Jeffrey Vassallo v Easitag Pty Ltd [2021] FWCFB 3974

[1] This decision concerns an application by Easitag Pty Ltd (Easitag) made under s 611 of the Fair Work Act 2009 (Act) for an order that Mr Jeffrey Vassallo pay its costs in an unsuccessful appeal brought by Mr Vassallo against a decision of Commissioner Cirkovic.

[2] This matter has a lengthy history. In 2017, Mr Vassallo brought a dispute to the Commission under s 739 of the Act and the dispute resolution procedure in the Electrical, Electronic and Communications Contracting Award 2010 (Award), in which he contended that he should properly be classified at level 10 of the Award. On 15 November 2017, the Commissioner rejected Mr Vassallo's claim and determined that he was properly to be classified at level 4 of the Award (2017 decision).[1] Mr Vassallo appealed. In a decision dated 24 January 2018, a Full Bench of the Commission refused permission to appeal (2018 appeal decision).[2] Mr Vassallo then commenced proceedings in the Federal Court, in which he contended that he had been underpaid as a result of not having been correctly classified under the Award. On 23 June 2020, the court dismissed the application.[3] Mr Vassallo also applied to have the President of the Commission refer questions of law to the Court pursuant to s 608 of the Act. The application was denied.

[3] Mr Vassallo then made an application under s 603 of the Act, in which he asked the Commissioner to vary or revoke her 2017 decision. The Commissioner concluded that the majority of Mr Vassallo's submissions sought to reagitate matters that were the subject of her 2017 decision, and that the application was an abuse of process, groundless and vexatious. She dismissed the application under s 587(1)(b) of the Act. Mr Vassallo appealed. In our decision of 23 March 2021, we refused Mr Vassallo permission to appeal (2021 appeal decision).[4] Easitag seeks its costs in Mr Vassallo's second appeal on an indemnity basis, or alternatively on a party-party basis. The parties advised the Full Bench that they were content for the costs application to be determined on the papers. We consider it appropriate to do so.

[4] Easitag contended firstly that Mr Vassallo's appeal was made vexatiously or without reasonable cause, and secondly that it should have been reasonably apparent to Mr Vassallo that his appeal had no reasonable prospects of success. As to its first contention, Easitag submitted that the litigation history demonstrated that Mr Vassallo's appeal was vexatious, because the Commissioner had concluded that the application to revoke her earlier decision was an abuse of process, groundless and vexatious, a finding that the Full Bench in the 2021 appeal decision found to have been plainly open to her. Easitag further contended that Mr Vassallo's appeal did not identify any arguable error in the decision of the Commissioner and instead sought to mount a collateral attack on the Commissioner's 2017 decision, as well as the 2018 appeal decision. As to its second contention, Easitag submitted that it must have been reasonably apparent to Mr Vassallo that the appeal had no reasonable prospect of success because, among other things, it had written to Mr Vassallo's solicitors explaining why the application under s 603 had no reasonable prospects of success and putting him on notice that it would seek costs against him on an indemnity basis if he persisted with it.

[5] Easitag submitted that costs should be awarded on an indemnity basis because Mr Vassallo's conduct in bringing a hopeless appeal involved delinquency and it was appropriate that the company be more fully or adequately compensated (see Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 per Gaudron and Gummow JJ (at [44]).

[6] Mr Vassallo contended that his application under s 603 was made for good reasons, including that he had not been afforded a fair hearing before the Commissioner, that he sought in the s 603 application to adduce additional evidence to demonstrate that he possessed relevant qualifications for the higher classification to which he claimed to be entitled, and to show various discrepancies in Easitag's evidence before the Commissioner. Further, Mr Vassallo said that the circumstances had changed because the decision of the Federal Court suggested to him that the Full Bench had dismissed his appeal in error. He said that the decision of the Commissioner to dismiss his application under s 603 had been inconsistent with the agreed statement of facts, the parties' submissions, and the evidence. Mr Vassallo also restated various of his contentions in the appeal from the Commissioner's decision, reiterating his view that the Commissioner's decision was erroneous.

[7] Section 611 of the Act provides as follows:

• 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."[10]

[11] We are satisfied that it should have been reasonably apparent to Mr Vassallo that his appeal from the Commissioner's decision not to revoke her earlier decision had no reasonable prospect of success and that the jurisdictional prerequisite for the award of costs in s 611(2)(b) has therefore been established.

[12] Mr Vassallo failed to establish an arguable case of appealable error for the purposes of permission to appeal. Neither his notice of appeal nor his submissions disclosed any arguable case of discretionary or legal error in the Commissioner's decision. Of course, the fact that a person has been unsuccessful in obtaining permission to appeal does not mean that the appeal had no reasonable prospect of success. However, in the present case, we consider that the appeal was manifestly untenable.

[13] Appeals under s 604 of the Act exist for the correction of error, not to allow an unsuccessful party a further opportunity to argue their case. Grounds 1 to 9 in the notice of appeal did not speak to any error on the part of the Commissioner. Ground 10 asserted generally that the Commissioner's 2017 decision was based on false or incomplete information, but in substance Mr Vassallo simply disputed the outcome. There was no serious contention of any plausible error. Importantly, this was an appeal from the Commissioner's decision to dismiss Mr Vassallo's application to have the Commissioner revoke her earlier decision, after his appeal from that decision had failed. In our view, it should have been obvious to Mr Vassallo that the Commissioner would not revoke the 2017 decision, given it had remained undisturbed on appeal, unless he could present a very compelling reason, and that the prospect of a successful appeal from the Commissioner's refusal to revoke her earlier decision was very remote, particularly on the basis of arguments which did not meaningfully speak to error on the part of the Commissioner. In any event, irrespective of Mr Vassallo's actual understanding or state of mind in bringing his appeal, the question of whether it should have been reasonably apparent to Mr Vassallo that his appeal had no reasonable prospect of success must be viewed objectively, and from this viewpoint it is clear that the appeal was without prospect.

[14] As we have concluded that the jurisdictional prerequisite in 611(2)(b) has been established, it is unnecessary for us to determine whether the condition in s 611(2)(a) is also satisfied. The next question concerns the exercise of our discretion.

[15] We have decided that we should exercise our discretion in favour of awarding costs to Easitag. The company has incurred expense responding to a meritless appeal. We take account of the fact that on 19 August 2020 Easitag's solicitors wrote to Mr Vassallo's solicitors to put Mr Vassallo on notice that Easitag intended to make an application for costs on an indemnity basis pursuant to s 611 of the Act in respect of Mr Vassallo's application under s 603 for the Commissioner to revoke her original decision. Easitag's solicitors received no reply to that letter. Easitag did not avert to the possibility of an application for costs in respect of an appeal from the Commissioner's decision, however Mr Vassallo had been made aware that the company saw no substance in his application under s 603, and by clear implication an appeal from a decision dismissing such an application would itself be susceptible to an application for costs. We note that on 17 June 2021, Commissioner Cirkovic issued a decision[11] to order indemnity costs against Mr Vassallo in respect of his unsuccessful application under s 603 and directed the parties to file materials in respect of the quantum of costs to be ordered. That decision of course does not speak for or against an order of costs in the appeal.

[16] The costs that were incurred by Easitag were those in respect of the time spent by Easitag's solicitor dealing with the appeal. Easitag submitted an itemised schedule of costs identifying 16 items by reference to Schedule 3.1 of the Fair Work Regulations 2009 (see Attachment A). The total amount claimed in the schedule is $7,402.

[17] We note that Schedule 3.1 is prescribed for the purposes of awarding costs in relation to applications under s 365 (see ss 376 and 377A), Part 3-2 (see ss 400A to 403) and s 773 (see ss 779A to 781A). The amounts that may be ordered in costs applications of these particular kinds is limited by ss 377A(2), 403(2), and 781A(2). The application for costs in the present matter is unaffected by these provisions or Schedule 3.1. Rather, the jurisdiction of the Commission under s 611 having been established, there is a discretion to order 'some or all' of the relevant costs, taking into account what is fair and just (s 577(a)).

[18] In our opinion, Mr Vassallo's pursuit of a hopeless appeal involved delinquency, and it would be appropriate that the respondent to the appeal be compensated by an order for indemnity costs. Mr Vassallo is evidently wholly convinced by his own arguments, and his conduct might on one view be described as the misguided zeal of an unrepresented party. But this is no excuse. The conduct was unreasonable. The appeal should never have been brought.

[19] Although we consider this to be a case where indemnity costs would be appropriate, it remains necessary for us to be satisfied that the costs claimed were reasonably incurred. We note that Easitag successfully applied under s 596(2)(a) for permission to be represented in the appeal, despite the fact that the appeal was not legally complex. There is no contradiction in this. Section 596(2)(a) is engaged if granting permission for representation would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter. The presence of complexity is not required in order for the provision to be engaged. In a case with a long history involving serial applications, granting representation to a respondent to be represented by a lawyer or paid agent may offer the Commission various benefits tending to promote the efficient conduct of the proceeding irrespective of the absence of complexity, including perspective, brevity, and concision in the presentation of facts and argument, such as to warrant the grant of permission under s 596(2)(a). In some cases, it may also be patently unfair to deny representation to a party that is a respondent to serial unmeritorious claims (see s 596(2)(c)).

[20] In our view, the fact that the appeal was plainly an unmeritorious one means that relatively little work was reasonably required to respond effectively to it. We consider that the work identified in the schedule of costs at items 1 and 2, 4 to 10, and 12 to 14 should be made subject to an order for costs under s 611. These sums represent an amount of $1080. In respect of item 3, we do not consider that it was reasonably necessary for each page of the appeal book to be perused, and that a sum of $200, and not $1,809, is appropriate. As to item 11, we do not believe it was reasonably necessary for $513 to be incurred perusing Mr Vassallo's list of authorities, and instead award $100. We do not order payment of the amount at item 15, as it pertains to the drawing of the application for costs in the appeal rather than Easitag's response to Mr Vassallo's appeal. Concerning item 16, we do not consider that $4,000 represents an appropriate amount for general care and skill etc. We consider $500 to be a reasonable amount, recognising that a certain limited amount of time would appropriately be required to consider the relevance for the appeal of the various different proceedings that Mr Vassallo had brought against the company.

[21] The total amount that we will order Mr Vassallo to pay in costs in the appeal is $1,745. We consider this to be an appropriate amount to order in the exercise of our discretion under s 611 of the Act. An order giving effect to this decision will be issued separately.

[22] Finally, we note that in recent times there has been a spate of applications, including under s 603, from unsuccessful litigants seek to rerun their failed claims, even after appeals from an original decision have been rejected. We consider that the Commission should be given appropriate powers to prevent serial litigation. We agree with the observation of the Full Bench in Grabovsky v United Protestant Association of NSW Limited[12] that the finite resources of the Commonwealth should not be unreasonably diverted by parties who simply cannot accept that their claims have been unsuccessful and who resubmit them to the Commission in one form or another. It is also unfair for the other party to be entangled in repetitive litigation.

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Jeffrey Vassallo v Easitag Pty Ltd [2021] FWCFB 3974 (26 July 2021)

Parties

Legislation Cited (2)