters.
  1. [65]
    Unfortunately for the Respondent, the UCPR has no application to proceedings in the Commission with r 3 of the UCPR specifying:
  1. (1)
    Unless these rules otherwise expressly provide, these rules apply to civil proceedings in the following courts -
  • the Supreme Court
  • the District Court
  • Magistrates Courts.
  1. (2)
    In a provision of these rules, a reference to "the court" is a reference to the court mentioned in subrule (1) that is appropriate in the context of the provision.

The only role for the UCPR in proceedings in the Commission is identified at r 70 of the Rules and relates to the Commission having regard to the scale of costs contained within the UCPR.

  1. [66]
    The argument of the Respondent around the UCPR in this proceeding was without foundation.
  1. [67]
    On the material available to the Commission, I am satisfied that the Applicant had established subject to the requisite standard of proof, that it ought to have been apparent to the Respondent that at 21 December 2018 the application had no reasonable prospect of success.  This ultimately proved to be the case with the refusal of the reinstatement application by the Commission.
  1. [68]
    The conduct of the Respondent to refuse to accept the offer of 21 December 2018, which was effectively sixteen (16) weeks' gross salary, must be seen in the circumstances where she had not sought reinstatement in the substantive proceedings stating:

I can't return to my employment with Council … It's not a healthy employment option for me.[18]

The compensation sought in the substantive hearing was the maximum provided pursuant to s 322(2)(a) of the Act, being six (6) months' wages, higher than the previous claim of twenty (20) weeks and in the circumstances was beyond reasonable.

  1. [69]
    In the matter of O'Reilly v Coco's Trading Pty Ltd, it was stated by Blades C that:

 . . . parties who make . . . unreasonable demands for settlement can expect to have costs awarded against them . . ..[19]

  1. [70]
    The issue of refusal of an offer to settle was addressed in the matter of Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions (Ferry) where Williams C stated:

 In the circumstances of this case I am satisfied that Mr Ferry's failure to accept the offer of settlement involved the continuation of proceedings in wilful disregard of known facts and also was an imprudent refusal of an offer to compromise and this delinquent conduct warrants the Commission exercising its discretion to award indemnity costs under section 400A of the Act.[20] (Emphasis added)

  1. [71]
    The conduct of the Respondent is not so far removed from that of Ferry to exclude her from a costs order, particularly when in the view of the Commission the offer (dated 21 December 2018) was for all intents and purposes appropriate to resolve the matters of contention between the parties.
  1. [72]
    Further, in relation to an order for costs in the matter of Latoudis v Casey, it was said by McHugh J:

 The rationale of the order is that it is just and reasonable that the party who has caused the other party to incur the costs of litigation should reimburse that party for the liability incurred.  The order is not made to punish the unsuccessful party.  Its function is compensatory.[21]

Self-Represented Litigant

  1. [73]
    With regard to the reliance by the Respondent on her status as a self-represented litigant in the proceedings to be considered when assessing her conduct in the substantive proceedings, I adopt the approach in Gambaro v Workers' Compensation Regulator where Martin J stated:

Although the appellant is unrepresented, this does not excuse his noncompliance.  A lack of legal representation is a misfortune, not a privilege.  In Robertson v Hollings, Keane JA (with whom Fraser JA and Cullinane J agreed) said:

'[L]itigation is not a learning experience.  The courts do not permit litigants, even unrepresented litigants, to prosecute claims which cannot proceed fairly to the other parties.  It is no doubt unfortunate for Mrs Robertson that she does not have the benefit of competent legal advice and representation; but her misfortune in this regard does not license her to proceed unconstrained by the rules according to which adversarial litigation is conducted'.[22]

Quantum of Costs

  1. [74]
    The quantum sought in regard to the costs order is not as such indemnity costs, but costs assessed under the UCPR scale, which in the view of the Commission was a more than sensible claim.

Capacity to pay

  1. [75]
    There was a submission by the Respondent regarding the capacity to pay any legal costs that may be ordered against her.  Similar arguments were addressed in Blackwood (Workers' Compensation Regulator) v Chapman where Neate C stated:

Mr Chapman appeared on his own behalf at the hearing.  He explained his very difficult financial and health circumstances, and contended that the enforcement of an order in the amount sought might lead to his bankruptcy.  The Regulator acknowledges that Mr Chapman is in difficult financial circumstances, and required no additional evidence from him in relation to that matter.  Mr Chapman sought a degree of compassion from the Commission in making any orders in relation to the present application.

The Regulator submits that, in light of the general principles about costs set out in judicial decisions, Mr Chapman's financial circumstances are not a relevant consideration for the Commission to take into account in determining whether to make the orders sought by the Regulator.

Having heard from the Regulator's representative and Mr Chapman, I am satisfied that the Regulator is entitled to an order for costs in the amount sought.  However, I would urge the Regulator, when considering whether, when and in what manner to enforce the order, to have regard to Mr Chapman's present and reasonably foreseeable financial and personal circumstances.[23]

  1. [76]
    Whilst I accept the reasoning of Neate C regarding the granting of a costs application against a person who had raised issues around the capacity to pay such costs, I do not in this case "urge" the Applicant to undertake any specific path regarding the enforcement of the subsequent order, leaving the matter solely at their discretion.
  1. [77]
    It is the intention of the Commission to grant the application for costs as sought by the Applicant for the reasons contained in this decision.

Orders

  1. [78]
    The Commission orders as follows:
  • The application for costs is granted.
  • The Respondent is to pay the Applicant's costs as follows:
  1. (i)
    Application for reinstatement (TD/2018/40) being $8347.20; and
  1. (ii)
    Application in existing proceedings being $626.20.

Footnotes

[1] Alderton v Fraser Coast Regional Council [2019] QIRC 137.

[2] ibid.

[3] Kanan v Australian Postal and Telecommunications Union (1992) FCA 366, 43 IR 257.

[4] State of Queensland (South West Hospital and Health Service) v Tania Crews-Bradley [2016] QIRC 093.

[5] Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions [2016] FWC 3120, [75].

[6] Alderton v Fraser Coast Regional Council [2019] QIRC 137.

[7] Alderton v Fraser Coast Regional Council [2019] QIRC 058.

[8] Kanan v Australian Postal and Telecommunications Union (1992) FCA 366, 43 IR 257.

[9] State of Queensland (Department of Justice and Attorney-General, Queensland Corrective Services) v Timmins (No 2) [2018] QIRC 117, [27].

[10] State of Queensland (South West Hospital and Health Service) v Crews-Bradley [2016] QIRC 093.

[11] Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions [2016] FWC 3120.

[12] Marriage v Devine Ltd [2005] 178 QIRC 118.

[13] Walters v BT Equipment Pty Ltd (No 2) [2002] 169 QGIG 227.

[14] Alderton v Fraser Coast Regional Council [2019] QIRC 137.

[15] Kanan v Australian Postal and Telecommunications Union (1992) FCA 366, 43 IR 257.

[16] State of Queensland (Department of Justice and Attorney-General, Queensland Corrective Services) v Timmins (No 2) [2018] QIRC 117

[17] T5-12, L29-35.

[18] T4-41, L35-39.

[19] O'Reilly v Coco's Trading Pty Ltd [2003] 173 QGIG 337

[20] Colin Ferry v GHS Regional WA Pty Ltd T/A GHS Solutions [2016] FWC 3120, [75].

[21] Latoudis v Casey [1990] 170 CLR 534.

[22] Gambaro v Workers' Compensation Regulator [2017] ICQ 005, [14].

[23] Blackwood (Workers' Compensation Regulator) v Chapman [2015] QIRC 086, [13]-[15].

Close

Editorial Notes

  • Published Case Name:

    Fraser Coast Regional Council v Alderton

  • Shortened Case Name:

    Fraser Coast Regional Council v Alderton

  • MNC:

    [2020] QIRC 1

  • Court:

    QIRC

  • Judge(s):

    Thompson IC

  • Date:

    08 Jan 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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