s.394 - Unfair dismissal

Application for an unfair dismissal remedy - application for costs pursuant to ss.400A and 611 of the Fair Work Act 2009 - costs incurred by Applicant - application responded to by Respondent vexatiously and without reasonable cause - Respondent had no reasonable prospect of success - Respondent caused costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter - indemnity costs awarded from the time the Applicant filed material - parties to confer as to quantum of costs.

• [1] Mr James Francis Camenzuli made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (the Act) alleging that he had been unfairly dismissed from Companion Systems Pty Limited (the Respondent). A decision was issued on 17 May 2024 where I determined that Mr Camenzuli was unfairly dismissed within the meaning of section 385 of the Act[1] and ordered the Respondent to pay compensation.[2]

• [2] On 31 May 2024, Mr Camenzuli lodged an application for costs against the Respondent pursuant to ss.400A and 611 of the Act. A costs application made by a party must be made within 14 days after the Commission determines the matter, or the matter is discontinued.[3] I am satisfied the costs application was made within 14 days after I determined the matter on 17 May 2024.

• [3] Directions were issued requiring the parties to file written evidence and submissions. On 10 July 2024, the parties requested that the hearing be vacated and that the matter be determined on the papers. Having reviewed the material, I considered it appropriate to do so.

• [4] The Act provides the general rule that parties must bear their own costs in proceedings before the Commission.[4] The Act also facilitates exceptions to this general rule and empowers the Commission to award costs in specific circumstances. Sections 400A and 611(2) are two such exceptions.

• [5] Whilst the Act provides exceptions to the general rule, such power is to be exercised with caution and in clear senses.[5] It is only in rare and exceptional circumstances that costs will be awarded.

• [6] Section 400A of the Act provides as follows:

(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."

• [7] Section 400A was inserted into the Act by the Fair Work Amendment Act 2012. The Explanatory Memorandum to the Fair Work Bill 2012 provides:

"168. Item 4 inserts a new section 400A to enable the FWC to order costs against a party to an unfair dismissal matter (the first party) if it is satisfied that the first party caused the other party to the matter to incur costs by an unreasonable act or omission in connection with the conduct or continuation of the matter.

169. As with the new power to dismiss applications under section 399A, the power to award costs under section 400A is not intended to prevent a party from robustly pursuing or defending an unfair dismissal claim. Rather, the power is intended to address the small proportion of litigants who pursue or defend unfair dismissal claims in an unreasonable manner. The power is only intended to apply where there is clear evidence of unreasonable conduct by the first party.

170. The FWC's power to award costs under this provision is discretionary and is only exercisable where the first party (whether the applicant or respondent) causes the other party to incur costs because of an unreasonable act or omission. This is intended to capture a broad range of conduct, including failure to discontinue an unfair dismissal application made under section 394 and a failure to agree to terms of settlement that could have led to the application being discontinued.

171. However, the power to award cost is only available if the FWC is satisfied that the act or omission by the first party was unreasonable. What is an unreasonable act or omission will depend on the particular circumstances but it is intended that the power only be exercised where there is clear evidence of unreasonable conduct by the first party."[6]

• [8] The Commission can only make an order for costs under s.400A if satisfied that the two preconditions are met. The preconditions were outlined in the Full Bench decision of Gugiatti v SolarisCare Foundation Ltd,[7] as follows:

(1) A party engaged in an unreasonable act or omission in relation to the conduct or continuation of the matter; and

• (2) Such act or omission caused the other party to the matter to incur costs.[8]

• [9] The first precondition is not concerned with whether it was reasonable to have instituted a matter in the first place.

• [10] Section 400A(3) of the Act makes clear that the Commission is not limited to exercise its power to order costs under s.611 in conjunction with s.400A. The exception to the general rule within s.611 relevantly provides as follows:

"(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."

• [11] The provisions of the Explanatory Memorandum to the Fair Work Bill 2009, which relate to now s.611, provide:

"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 prospect of success."[9]

• [12] Costs orders in proceedings under the Act are rare. In Australian Workers Union v Leighton Contractors Pty Ltd (No 2),[10] the Full Court of the Federal Court observed in relation to s.570 of the Act, but with such observation being equally apposite to the costs provisions the subject of consideration in these proceedings, as follows:

"In our view the authorities establish the following principles:

(1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents' costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause.

(2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Spotless Services Australia Ltd v Senior Deputy President Jeanette Marsh [2004] FCAFC 155 (Spotless) at [12]-[13] (to the extent that the Full Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission [2006] FCAFC 199; (2006) 156 FCR 275 (Kangan) held otherwise, we would respectfully disagree)."

• [13] In Eghlima and another v Winco Systems Pty Ltd,[11] after considering a distillation of previous authorities of this Commission and its predecessors, Deputy President Sams highlighted the discretionary nature of the costs jurisdiction, and observed:

"A number of important propositions arise from s 611 of the Act and the authorities to which I have just referred:

1. Unlike the general courts, costs in FWC proceedings do not 'follow the event'.

1. The award of costs in industrial matters is to be approached with caution and with a strict application of the criteria expressed in subsection (2) of s 611 of the Act.

1. The three preconditions to the exercise of discretion in subsections (1) and (2) are disjunctive, meaning only one of either of the notions of 'vexatiously', 'without reasonable cause' or 'no reasonable prospects of success' need to be satisfied before the Commission may exercise its discretion to award costs.

1. Even if the Commission finds that the preconditions of subsection (2) are all, or either of them met, the Commission retains a discretion as to the extent or at all, of any costs order.

1. Nevertheless, the Commission's power to award costs is quintessentially an exercise of discretion."

• [14] Section 611(2)(a) of the Act prescribes that a costs order can be made if the Commission is satisfied that the applicant made the application vexatiously or without reasonable cause, or the respondent responded to the application vexatiously or without reasonable cause. The meanings of the terms 'vexatiously' and 'without reasonable cause' were discussed in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (Church).[12] The Full Bench in that decision said the question of whether an application was made vexatiously looks to the motive of the applicant in making the application. An application is made vexatiously where the predominant purpose is to harass or embarrass the other party or to gain collateral advantage.

• [15] The Full Bench in Church referred to the decision in Hamilton v Oades where Deane and Gaudron JJ stated:[13]

"The terms 'oppressive' and 'vexatious' are often used to signify those considerations which justify the exercise of the power to control proceedings to prevent injustice, those terms respectively conveying, in appropriate context, the meaning that the proceedings are 'seriously or unfairly burdensome, prejudicial or damaging' and 'productive of serious and unjustified trouble and harassment'."

• [16] The meaning of the words "without reasonable cause" was also considered by the Full Bench in Church. The Full Bench stated:[14]

"... A party cannot be said to have made an application 'without reasonable cause', within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.[15] The test is not whether the application might have been successful, but whether the application should not have been made.[16] In Kanan v Australian Postal and Telecommunications Union,[17] Wilcox J put it this way:

"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."

• [17] In the decision of Keep v Performance Automobiles,[18] the Full Bench said the following:

"The proper construction of s.611(2)(a) was recently considered by a Full Bench in Church v Eastern Health t/as Easter Health Great Health and Wellbeing (Church). Church is authority for the following propositions:

• (i) The power to order costs pursuant to s.611(2)(a) should be exercised with caution and only in a clear case.[19]

• (ii) A party cannot be said to have made an application 'without reasonable cause' within the meaning of s.611(2)(a), simply because his or her argument proves unsuccessful.[20]

• (iii) One way of testing whether a proceeding is instituted 'without reasonable cause' is to ask whether upon the facts known to the applicant at the time of instituting the proceeding, there was no substantial prospect of success.[21]

• (iv) The test imposed by the expression 'without reasonable cause' is similar to that adopted for summary judgment, that is, 'so obviously untenable that it cannot possibly succeed', 'manifestly groundless' or 'discloses a case which the Court is satisfied cannot succeed."[22]

• [18] Section 611(2)(b) of the Act prescribes that a costs order can be made if the Commission is satisfied that it should have been reasonably apparent to the applicant that the application had no reasonable prospect of success.

• [19] In Clothier v Ngaanyatjarra Media,[23] the Full Bench considered the meaning of the phrases "should have been reasonably apparent" and "had no reasonable prospect of success". The Full Bench in that case cited Baker v Salva Resources Pty Ltd (Baker)[24] with approval. In Baker it was said:

"[10] The concepts within s.611(2)(b) 'should have been reasonably apparent' and 'had no reasonable prospect of success' have been well traversed:

• 'should have been reasonably apparent' must be objectively determined. It imports an objective test, directed to a belief formed on an objective basis, rather than a subjective test; and

• a conclusion that an application 'had no reasonable prospect of success' should only be reached with extreme caution in circumstances where the application is manifestly untenable or groundless or so lacking in merit or substance as to be not reasonably arguable."

• [20] The Full Bench in Gugiatti v SolarisCare Foundation Ltd[25] provided the following guidance as to the application of s.400A:

"Section 400A(1) establishes two pre-conditions for the making of an order for costs under the subsection (in addition to the requirement in s.400A(2)). The first is that the Commission must be satisfied that a party engaged in an unreasonable act or omission in relation to the conduct or continuation of a matter. The second is that such act or omission caused the other party to the matter to incur costs. Once these preconditions are satisfied, a discretionary power to order the payment of such costs is enlivened."

• [21] The Full Bench in Veal v Sundance Marine Pty. Ltd. as trustee for Sundance Unit Trust T/A Sundance Marine held that "[t]he phrase "unreasonable act or omission" was a component of provisions of s 170CJ(3) of the Workplace Relations Act 1996 (the WR Act)."[26] In dealing with an application for costs pursuant to s.400A of the Act, the Full Bench has followed previous decisions of the Full Bench of the Commission made in respect of s.170CJ(3) of the WR Act.[27]

• [22] The Full Bench in Brazilian Butterfly Pty Ltd v Charalambous relevantly held that:[28]

"[39] Very strong prospects of success will not always justify a failure to participate in settlement negotiations initiated by a serious settlement offer from the other party. For example, where reinstatement is not sought and the amount offered by a respondent is equivalent to the statutory cap on compensation that can be ordered pursuant to s.170CH, it will likely be unreasonable for an applicant to fail to agree to a settlement on those terms, irrespective of how strong the applicant's case is. Of course, even then, it is possible to conceive of circumstances where a failure to agree terms of settlement on the basis of such an offer would not be unreasonable. For example, depending upon the circumstances, it may be entirely reasonable for an applicant to insist upon a withdrawal of the dismissal and acceptance of a resignation in its stead if this were necessary to repair substantial damage done to an applicant's professional reputation and future professional job prospects as a result of the dismissal.

[40] On the other hand, modest or even poor prospects of success on liability or remedy will not necessarily always make it unreasonable for a party to fail to agree terms of settlement that may lead to the discontinuance of the application. For example, an applicant who was a long term employee close to retirement may have very substantial contingent superannuation entitlements that will be lost unless he or she obtains reinstatement. The difference between the value of those contingent entitlements and the amount offered by the respondent as a monetary settlement may be so great as to make it reasonable for the applicant to refuse the respondent's offer, notwithstanding that the applicants' prospects of success are only modest or even poor. Again, each case will turn on its own facts.

[43] A reasonable person, who is a party to proceedings pursuant to s.170CE, when confronted with an offer of settlement from the other party, will determine whether, and if so, how to respond to such an offer after considering all the circumstances of the case, including:

• the terms of the settlement offered in relation to the relief sought;

• the relative strengths of the parties' cases (and thus their relative prospects of success) in relation to both 'liability' and the relief sought;

• any assessment of the merits in the certificate issued by the Commission pursuant to s.170CF(2);

• the likely length and cost of proceeding to a hearing if the matter does not settle; and

• any adverse consequences that will accrue to a party if they accept a settlement on particular terms rather than successfully prosecute or defend the primary application, as the case may be.

[44] This list is not intended to be exhaustive. All of the circumstances are relevant and, as is made clear in the joint judgment in Blagojevch, there is no basis in the Act for giving primacy to any particular factor in every case.

[45] In many, if not most, cases there will be contested facts or contested interpretations of particular facts. What knowledge in this regard is to be attributed to the reasonable person considering whether, and if so, how to respond to an offer of settlement? The passage in Abbey, upon which the Commissioner relied was, clearly enough, an attempt to grapple with that problem. However, there is a tension between the way in which that passage is expressed and the apparent acceptance by the majority in Blagojevch that a party can act reasonably in responding to an offer of settlement by reference to that party's "genuine perception or recollection of events". The Full Court's formulation is to be preferred although, even then, it is not to be seen as a substitute for the words of the Act. Of course, there is an issue as to what constitutes a "genuine" perception. The Full Bench in Kangan Batman TAFE observed, we think correctly, that:

"A party cannot simply disregard matters that should have been reasonably apparent and then claim that such matters were not apparent to them."

[46] In other words, "genuine" perception is not necessarily the same as actual perception. The notion of "genuine" perception carries a value content: a person may not be able to assert that their actual perception of an event is a "genuine" perception if, for example, they have been confronted with compelling evidence that is inconsistent with that perception and simply disregard it. It goes without saying that a party's perception of relevant facts will not be genuine if they ought be taken to have known that the facts were other than as they assert. Blagojevch provides the archetypal example of a party who puts forward a fabricated case.

[47] Moreover, confronted with disputed facts, or facts open to a range of interpretations, a reasonable person in the position of a party, when considering whether to agree to terms of settlement that may lead to the discontinuation of an application, will take account of the risk a central factual dispute will be resolved in favour of the other party or that central facts open to a range of interpretations will be interpreted in favour of the other party. This is not incompatible with an offeree responding to an offer in the light of the offeree's genuine perception or recollection of events."

• [23] Mr Camenzuli made the following submissions in his application for costs, including that the Respondent:

(a) presented two mutually inconsistent grounds for resisting the application and bizarrely insisted he had not been terminated until 14 June 2023, and then terminated again;

(b) made baseless assertions that he had engaged in theft and harassing and unstable conduct;

(c) filed response material to implement as much damage as it could inflict upon him, including egregious character assignation attacks;

(d) alleged and maintained baseless allegations of malicious malware attacks by him despite overwhelming evidence to the contrary; and

(e) contacted his new employer under a false and fraudulent pretence.

• [24] Mr Camenzuli's submissions detailed how egregious the accusations of theft, sending malware and harassing senior staff were; all found by the Commission not to be true. It was submitted that the allegations of the Respondent were fictitious, grave in nature, and engineered to ensure that Mr Camenzuli was put to as much anguish as possible.

• [25] It was submitted that the Respondent's case was embarrassing, leaving Mr Camenzuli with no real understanding of what position was being adopted to resist the claim for unfair dismissal.

• [26] Mr Camenzuli submitted that he was put to unnecessary costs due to the Respondent's unreasonable approach to the proceedings.

• [27] The Respondent submitted that in respect of its case, there had been confusion between its own witnesses as to whether the dismissal took effect on 9 June 2023, or at some other time. It was submitted that neither of those witnesses are lawyers. I note, however, that Mr Gabriel Alkan, Principal Consultant of Specialist HR was representing the Respondent in the dismissal of Mr Camenzuli.

• [28] The Respondent submitted that Mr Camenzuli's action in deleting all data from the Respondent's laptop before returning it was reasonably argued as serious misconduct, despite the Commission's findings on the issue. Similarly, the fact that Mr Camenzuli did not return the Respondent's mobile phone by the time it had specified, ought to have counted against Mr Camenzuli.

• [29] The Respondent noted that the decision was 76 pages long, and the parties had been granted leave to be represented due to the complexity of the matter. In response, Mr Camenzuli submitted that the Respondent's conduct in defending the application unnecessarily drained his and the Commission's time and resources. It was submitted:

"...it is regretfully often the case, that the more vexatious the proceedings, and the more unreasonable the conduct, the more ink that is required to be spilled."

Was the application responded to vexatiously or without reasonable cause? - s.611(2)(a)

• [30] In the substantive proceedings, the Respondent continued with a narrative that Mr Camenzuli had sent an email to the Respondent on 14 June 2023 containing malware. In fact, Mr Camenzuli had sent an email to the Respondent on 14 June 2023, advising that he had sent by Australia Post to the Respondent the mobile phone. He attached the Australia Post receipt.

• [31] In evidence during the hearing and recorded at [149] of the decision, Mr Killick stated that he had read that email on 15 June 2023.

• [32] In oral evidence, recorded in the decision at [179], Mr Alkan repeated the assertion that Mr Camenzuli had sent an email containing malware. This is despite Mr Camenzuli's witness statement, filed on 11 September 2023 including as an attachment, the Australia Post receipt to his email of 14 June 2023.

• [33] The termination letter sent by Mr Alkan to Mr Camenzuli on 15 June 2023 never asserted that one of the reasons for the dismissal was concerns the Respondent had that Mr Camenzuli was harassing staff or engaging in a spiralling and escalating course of serious misconduct.

• [34] In respect of the phone issue and alleged sending of malware, the following is recorded in the decision:

"[287] What happened next is nothing short of shocking. Mr Killick's evidence before the Commission, including after receipt of Mr Camenzuli's witness statement and hard copy of the Australia Post tracking receipt is that Mr Camenzuli sent the Respondent malware in the email of 14 June 2023. Mr Killick repeated it in his witness statement, it was in the Respondent's submissions, it was in the 15 June 2023 letter, and Mr Killick gave oral evidence that Mr Camenzuli had sent malware.

[288] Curiously, in oral evidence, Mr Killick stated that he did read the email of 14 June 2023 on 15 June 2023, but considered that it contained malware because of a quarantine notification.

[289] How Mr Killick could persist in giving evidence to the Commission on 2 November 2023, when Mr Camenzuli filed his witness statement on 11 September 2023, attaching the Australia Post tracking receipt is beyond comprehension. It only became clear to him in cross-examination, when it was pointed out to him that it had simply been a quarantine notification that he conceded that he had incorrectly assumed it was malware.

[290] Mr Alkan gave similar, combative evidence that Mr Camenzuli had sent malware to the Respondent. He gave the following oral evidence on 19 October 2023:

"No, it's very clear, sir, that he sent this malware on the 14th......"

"He sent an email to the company with malware, a virus."

[291] It appears to me that it had not dawned on Mr Alkan to read all of Mr Camenzuli's attachments to his first witness statement. He appeared to me to learn in the witness box that Mr Camenzuli had been to the post office on 14 June 2023 and sent the mobile phone. He was incredibly fixated on the phone not having been received by the Respondent on 14 June 2023, but gave no credit whatsoever to Mr Camenzuli for having sent the mobile phone by registered post on 14 June 2023, informing the Respondent of the fact and as per the Respondent's request attaching a tracking number.

[292] In the 15 June 2023 letter sent from Mr Alkan, Mr Camenzuli was accused of sending malware and not providing a tracking number.

[293] I am satisfied that Mr Camenzuli did not send malware to the Respondent, and he did send a tracking number. The mobile phone was sent on 14 June 2023 and reached the Respondent one or two days later. In respect of my s.387(h) consideration, the fact that the phone reached the Respondent one or two days late is not material. New South Wales enjoyed a public holiday on 12 June 2023, and there is no guarantee that even if he had sent the phone on 12 or 13 June 2023, it would have reached the Respondent's offices by 14 June 2023."

• [35] As is plainly clear, I considered the Respondent's conduct to have been appalling in respect of the false accusation that Mr Camenzuli had sent the Respondent an email attaching malware. The email attachment was available to be reviewed by the Respondent. It was also included in Mr Camenzuli's witness statement filed on 11 September 2023, but it appears that nobody from the Respondent, including representatives, duly considered the Australia Post receipt until it was discussed during the hearing.

• [36] As for Mr Camenzuli wiping the laptop clean of data constituting a reason for the dismissal, in the decision at [296] I found that this did not weigh against a finding that the dismissal was harsh, unjust and unreasonable.

• [37] As recorded in the decision in paragraphs [60] - [71], Mr Alkan, on behalf of the Respondent, engaged in astonishing conduct in attempting to contact Mr Camenzuli's new employer. This was undertaken in the weeks following Mr Camenzuli's material having been filed and served in the substantive proceedings. If information was sought in relation to earnings in new employment to satisfy the Commission of mitigation and earnings since the dismissal, the Respondent could have requested Mr Camenzuli file redacted pay slips from his new employer.

• [38] Having regard to the Respondent's conduct in the proceedings, I am satisfied that the Respondent responded to the application vexatiously and without reasonable cause. I am satisfied that the predominant purpose in responding in the manner that it did was to harass or embarrass Mr Camenzuli or gain collateral advantage in the desire for him to withdraw his application.

• [39] The reasons for the termination were contained in the letter sent to Mr Camenzuli on 15 June 2023 replicated at [59] in the decision. Mr Alkan sought to embellish the reasons for the dismissal, including by claiming that Mr Camenzuli was engaging in misconduct and harassing staff. In the decision I found that none of that was true.

• [40] I consider it more than likely that because Mr Alkan was involved in the dismissal while simultaneously advising the Respondent, he could not step back and objectively advise the Respondent of its failings. Between Mr Alkan and Mr Killick, they could not even agree when the termination took effect.

• [41] The Respondent's legal representative filed a notice of appearance one day before the hearing in October 2023. Up until that point, the Respondent's material had been prepared and filed by Mr Alkan.

• [42] Mr Camenzuli, through his representative, had been attempting to resolve the matter by way of offers of settlement throughout August - October 2023. The offers of settlement were approximately $41,000 - $44,000. In written correspondence, Mr Camenzuli put the Respondent on notice that a costs application would be made and that he considered the Respondent's resistance of the application to amount to vexatious conduct and without reasonable cause.

• [43] On 17 October 2023, the Respondent offered to resolve the application for a payment of $10,000. In doing so, Mr Alkan put the following to Mr Camenzuli's representative:

"For the reasons stated within the Respondent's overall material filed thus far and the comments made by Commissioner Hunt previously, the Applicant is not in a reasonable position to proceed and or enter contested proceedings. It is evident from the material filed thus far by the parties that your client has significant hurdles to overcome to demonstrate that he was dismissed unfairly."

• [44] On 18 October 2023, Mr Camenzuli's representative replied:

"...we reject your purported assessment of the Commissioner and note that your client is resisting and putting our client to costs, on grounds that patently have no prospects of success.

We maintain our previously stated position that our client has strong prospects of success."

• [45] On 31 October 2023, after the first day of hearing, the Respondent offered to resolve the application for a payment of $18,000. Within the letter making the offer, it was put that the maximum amount the Commission could award to Mr Camenzuli is as follows:

$6,439.33 representing 15 weeks difference between past and current roles

• [46] The supposed limit to the amount that could be awarded to Mr Camenzuli is simply not correct and ought not to have been put by the Respondent.

• [47] Mr Camenzuli counter-offered $46,000. Correspondence sent by his representative required him to provide substantive detail addressing matters raised by the Respondent in correspondence, including his earnings with his new employer. This would have increased Mr Camenzuli's legal costs.

• [48] I consider that from the moment Mr Camenzuli's witness statement, including annexures, and submissions were filed on 11 September 2023, it should have been apparent to the Respondent that it had no reasonable prospect of success in defending the application. Its allegations of Mr Camenzuli sending malware were false, and if the Respondent had bothered to properly read his statement and his annexure producing the Australia Post receipt, it would have objectively considered that to be so.

• [49] The fact that Mr Camenzuli returned the telephone interstate some days late by post, especially when New South Wales experienced a public holiday not celebrated at the same time in Queensland, ought to have caused the Respondent to rethink the strength of the dismissal. The Respondent stated in its dismissal letter that Mr Camenzuli had not sent a tracking number for the phone; he had.

• [50] If the Respondent considered the Commission would find the dismissal to be fair on the basis of the laptop having been wiped clean, Mr Camenzuli's explanation for doing so, contained in his witness statement ought to have convinced the Respondent to sensibly resolve the application. Instead, it put Mr Camenzuli to considerable cost.

• [51] I am satisfied that following 11 September 2023, the date the Respondent had receipt of Mr Camenzuli's material, it should have been reasonably apparent to the Respondent that its response to the application had no reasonable prospect of success.

Did the Respondent cause costs to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of the matter? - s.400A

• [52] On 11 September 2023, the Respondent was in receipt of Mr Camenzuli's evidence and submissions.

• [53] Any objective consideration of Mr Camenzuli's material would have caused the Respondent to conclude that it ought to fairly resolve the application with Mr Camenzuli. For the reasons I have earlier described, I do not consider that the Respondent acted objectively to fairly resolve the application.

• [54] It was an unreasonable act to continue the defence of the application, particularly based on incorrect assertions as to the maximum amount of compensation that could be awarded to Mr Camenzuli.

• [55] I consider it appropriate to make an order of costs for the period following 11 September 2023, that being the day Mr Camenzuli's material was served on the Respondent.

• [56] The tax invoices of 3 July 2023 and 4 September 2023 are not to be included in the costs to be awarded.

• [57] In respect of the tax invoice dated 14 November 2023, I have not included the amounts for costs incurred prior to and including 11 September 2023. This is an amount of $3,040 plus GST = $3,344. The balance of the 14 November 2023 invoice is $25,921.05 less $3,344 = $22,577.05.

• [58] The tax invoice of 27 May 2024 is $3,476.

• [59] The tax invoices for Counsel total $9,570. All work undertaken by Counsel is later than 11 September 2023.

• [60] The costs incurred by Mr Camenzuli post 11 September 2023 are $35,623.05.

• [61] Mr Camenzuli seeks an order for costs on an indemnity basis. The Respondent resists such an order and notes that Mr Camenzuli was awarded $38,436.90 in compensation, a smaller amount than his lowest offer to settle which was $41,621.78. The award of compensation to Mr Camenzuli was reduced by over $40,000 on account of the mitigation by Mr Camenzuli in securing new employment relatively shortly after he had been dismissed.

• [62] The Full Court of the Federal Court recently stated the following in respect of awarding costs on an indemnity basis:

"Relevant principles concerning the circumstances in which costs may be awarded on an indemnity basis were summarised in Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No 2) [2017] FCAFC 116 at [3]- [5] (Jagot, Yates and Murphy JJ). Broadly, there must be 'some special or unusual feature' that means that costs were imposed unreasonably on the party who seeks the indemnity costs order. As with all costs orders, the purpose remains compensatory not punitive: King v Yurisich (No 2) [2007] FCAFC 51 at [19] (Sundberg, Weinberg and Rares JJ) citing Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 543 (Mason CJ), 563 (Toohey J), 567 (McHugh J). Generally speaking, indemnity costs orders are only imposed where it is clear that there has been unreasonable conduct that has added to the cost burden of the proceedings: Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 at [11] (Wigney J).[29]

• [63] I have concluded that it is appropriate to award indemnity costs on account of the Respondent's conduct, heavily criticised by me in the decision. I conclude the Respondent's conduct warrants the consideration in Post v NTI Limited T/A NTI[30] as to a special or unusual feature described at [30] of that decision. Most notably, the Respondent's completely unfair allegations against Mr Camenzuli of harassing conduct, sending malware, and failing to send an Australia Post tracking number when clearly, he did, warrants Mr Camenzuli being awarded indemnity costs. The Respondent was on notice as to the strength of Mr Camenzuli's case when his material was filed and served on 11 September 2023.

• [64] Further, I am satisfied that the vexatiousness of contacting Mr Camenzuli's new employer following receipt of his filed material and prior to the first day of hearing demonstrates the unreasonableness of the Respondent in its continuation of the matter, adding to the cost burden of the proceedings.

• [65] I direct the parties to confer as to the relevant quantum of costs and their calculation according to the Act's Schedule of Costs set out in the Fair Work Regulations 2009.[31] The parties ought to have regard to the decision of Deputy President Easton in Perdikaris v KLF Holdings Pty Ltd.[32]

• [66] Consent orders should be filed in the Commission within 21 days of today. Should there be any disagreement about these amounts, I grant liberty to apply at short notice for final orders. Should the parties otherwise agree to settle the costs application on some other basis, they can advise my Chambers accordingly.

[1] [2024] FWC 489.

[2] PR775128.

[3] Fair Work Act 2009 (Cth) s 402.

[4] Ibid s 611(1).

[5] Roberts v Ngaanyatjarra Health Service [2016] FWC 4875.

[6] Explanatory Memorandum, Fair Work Bill 2012 (Cth).

[7] [2016] FWCFB 2478.

[9] Explanatory Memorandum, Fair Work Bill 2009 (Cth).

[10] [2013] FCAFC 23; (2013) 232 FCR 428 at 430-431.

[11] [2013] FWC 2351, at [44].

[12] [2014] FWCFB 810.

[13] Ibid at [29], citing [1989] HCA 21; (1989) 166 CLR 486 at 502.

[14] [2014] FWCFB 810 at [30].

[15] R v Moore; Ex Parte Miscellaneous Workers Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473; Nilsen v Loyal Orange Trust [1997] IRCA 267; (1997) 76 IR 180 at 181 per North J.

[16] J-Corp Pty Limited v Australian Builders Labourers Federated Union of Workers (WA Branch) [1993] FCA 70; (1993) 46 IR 301 per French J.

[18] [2015] FWCFB 1956.

[19] [2014] FWCFB 810 at [27].

[21] See Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, cited with approval in Church at [30].

[22] Heidt v Chrysler Australia Limited (1976) 26 FLR 257 at [272 - 273]; Geneff v Peterson (1986) 19 IR 40 at [87-88]; Hatchett v Bowater Tutt Industries Pty Ltd [1991] FCA 188; (1991) 28 FCR 324 at 327; Re Ross and others, Ex Parte Crozier [2001] FCA 1665; (2001) 111 IR 282 at [12]; Re Australian Education Union (NT Branch) (No.2) [2011] FCA 728 at [30]. Also see Wright v Australian Customs Service, PR926115, 23 December 2002 per Giudice J, Williams SDP and Foggo C and Church at [33].

[23] [2012] FWAFB 6323 at [15].

[24] [2011] FWAFB 4014.

[25] [2016] FWCFB 2478.

[26] [2013] FWCFB 8960 at [16].

[27] [2013] FWCFB 8960.

[28] PR968915.

[29] SunshineLoans Pty Ltd v Australian Securities and Investments Commission (No 2) [2025] FCAFC 60 at [6].

[30] Post, Steven Patrick v NTI Limited T/A NTI [2016] FWCFB 6765.

[31] Fair Work Regulations 2009 (Cth) r 3.08, sch 3.1.

[32] [2022] FWC 2192.

Printed by authority of the Commonwealth Government Printer