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[2019] FWC 1891
General information, not legal advice.
Fair Work Commission
2019-03-26
Original judgment source is linked above.
s.401 - Application for costs orders against lawyers and paid agents
Unfair dismissal claim - application for costs - ss. 400A, 401 and 611 - conduct of party in unfair dismissal proceedings and their representative's conduct - consideration of without reasonable cause, no reasonable prospects of success and unreasonable act or omission - application for costs refused.
[1] This Decision is made in respect to an application for costs that was made pursuant to ss. 400A, 401 and 611 of the Fair Work Act 2009 (the Act). The costs application was made on 4 October 2018, by HCL Australia Services Pty Limited T/A HCL (HCL or the employer). The application for costs named two respondents; Gautam Amba (the employee or Mr Amba or the first respondent); and Brett Wilson (Mr Wilson or the second respondent).
[2] It should be noted that Mr Wilson is the principal of Adams Wilson Lawyers who, for a period of time, acted for Mr Amba in respect of his unfair dismissal application taken against HCL. On 30 April 2018, prior to the Hearing of Mr Amba's unfair dismissal matter that had been scheduled for 4 May 2018, Adams Wilson Lawyers filed a Notice of Representative Ceasing to Act. In accordance with the requirements of s. 402 of the Act, the costs application was made within 14 days after the originating unfair dismissal application was determined by the Fair Work Commission (the Commission).
[3] On 29 January 2018, Adams Wilson Lawyers filed an Unfair Dismissal Application (Form F2) on behalf of Mr Amba, who had been dismissed from employment with HCL on 9 January 2018. Attempts to reach a conciliated settlement of the unfair dismissal claim were unsuccessful, and the matter proceeded to arbitration that was conducted over two days on 4 May and 28 June 2018.
[4] At a Pre-Hearing Conference held on 9 March 2018, both Mr Amba and HCL sought and were granted permission pursuant to s. 596 of the Act to be represented by lawyers or paid agents. Subsequently, following the filing by Adams Wilson Lawyers of a Notice of Representative Ceasing to Act, the applicant appeared unrepresented at the Hearing of his claim for unfair dismissal remedy. The unfair dismissal claim was dismissed in a Decision (the unfair dismissal Decision) [2018] FWC 5786, issued by the Commission on 20 September 2018.
[5] The subsequent application for costs made by HCL was the subject of Mention and Directions proceedings held on 19 October 2018, at which time the Commission issued Directions that required the Parties to file and serve their respective evidence and other materials on the issue of costs in accordance with a timetable that required the Parties to advise the Commission by 10 December 2018, as to whether a formal Hearing was required or alternatively, whether the issue of costs could be determined upon the filed documentary material. On 10 December 2018, the Commission received communications from each of the Parties, HCL, Mr Amba and Mr Wilson, in which each advised the Commission that the issue of costs could be determined on the filed documentary material.
[6] The application for costs indicated that it was made under ss. 400A, 401 and 611 of the Act, and it was taken against two respondents, Mr Amba and Mr Wilson.
[7] The application for costs, as it was taken against Mr Amba, involved three limbs. Firstly, the application for costs asserted that Mr Amba had made the unfair dismissal application without reasonable cause in satisfaction of subsection 611 (2) (a) of the Act. Secondly, the application for costs asserted that it should have been reasonably apparent to Mr Amba that his unfair dismissal application had no reasonable prospects of success, and thus satisfied subsection 611 (2) (b) of the Act. The third limb of the application for costs taken against Mr Amba identified grounds reliant upon s. 400A (1) of the Act. Specifically, in this limb of the application for costs it was asserted that Mr Amba caused costs to be incurred by HCL because of an unreasonable act or omission in connection with the conduct or continuation of his unfair dismissal claim.
[8] The application for costs, as it was taken against Mr Wilson, identified two limbs upon which it was pursued. Firstly, it was asserted that Mr Wilson encouraged Mr Amba to start and continue his unfair dismissal application where it should have been reasonably apparent that Mr Amba had no reasonable prospects of success in the matter, and thus subsection 401(1A) (a) of the Act was said to have been satisfied. Secondly, the application for costs taken against Mr Wilson asserted that he had failed to advise Mr Amba to discontinue the unfair dismissal application and this failure represented an unreasonable act of Mr Wilson in connection with the conduct or continuation of the matter and in satisfaction of subsection 401(1A) (b) of the Act.
[9] HCL filed evidence in support of its application for costs in the form of a witness statement of Adam Lunn dated 3 December 2018. Mr Lunn is a Partner of the law firm Mills Oakley who have acted for HCL throughout proceedings related to the unfair dismissal claim made by Mr Amba.
[10] The submissions made on behalf of HCL in support of its application for costs, firstly asserted that Mr Amba's unfair dismissal application was made without reasonable cause and/or that it should have been reasonably apparent to Mr Amba that the application had no reasonable prospect of success in satisfaction of s. 611 of the Act. It was submitted on behalf of HCL, that the facts known to Mr Amba at the time of instituting the unfair dismissal proceedings meant that he knew or should have known, that the unfair dismissal claim had no substantial prospect of success.
[11] In support of this submission, HCL referred to, inter alia, evidence involving the advice that Mr Amba had received from Mr Wilson in which particular aspects of identified difficulty with any potential success of any unfair dismissal claim had been discussed. In this regard, the submissions made by HCL emphasised that Mr Amba had resigned from his employment, and there was potentially no financial remedy that could be provided even if the unfair dismissal claim was successful. In addition, HCL submitted that an examination of various communications including material provided in the employer's response Form F3, and various letters and emails that were communicated to Mr Amba, established the futility of Mr Amba's intention to assert that his dismissal was harsh, unjust or unreasonable, and this would have been apparent to him.
[12] The submissions made on behalf of HCL also asserted that Mr Amba's ongoing failure to discontinue his unfair dismissal application after he had participated in conciliation proceedings, and after he had been provided with numerous repeated communications from the lawyers acting on behalf of HCL which invited him to withdraw his claim, represented either deliberate or reckless conduct and amounted to an unreasonable act or admission within the meaning of s. 400A (1) of the Act. According to the submissions made on behalf of HCL, the detailed evidentiary material and legal submissions that had been provided to Mr Amba made it increasingly clear that his dismissal was not harsh, unjust or unreasonable, and his unfair dismissal application was bound to fail. It was submitted that in the circumstances, Mr Amba commenced or continued his unfair dismissal application in wilful disregard of known facts and clearly established law, and therefore he should be Ordered to pay HCL's costs on an indemnity basis.
[13] The further submissions made by HCL asserted that the relevant conduct of Mr Wilson satisfied the requirements of s. 401(1A) of the Act. HCL submitted that Mr Wilson encouraged Mr Amba to start the unfair dismissal application where it should have been reasonably apparent that Mr Amba had no reasonable prospect of success. In support of this submission, HCL referred to particular details of documentary advice that Mr Wilson had provided to Mr Amba in which particular aspects of weakness in respect to the unfair dismissal claim had been identified. According to the submissions made on behalf of HCL, this material demonstrated that at the time of commencing the unfair dismissal application, Mr Wilson should have known that the application was manifestly untenable, or groundless, or so lacking in merit or substance as to be not reasonably arguable.
[14] The HCL submissions further argued that after the making of the application, Mr Wilson gained knowledge during the course of the proceedings which should have led him to the conclusion that it was reasonably apparent that Mr Amba's application had no reasonable prospects of success. In support of this submission, HCL referred to various communications that had been sent by their lawyers to Mr Wilson and which invited the applicant to withdraw his unfair dismissal claim.
[15] The submissions made by HCL also asserted that Mr Wilson committed unreasonable acts or omissions in connection with the conduct or continuation of the matter by commencing the proceedings and maintaining those proceedings against the numerous communications provided to him by the lawyers acting for HCL. HCL submitted that as a qualified lawyer practising in employment and industrial relations matters, it should have been reasonably apparent to Mr Wilson that Mr Amba had no reasonable prospect of success after receiving the documents filed by HCL, and the further correspondence from their solicitors which invited the withdrawal of the claim. Therefore it was submitted by HCL that as a result of Mr Wilson's conduct, HCL had incurred substantial legal costs involving it having to respond to the unfair dismissal application. It was therefore submitted by HCL that Mr Wilson should be Ordered to pay HCL's costs on an indemnity basis.
[16] Mr Amba provided documentary submissions in opposition to HCL's application for costs. The submission material provided by Mr Amba revisited and re-agitated much of the factual material that was examined during the Hearing of his unfair dismissal claim.
[17] The submissions made by Mr Amba mentioned, inter alia, his almost 7 years of employment without identified complaint or other issue. Further, Mr Amba reiterated that he had found it very difficult to respond to concerns that involved an examination of expenses claims that he had made over a 2 year period. Mr Amba also stated that due to certain financial constraints he could not engage Mr Wilson to defend him at the Hearing and therefore he represented himself. Mr Amba submitted that he believed that without a lawyer he did not conduct his case properly, and therefore his unfair dismissal application was dismissed by the Commission.
[18] Mr Amba further submitted that he believed there were plenty of factors which provided basis for reasonable cause and prospects for success of his unfair dismissal claim. Mr Amba said that he was at a disadvantage at the Hearing and that he sincerely believed that his unfair dismissal application had reasonable cause and prospect of success and was not groundless. Mr Amba said that when all of the circumstances were considered, the Commission should find that there was a reasonable basis for commencing the unfair dismissal claim.
[19] Mr Amba made further submissions about what he described as other considerations. In this regard, Mr Amba submitted that he was an employee working on a 457 Visa, and he was the only bread winner for his family who were fully dependent upon him. Mr Amba requested that the Commission consider his position on humanitarian grounds.
[20] In further submissions, Mr Amba said that if a senior lawyer like Mr Wilson felt there was reasonable prospect of success then he believed that it was reasonable for him to bring his case before the Commission. Mr Amba said that he had acted on the advice that he had received from Mr Wilson, and he had attempted to settle the matter, but HCL was never interested in settling the matter.
[21] Mr Amba said that he sincerely submitted and requested that when all of the circumstances were properly considered, the application for a costs Order should be dismissed and no Order should be made as to costs.
[22] The documentary submissions made by Mr Wilson relied upon evidence in the form of his Statutory Declaration dated 12 November 2018. The submissions of Mr Wilson opposed the application for costs as it was taken against him and made under s. 401 of the Act. The submissions of Mr Wilson asserted that there was no basis to establish conduct on his part that satisfied the requirements of subsection 401(1A) of the Act.
[23] Mr Wilson submitted that in respect to paragraph (a) of subsection 401(1A) of the Act, there was no basis to establish that his conduct caused HCL to incur costs or that he encouraged Mr Amba to start or continue the unfair dismissal application, or that at any time, it should have been reasonably apparent to him that Mr Amba's application had no reasonable prospects of success. Further, in respect of paragraph (b) of subsection 401(1A) of the Act, Mr Wilson submitted that he had not committed an unreasonable act or omission in not encouraging Mr Amba to discontinue the application, and/or doing things that progressed the application for unfair dismissal remedy.
[24] The submissions made by Mr Wilson asserted that he and his law firm do not encourage potential clients to start, continue, or respond in any particular matter or proceeding. Specifically, Mr Wilson said that at no time was Mr Amba encouraged to commence or continue his unfair dismissal application.
[25] In respect to the issue of whether Mr Amba's unfair dismissal application had reasonable prospects of success, Mr Wilson submitted that there were particular aspects of Mr Amba's employment including his exemplary employment record which provided support for his application to succeed. Mr Wilson said that a matter is not without reasonable cause simply because it failed. Mr Wilson submitted that Mr Amba's application was arguable and that there were procedural aspects, including the way in which Mr Amba had been treated which were clearly unreasonable. Consequently, there was no basis to establish that Mr Wilson should have known that the application was manifestly untenable or groundless and therefore it was not made without reasonable prospect of success.
[26] The further submissions made by Mr Wilson addressed the assertion that his conduct involved an unreasonable act or omission in connection with the conduct or continuation of Mr Amba's unfair dismissal claim. Mr Wilson submitted that it could only have been reasonably apparent to him that the basis for the failure of Mr Amba's claim involving his dishonest expenses claims, had no reasonable prospect of success once it had been properly tested. Mr Wilson submitted that it was relevant to note that HCL had asserted that Mr Amba had falsely made expenses claims of $85,000.00, and this was established by the Commission to have been an erroneous proposition.
[27] In summary, the submissions made by Mr Wilson asserted that the matters relied upon by HCL in submitting that Mr Wilson should pay their costs, were not matters that were relevant to the determination of the Commission. It was submitted that it was only in his cross examination that Mr Amba gave responses that contradicted his evidence in chief, and the instructions that he had given to Mr Wilson. Mr Wilson submitted that the costs application, to the extent that it was taken against him, failed in respect of both paragraph (a) and (b) of subsection 401(1A) of the Act. The submissions made by Mr Wilson urged that the application against him should be dismissed with costs.
[28] There are a number of different sections of the Act which deal with costs. In this instance the application for costs, as set out in the initiating Form F6, was made under ss. 400A, 401, and 611 of the Act. Further, in this case the application for costs was taken against two respondents. The first respondent, Mr Amba, was the applicant in the initial unfair dismissal proceedings, and his legal representative, Mr Wilson, is the second respondent to the application for costs. The application for costs, in so much as it was taken against Mr Amba, relies upon the terms of ss. 400A and 611 of the Act, and in respect to Mr Wilson, it is s. 401 of the Act that provides basis for the application for costs to be pursued.
[29] The Commission may make a costs Order against a Party in respect to an unfair dismissal claim if any of the terms of either ss. 400A or 611 have been satisfied. Relevantly, these two sections of the Act are in the following terms:
(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
(1) A person must bear the person's own costs in relation to a matter before the FWC.
(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:
(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or
(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.
Note: The FWC can also order costs under sections 376, 400A, 401 and 780.
(3) A person to whom an order for costs applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1)."
[30] The Commission may also make a costs Order against lawyers or paid agents who have a representative role in unfair dismissal proceedings if the terms of s. 401 of the Act have been satisfied. Section 401 of the Act is in the following terms
"401 Costs orders against lawyers and paid agents
(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."
[31] In this case, for the application for costs to be granted in respect to Mr Amba, the terms of either ss. 400A or 611 of the Act have to be met, and in respect of Mr Wilson, the terms of s. 401 of the Act have to be satisfied.
[32] It is relevant to note that there is some commonality in the terminology that is used by ss. 400A, 401 and 611 of the Act. For instance; subsection 400A (1) and subsection 401(1A) (b) both contain the words; "...an unreasonable act or omission" and "in connection with the conduct or continuation of the matter" and further, subsection 611 (2) (b) and subsection 401(1A) (a) both contain the words; "...reasonably apparent" and "...had no reasonable prospect of success."
"[26] Section 611 sets out a general rule - that a person must bear their own costs in relation to a matter before the Commission (s.611(1)) - and then provides an exception to that general rule in certain limited circumstances. The Explanatory Memorandum confirms this interpretation of the section, it is in the following terms:
2353. Subclause 611(1) provides that generally a person must bear their own costs in relation to a matter before FWA.
2354. However, subclause 611(2) provides an exception to this general rule in certain limited circumstances. FWA may order a person to bear some or all of the costs of another person where FWA is satisfied that the person made an application vexatiously or without reasonable cause or the application or response to an application had no reasonable prospects of success.
2355. A note following subclause (2) alerts the reader that FWA also has the power to order costs against lawyers and paid agents under clauses 376, 401 and 780 which deal with termination and unfair dismissal matters.
2356. Subclause 611(3) provides that a person to whom a costs order applies must not contravene a term of the order.
[27] In the context of s.570 and its legislative antecedents courts have observed that an applicant who has the benefit of the protection of a provision such as s.570(1), (ie the general rule that parties bear their own costs), will only rarely be ordered to pay costs 5 and that the power should be exercised with caution and only in a clear case 6. In our view a similarly cautious approach is to be taken to the exercise of the Commissions powers in s.611 of the FW Act." [emphasis added]
[34] Consequently, it has been well established that there should be a cautious approach taken in respect to any application for costs made under the Act. This caution operates to establish an underlying reluctance to grant any application for costs, and to only do so in instances where a clear case has been made out to satisfy the exceptions to the general rule that each side bear its own costs. Those exceptions are specified in subsections 611 (2) (a) and (b) of the Act, and in the case of a claim for unfair dismissal, also extend to circumstances identified in subsections 400A (1) and 401(1A) of the Act.
[35] In this case, HCL has advanced its application for costs on the basis that particular aspects of the circumstances of the application for unfair dismissal remedy, and the conduct of Mr Amba and his lawyer Mr Wilson, in respect to the proceedings, established basis upon which the exceptions to the general rule that each side bear its own costs, had been established. HCL asserted that the unfair dismissal claim made by Mr Amba was; (a) taken without reasonable cause and/or, (b) that it had no reasonable prospect of success. Further, HCL has asserted that the actions of Mr Amba and Mr Wilson represented unreasonable acts or omissions that caused costs to be incurred by HCL.
Without Reasonable Cause - s. 611 (2) (a) - Mr Amba
[36] On the question of whether the application could be considered to have been taken without reasonable cause, it is important to have regard for the established stringency of the test that must be met to satisfy that a case was taken without reasonable cause. In numerous Judgements and Decisions there have been various descriptions used to characterise the test required for a finding that a case was commenced without reasonable cause. Terminology such as "manifestly groundless" "obviously untenable" and "incapable of argument" has provided guidance.
[37] The relevant tests for finding that a matter was taken without reasonable cause, when translated into the context of an application for unfair dismissal remedy, require identification of some aspect of the application which would unquestionably defeat the claim. An unfair dismissal claim that was taken without reasonable cause would contain some aspect which was identifiable from the application document and which of itself, would operate to strike the claim out. For example, an application which stated and provided verification that the period of employment was less than six months would be a claim that would be likely to have been taken without reasonable cause.
[38] In this case, there was no suggestion that the claim for unfair dismissal contained some defect(s) which meant that it should have been struck out or otherwise subject to interlocutory disposal. HCL complained about the alleged absence of merit with the application at the time that it was made, and during the course of the proceedings. There were three primary elements that HCL identified as providing for an absence of merit with the application.
[40] Although HCL correctly identified that Mr Amba's unfair dismissal claim was not particularly strong, at no stage has it identified some defect that would have made a case for it to have been found to be manifestly groundless, or obviously untenable, or incapable of argument. The correct test in this regard is not whether the claim had no substantial prospect of success, but rather, whether there was an undeniable aspect of the matter which would, without question, compel the application to failure. There was no identifiable aspect of the application which could be capable of defeating the claim without any recourse to argument. Consequently, the application was not made without reasonable cause as contemplated by s. 611 (2) (b) of the Act.
No Reasonable Prospect of Success - s. 611 (2) (b) - Mr Amba
[41] HCL also advanced its application for costs under that part of s. 611 of the Act that involved the prospect that it should have been reasonably apparent to Mr Amba that his application had no reasonable prospect of success. It seems to be well settled that the test to establish that a case had no reasonable prospects for success is not as stringent as that required to find that a matter had been taken without reasonable cause.
[42] Consideration of this aspect of the application for costs involves a broad assessment of the merits of the case as should have been properly evaluated at the time of the making of the application and during proceedings. However, caution must be exercised to carefully evaluate whether any alleged absence of merit would have been reasonably apparent to an applicant at the time of making the claim or at some subsequent time during the proceedings.
[43] In this instance it is relevant to recognise that up until shortly before the Hearing of his unfair dismissal claim, Mr Amba was being advised by his lawyer, Mr Wilson. The conduct of Mr Wilson is to be assessed separately under that part of the application for costs taken pursuant to s. 401 of the Act. Therefore, Mr Amba's own subjective assessment of the strengths and weaknesses of his case, may have established a genuine belief that despite any finding of misconduct, his particular circumstances, including his almost 7 years of unblemished employment history, and what he described as his 457 Visa status, may have established a reasonable prospect for success of his unfair dismissal claim.
[44] It is also relevant to recognise that HCL had investigated a number of specific instances and found that Mr Amba had made fraudulent expenses claims. However, regrettably, HCL erroneously translated the specific instances of fraudulent expenses claims into an entirely unreasonable claim for recovery against Mr Amba for all expenses claims that he had made in about a two year period. Consequently, Mr Amba was justifiably contesting the manifestly unreasonable claim made by HCL for recovery of all expenses that had been claimed and paid to Mr Amba. Although HCL revised its claim for recovery and subtracted amounts identified as paid on the production of taxi receipts, it maintained an entirely unreasonable claim against Mr Amba for recovery of all remaining expenses.
[45] Consequently, it would have been understandable that Mr Amba's subjective assessment of the strengths and weaknesses of his unfair dismissal case would have been coloured by the manifestly unreasonable claim that HCL had made against him for recovery of all remaining expenses. The perceived injustice of this position would have understandably given rise to a belief by Mr Amba, that despite other weaknesses with his unfair dismissal claim, a prospect of success would have germinated from the entirely unreasonable position that HCL advanced in its demand for recovery of all expenses claimed by Mr Amba. The recovery claim made by HCL must have, on any objective basis, encompassed a significant number of expenses claims that were entirely legitimate.
[46] In these circumstances, no finding can be made that it should have been reasonably apparent to Mr Amba that his unfair dismissal application had no reasonable prospect of success. Accordingly, the requirements of s. 611 (2) (b) of the Act have not been satisfied.
Unreasonable Act or Omission - s. 400A (1) - Mr Amba
[47] HCL also pursued its costs application on the basis that there was conduct on the part of Mr Amba that satisfied subsection 400A (1) of the Act.
[48] Subsection 400A (1) of the Act introduces a further exception to the general rule established by subsection 611 (1) that each side bear its own costs in relation to a matter before the Commission. This particular exception is confined to unfair dismissal proceedings and requires that the Commission be satisfied that a Party caused costs to be incurred by another Party because of an unreasonable act or omission. An unreasonable act or omission could occur in respect to a particular aspect or part of the proceedings, or such act or omission might involve a more general finding in respect to a combination of factors surrounding the application and any part or parts of the proceedings.
[49] HCL asserted that the conduct of Mr Amba in both making the application and in respect to his position in maintaining proceedings, despite receiving repeated requests to withdraw his application, represented unreasonable acts or omissions in connection with the conduct or continuation of the unfair dismissal claim. HCL asserted that Mr Amba's actions satisfied the requirements of subsection 400A (1) of the Act.
[50] As it has been determined that the application for unfair dismissal remedy was not taken without reasonable cause, the making of the application could not represent an unreasonable act in satisfaction of subsection 400A (1) of the Act.
[51] Further, in view of the basis upon which I have determined that it would not have been reasonably apparent to Mr Amba that his unfair dismissal claim had no reasonable prospect of success, it follows that his ongoing failure to discontinue the unfair dismissal application would not have represented an unreasonable act or omission on the part of Mr Amba in connection with the conduct or continuation of the matter.
[52] Further, it is relevant to note that Mr Amba has suffered the disgrace associated with the publicised unfair dismissal Decision. This highly undesirable outcome should have been more carefully assessed before he proceeded with the Hearing of his unfair dismissal claim. However, Mr Amba would have been driven to pursue his unfair dismissal claim because of the blatantly unreasonable claim for recovery as was advanced by HCL.
[53] Consequently, in the particular circumstances of this case, it would be unreasonable and unjust to find that the actions of Mr Amba in making and maintaining his unfair dismissal claim, involved any unreasonable act or omission capable of satisfying the terms of subsection 400A (1) of the Act.
No Reasonable Prospect of Success - s. 401(1A) (a) - Mr Wilson
[54] HCL advanced its application for costs against Mr Wilson upon the assertion that he encouraged Mr Amba to start the unfair dismissal application where it should have been reasonably apparent that the application had no reasonable prospect of success. The issue of no reasonable prospect of success was examined in respect to Mr Amba's actions in considerations relevant to any satisfaction of subsection 611 (2) (b) of the Act. That examination must now be made in respect to Mr Wilson, particularly having regard for Mr Wilson being a lawyer providing advice to Mr Amba.
[55] As a lawyer, the assessments made by Mr Wilson of the strengths and weaknesses of Mr Amba's unfair dismissal claim would logically need to meet a more stringent analysis than the subjective judgements made by Mr Amba. It would appear that s. 401 of the Act is intended to impose something of an elevated level of scrutiny upon the conduct of lawyers and paid agents who act for Parties in unfair dismissal matters.
[56] The evidence that was provided by Mr Wilson revealed the advice that he gave Mr Amba at the time that the decision was made to make the application, and subsequently during the course of the proceedings. The advice provided by Mr Wilson clearly involved identification of particular weaknesses in the case to be advanced by Mr Amba. Mr Wilson identified weaknesses involving, in particular, the resignation that had been made by Mr Amba, the subsequent alternative employment that he obtained, and difficulties in respect to the alleged fraudulent nature of the expenses claims made by Mr Amba.
[58] As was submitted on behalf of Mr Wilson, the central issue regarding the allegedly fraudulent nature of the expenses claims was a matter that Mr Wilson was not in a position to make any conclusive judgement on. As was correctly identified, the determination of this central issue could only occur when the position that Mr Amba contended was thoroughly tested during his cross examination in the Hearing. Unfortunately for Mr Amba, that did not go well.
[59] Despite the findings that the Commission ultimately made about the central issue of the fraudulent nature of expenses that were claimed by Mr Amba, that position was not something that could have been reasonably apparent to Mr Wilson at the time that he was receiving instructions from Mr Amba. Consequently, it could not have been reasonably apparent to Mr Wilson that Mr Amba had no reasonable prospect of success, and therefore the requirements of subsection 401 (1A) (a) of the Act have not been satisfied.
Unreasonable Act or Omission - s. 401(1A) (b) - Mr Wilson
[60] It was further submitted by HCL that Mr Wilson committed unreasonable acts or omissions in connection with the conduct or continuation of the matter when he gave advice to the applicant that resulted in the application being made and continued over the repeated requests for him to withdraw his unfair dismissal claim. HCL asserted that as a qualified lawyer, Mr Wilson should have realised that Mr Amba had no reasonable prospects of success particularly after receiving correspondence from HCL's solicitors requesting that the applicant withdraw his claim.
[61] The basis upon which Mr Wilson was alleged to have committed unreasonable acts or omissions in satisfaction of the provisions of subsection 401 (1A) (b) of the Act, involved the same circumstances that were alleged to have established that it should have been reasonably apparent to Mr Wilson that Mr Amba had no reasonable prospects of success. Consequently, it is for the same reasons that the evidence has not established that it should have been reasonably apparent to Mr Wilson that Mr Amba had no reasonable prospects of success.
[62] No finding can be made that the commencement and continuance of the matter against the repeated requests of the lawyers acting for HCL, represented unreasonable acts or omissions by Mr Wilson in connection with the conduct or continuation of the matter. Therefore, the requirements of subsection 401(1A) (b) of the Act have not been satisfied.
[63] This application for costs was made by the respondent employer who successfully defended unfair dismissal proceedings that were taken by its former employee, Mr Amba. The costs application was made under ss. 400A, 401, 611 of the Act. The costs application was taken against both the former employee, Mr Amba and his lawyer, Mr Wilson. Consequently the Commission has also been required to consider whether the requirements of subsections 611 (2) (a) and (b), and/or 400A (1), and/or 401(1A) (a) and (b) of the Act were met so that costs should be Ordered in favour of the employer.
[64] In respect to subsection 611 (2) (a) of the Act, an analysis of the circumstances at the time that the unfair dismissal application was made, has confirmed that the application was not made without reasonable cause.
[65] Further, for the purposes of subsection 611 (2) (b) of the Act, having regard for the plethora of factors which may establish that a dismissal was unfair, I am not satisfied that at the time that the application was made, and subsequently during the course of proceedings, that it should have been reasonably apparent to Mr Amba that the application had no reasonable prospect of success.
[66] In respect to subsection 400A (1) of the Act, I have not been satisfied that the actions of Mr Amba in connection with the conduct or continuation of the matter represented any unreasonable acts or omissions on the part of Mr Amba in satisfaction of the requirements of subsection 400A (1) of the Act.
[67] In addition, following an examination of the conduct of Mr Wilson, and in particular having regard for the advice that he provided to Mr Amba, I have not been satisfied that it should have been reasonably apparent to Mr Wilson that Mr Amba's unfair dismissal claim had no reasonable prospects of success. Further, it has not been established that Mr Wilson's conduct represented an unreasonable act or omission in connection with the conduct or continuation of the unfair dismissal claim made by Mr Amba.
[68] In summary therefore, the requirements of subsections 611 (2) (a) and (b) and 400A (1) and 401(1A) (a) and (b) of the Act, have not been satisfied. The general rule established by subsection 611 (1) of the Act, that each Party bear its own costs, is not disturbed by any one or more of the exceptions provided in subsections 611 (2) and/or 400A (1) and/or 401(1A) of the Act.
[69] The employer's application for costs must be refused, and an appropriate Order shall be issued in conjunction with this Decision.
Printed by authority of the Commonwealth Government Printer
HCL Australia Services Pty Limited T/A HCL
Gautam Amba and Brett Wilson [2019] FWC 1891