//
[77]
[2021] FWC 4632
General information, not legal advice.
Fair Work Commission
2021-07-30
Original judgment source is linked above.
s.611 - Application for costs against party
Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth
s 611 - Application for costs against party.
[1] Mitford Investments Pty Ltd (Mitford) has applied to the Commission for an order that Mr Rick Adaszko pay Mitford's legal costs incurred in successfully opposing Mr Adaszko's application for unfair dismissal (U2020/11708) (unfair dismissal application) and Mr Adaszko's application for permission to appeal (C2020/9213) (appeal application). The order for costs is sought under several sections of the Fair Work Act 2009 (Cth) (Act).[1]
[2] Mitford's case was essentially premised on two arguments. First it would have been reasonably apparent to Mr Adaszko that his unfair dismissal application and appeal application had no reasonable prospect of success.[2] Second, both applications had been pursued by Mr Adaszko vexatiously and without reasonable cause.[3] It was uncontroversial that the time limit for an application for costs was met.[4]
[3] For the reasons that follow, I have determined:
Pursuant to ss 611(2)(b) of the Act, Mr Adaszko is to pay Mitford's costs incurred on and after 7 September 2020 and until 13 May 2021 on an indemnity basis subject to the orders below.
Mitford is directed to provide a written itemised assessment of the costs to Mr Adaszko within seven days of the issuing of the Order, having regard to items that are referred to in the Schedule of Costs in Schedule 3.1 of the Fair Work Regulations 2009 (Cth) (Regulations). In doing so, Mitford is directed to file submissions, witness statements, and any other material it wishes to rely upon to support its written itemised assessment.
Mr Adaszko is directed to file submissions, witness statement, and any other material he wishes to rely upon in response to the written itemised assessment within seven days of receipt of Mitford's materials.
The parties are then directed to confer and seek to reach agreement on the quantum of the costs. If the costs are not agreed within 14 days of the receipt of the itemised assessment by Mr Adaszko, Mitford is to file the itemised assessment with my Chambers for the purposes of taxing the costs. Further directions may then be issued, in addition to a Notice of Listing for a conference.
The costs are to be paid within 28 days of the date of this Order (if the quantum is agreed) or the date the costs are taxed by the Commission, whichever is the latter.
[4] An Order[5] in the abovementioned terms is published concurrently with this decision.
[5] It is necessary to set out in some detail, the context in which the costs application is made.
[6] On or about 14 March 2016, Mr Adaszko commenced employment with Mitford as a Financial Adviser.
[7] On 27 February 2017, Mr Adaszko and Mitford entered into a loan agreement whereby Mitford advanced Mr Adaszko a sum of money to 'purchase' clients from Mr Adaszko's previous employer (Loan Agreement).
[8] Come 15 October 2019, Mr Justin Gilmour, Mitford's Managing Director, held a meeting with Mr Adaszko in relation to negative feedback from Mitford's clients relating to Mr Adaszko. At that meeting, Mr Adaszko informed Mr Gilmour that he did not want to undergo performance management and would resign once he had found alternative employment.[6]
[9] On 20 November 2019, Mr Adaszko and Mitford agreed to make arrangements for Mr Adaszko's resignation. Those arrangements were set out in an email dated 10 November 2019, which was referred to in the decision at first instance as the 'Separation Arrangements Email':
Mate below is what we are intending to send out as a comms to the staff. Do you have any feedback on this as we would like to send this by COB today. If you can provide the letter of resignation and we will at the same time give you the release document of the loan for the $40K. - email to staff is fine, Yes I will prepare a resignation letter today
In relation to your request for an additional two weeks pay beyond the notice period of December. Given the time of the year with clients wrapping up before Christmas I am happy to support you with a loan of $5K as a means of assisting you to manage your cash flow. There is also the study support that needs to be sorted which I understand is $3630 over the past two years which we can add to the loan instead of deducting from the final payroll. This would need to be repaid by 31st March 2020.- okay, that would be great. Thankyou
If you would like to go ahead with this loan agreement proposal I will have Phil update the waiver today. - ok, yes please proceed'[7] (the bold text signifies Mr Adaszko's response to the terms proposed by Mr Gilmour)
[10] In accordance with these arrangements, Mr Adaszko forwarded a signed letter of resignation to Mr Gilmour on 22 November 2019 in the following terms:
As discussed, I have decided to resign from Integro to pursue other opportunities where I can spend more time in the southwest, my last date at Integro will be 13 December 2019.
Thanks for all your support, I have enjoyed my time at Integro.[8]
[11] On 9 December 2019, Mr Adaszko was provided with a draft Deed of Acknowledgement providing for a discharge of the Loan Agreement. Mr Adaszko sought legal advice about the Deed of Acknowledgement and thereafter communicated to Mitford that his lawyers told him not to sign it.
[12] Mr Adaszko's last day of employment with Mitford was the week ending 15 December 2019.
[13] In the proceedings at first instance, it was common ground that Mr Adaszko had resigned from his employment; the issue was whether he was 'forced to do so because of conduct, or a course of conduct engaged in by his... employer.' Mr Adaszko and Mr Gilmour both gave evidence.
[14] The gravamen of the Deputy President's consideration of this issue is at [30] - [35] of the first instance decision,[9] as follows:
[30] The FWC has held in a number of comparable cases that a resignation tendered to avoid disciplinary action or performance management does not constitute a dismissal for the purposes of the FW Act because it lacks the necessary conduct on the part of the employer of removing choice from the employee.
[31] In this case, Mr Adaszko did have a real choice. He could remain with the organisation and undergo performance management or he could chose to leave the organisation. If, as he says, his performance was without fault then he had nothing to fear from the performance management process. If his employer acted without basis and terminated his employment for poor performance he could seek a remedy for unfair dismissal.
[32] The Separation Arrangements Email, which Mr Adaszko tendered as evidence of conduct forcing him to resign makes no reference to performance counselling or to a requirement that he resign. What it does evidence is the offer of an arrangement that, if he were to resign, he would be released from the Loan Agreement and that he would be extended another loan of $5000 to cover his study expenses and provide him with cashflow over the Christmas period.
[33] In the Separation Arrangements Email Mr Adaszko confirms his consent to the arrangements with the words "okay, that would be great. Thank you."
[34] The language of the email does not convey any animosity or compulsion, rather there appears to be a mutually agreeable commercial arrangement reached.
[35] I am not satisfied that Mr Adaszko was forced to resign from his employment because of conduct, or a course of conduct, engaged in by his employer. To the contrary it appears that the parties parted ways on what were, at the time, mutually agreeable terms.
[15] The Deputy President dismissed the unfair dismissal application on 11 December 2020. It is noted that for the purpose of the unfair dismissal application, Mitford sought leave to be legally represented, which was granted.
[16] On 24 December 2020, Mr Adaszko filed his appeal application and on 3 February 2021, upon hearing submissions from both parties, the Commissioner extemporaneously ordered that Mitford was permitted to be legally represented, notwithstanding Mr Adaszko's objection.
[17] On 12 February 2021, the Full Bench of the Commission dismissed the appeal application. In doing so, the Full Bench expressed that it was apparent from the first instance decision that the Deputy President accepted Mr Gilmour's evidence that Mr Adaszko chose to resign rather than go through a performance management process. The Full Bench considered that such a finding was plainly open on the evidence.[10]
[18] The Full Bench further concluded that the evidence fell well short of establishing that Mr Adaszko was forced to resign. The Full Bench stated,
[I]ndeed on Mr Adaszko's own evidence he was merely asked to resign and was offered an inducement to do so in the form of an offer to forgive a debt. As we have mentioned, Mr Adaszko's real complaint is that he upheld his part of an agreement with Integro by resigning, but Integro did not honour its side of the bargain.[11]
[19] Having concluded that the Deputy President did not err in concluding that Mr Adaszko had not been dismissed within the meaning of s 386,[12] Mr Adaszko's application for permission to appeal was dismissed.
[20] As an aside to the proceedings on foot between the parties in the Commission, Mitford submits the following:
on 29 May 2020, Mitford commenced proceedings against Mr Adaszko to enforce the Loan Agreement in the Magistrates Court of Western Australia;
b) on 27 October 2020, Mr Adaszko asserted that he had filed a complaint with ASIC against Mitford and at the time of filing submissions for the purpose of costs application, Mitford had not received notice from ASIC of a complaint from Mr Adaszko;[13] and
c) on 5 March 2021, Mitford received notice from the Australian Financial Complaints Authority (AFCA) that Mr Adaszko had lodged a complaint against Mitford;[14]
[21] In itemising its application for costs in its Form F6, Mitford claimed the costs of its legal representative who performed the work involved in:
preparation for, and representation at arbitration - includes taking of instructions, perusal of documents, preparation of necessary documents, attendance;
preparation for, and representation at hearing regarding permission to be legally represented before the Commissioner; and
preparation for, and representation at hearing before the Full Bench - including taking of instructions, perusal of documents, preparation of necessary documents and attendance.
[22] The costs and disbursements were itemised in the 'Itemised Schedule of Costs' (Schedule) of the Form F6. Aside from the Schedule, no further evidence was advanced to support the 'Total costs and disbursements' of $9,207.25. Whilst content for Mitford to rely upon its Form F6 and the Schedule insofar as those documents show that legal costs had been incurred, I am not satisfied that the document can be relied upon to determine the items of expenditure that could be covered by an order made. There is limited evidence before the Commission to support the costs itemised in the Schedule.
[23] It appears from the Schedule that Mitford is claiming costs on an indemnity basis because in itemising its claims, there is no with reference to Schedule 3.1 - Schedule of Costs in the Regulations and the amounts claimed appear in excess of the rates or amounts appearing in the Schedule.
[24] Section 403 sets out the provisions concerning a Schedule of Costs. Of relevance is s 403(2), which states:
(2) [Restrictions imposed by schedule of costs]
If a schedule of costs is prescribed for the purposes of subsection (1), then, in awarding costs under section 611 in relation to a matter under this Part, or awarding costs under section 400A or 401, the FWC:
(a) is not limited to the items of expenditure appearing in the schedule; but
(b) if an item does appear in the schedule - must not award costs in relation to that item at a rate or of an amount that exceeds the rate or amount appearing in the schedule.
[25] In Stanley v QBE Management Services Pty Limited T/A QBE,[15] the Commission's power to award indemnity costs was considered in light of s 403. It was observed that s 403 expressly provided that the Commission was not limited to the items of expenditure in any schedule. Further, Schedule 3.1 to Regulation 3.08 of the Regulations contemplates that in relation to a number of items specified, the Commission should exercise discretion in determining the amounts to be awarded.[16]
[26] In Hansen v Calvary Health Care Adelaide Limited,[17] the Full Bench confirmed that it was open to the Commission to order costs on an indemnity basis under s 611, expressing:
... the statutory scheme sets out the relatively circumscribed circumstances in which an order for costs might be found by the Commission to be appropriate in a particular case. It includes the exercise of discretionary power where the Commission is satisfied that one, or more of the circumstances set out in s 611(2), has been established. If such circumstances are established, the Commission, in the broad exercise of its discretion, may make an order that a person/s bear some, or all of the costs of another person, in relation to the application, including on an indemnity basis, or decline to make any order at all.[18]
[27] Mitford submits that it was evident from Mr Adaszko's own version of facts that he had not been dismissed and consequently did not have the requisite standing to apply for an unfair dismissal remedy. According to Mitford, the order sought should be made on the basis that it would have been reasonably apparent to Mr Adaszko that his unfair dismissal application and appeal application had no reasonable prospects of success (s 611(2)(b) of the Act).
[28] Regarding its second argument, Mitford observed that Mr Adaszko's unfair dismissal application and appeal application were responsive to its proceedings in the Magistrates Court and were therefore designed to gain a collateral purpose. That purpose, said Mitford, was to frustrate or delay the Magistrate Court proceedings. Mitford pressed that when all circumstances were considered, it was open to find that Mr Adaszko's applications were not only misconceived, without merit or substance, but had also been made vexatiously.
[29] Before considering the arguments further and Mr Adaszko's response to the same, it is timely to detail the legislative provisions that govern the award of costs under the Act.
5.1 The legislative framework
[30] The Commission's general powers to award costs are grounded in s 611, which reads:
(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.[19]
[31] The starting point in relation to costs of proceedings before the Commission is that each person involved in a matter must bear their own costs. This statutory imperative is said to have derived from the policy purpose that a person is entitled to make or defend an application made under the Act, without the risk that a costs order may be made against them.[20]
[32] However, there are exceptions. Those exceptions arise if the Commission is satisfied that:
(a) a person made an application, or responded to an application vexatiously or without reasonable cause; or
(b) it should have been reasonably apparent to a person that their application or a person who responded to an application had no reasonable prospects of success.
[33] Section 611 contains no indication of the considerations which the Commission must take into account in deciding how to exercise its discretion.[21] The discretion conferred is expressed in general, unqualified, terms.[22] In Dino De Giusti v NSW Trains t/a NSW Trainlink, the Deputy President referred to the observation of the High Court in O'Sullivan v Farrer:
Where a power to decide is conferred by statute, a general discretion, confined only by the scope and purposes of the legislation, will ordinarily be implied if the context (including the subject matter to be decided) provides no positive indication of the considerations by reference to which a decision is to be made.[23]
[34] The objects of the Act are set out in s 3; I do not intend to repeat them here.
[35] Relevant, however, are ss 577 and 578 of the Act, which state respectively:
The FWC must perform its functions and exercise its powers in a manner that:
(b) is quick, informal and avoids unnecessary technicalities; and
(d) promotes harmonious and cooperative workplace relations.
Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).
578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; and
(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin.
[36] Returning to the provisions of s 611, the relevant matters to determine are whether the applications were made without reasonable cause or vexatiously, or whether it should have been reasonably apparent to Mr Adaszko that his applications had no reasonable prospect of success.
5.2 Section 611(2)(b) no reasonable prospects of success
[37] I intend to address the second element of s 611(2) first, namely s 611(2)(b). The Full Bench of the Commission in Baker v Salva Resources Pty Ltd[24] expressed the following about the phrases 'should have been reasonably apparent' and 'had no reasonable prospect of success':
• '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;[25] 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,[26] or so lacking in merit or substance as to be not reasonably arguable.[27]
[38] Similarly, in Keep v Performance Automobiles Pty Ltd,[28] a Full Bench summarised the principles relevant to that subsection:
[18] As to s.611(2)(b), the FWC may make a costs order against a person if satisfied that 'it should have been reasonably apparent' to that person that their application had 'no reasonable prospect of success'. The expression 'should have been reasonably apparent' in s.611(2)(b) imports an objective test, directed to a belief formed on an objective basis as opposed to the applicant's subjective belief.
[19] There is Full Bench authority for the proposition that the Commission should exercise caution before arriving at the conclusion that an application had 'no reasonable prospects of success'. In Deane v Paper Australia Pty Ltd a Full Bench made the following observation about this expression in the context of enlivening a power to award costs under s.170CJ(1) of the Workplace Relations Act 1996:
"unless upon the facts apparent to the applicant at the time of instituting the [application], the proceeding in question was manifestly untenable or groundless, the relevant requirement in s.170CJ(1) is not fulfilled and the discretion to make an order for costs is not available".' [endnotes omitted]
[39] In Qantas Airways Limited v Mr Paul Carter,[29] the Full Bench stated that it was clear from the terms of s 611 that the point at which the Commission must determine whether or not an application was vexatious, without reasonable cause or had no reasonable prospect of success, was when the application was made.[30] Clearly, I see no reason to depart from that authority.
5.3 The submissions of the parties
[40] To support its case, Mitford drew upon the following findings of fact that had been found in the first instance decision and on permission to appeal:
a) Mr Adaszko conceded that he resigned from Mitford and had not been dismissed;[31]
b) Mitford and Mr Adaszko parted ways on mutually agreeable terms;[32]
c) at the time of Mr Adaszko's resignation from Mitford, by his own admission, he had not been aggrieved by the end of his employment with Mitford;[33]
d) Mr Adaszko took no immediate action to dispute the end of his employment with Mitford;[34]
e) Mr Adaszko did not produce any acceptable or reasonable explanation for delaying the filing of his unfair dismissal application until some 286 days following the end of his employment with Mitford;[35] and
f) Mitford's second jurisdictional objection (being that Mr Adaszko was not dismissed) would likely be upheld, and the matter would not proceed to the merits of the unfair dismissal application.[36]
[41] Mitford observed that Mr Adaszko's objections to the first instance decision were succinctly summarised and in turn dismissed by the Full Bench on permission to appeal in the following passages:[37]
In brief, Mr Adaszko submits that contrary to the Deputy President's decision, he was forced to resign. Mr Adaszko advances three arguments in support of this contention:
The first point amounts to little more than a complaint that Integro did not honour its side of the agreement reached at the 15 October 2019 meeting. Any failure by Integro to honour that agreement is a contractual matter between the parties; it is not relevant to the issue of whether Mr Adaszko was 'dismissed' within the meaning of s.386.[38]
The other two points seek to advance arguments which were not put at first instance and in respect of which no evidentiary foundation is proffered. As to Mr Adaszko's complaints to ASIC, it may be accepted that such complaints were made but there is no evidence to support Mr Adaszko's assertion that after he had raised the concerns Integro 'didn't want me to be part of their organisation'.[39] Nor was anything put about this matter at first instance.[40]
The function of an appeal under s.604 (as modified by s.400) is to correct error. Absent error on the part of the primary decision-maker it is not the function of the appeal process to give unsuccessful parties an opportunity to recast their case in the hope of a different outcome. The arguments advanced by the Appellant in this respect do not speak to any error that the Deputy President may have made; it can hardly be an error to fail to take account of an argument that was not advanced.[41]
[42] Mitford further observed that the Full Bench upheld the finding at first instance that Mr Adaszko had not been aggrieved by the end of his employment with Mitford:
Mr Adaszko's oral evidence is set out at [57] to [184] of the Transcript. During the course of his cross examination Mr Adaszko acknowledged that the highlighted text in the Separation Arrangement Email was his response to Mr Gilmour and that, in those responses, he did not put Mr Gilmour on notice that he was aggrieved with his resignation.[42]
[43] Concerning its position that at all material times, it was apparent to Mr Adaszko that his applications had no reasonable prospects of success, Mitford drew support from the following passages of the Full Bench decision:
It is apparent from the first instance decision that the Deputy President accepted Mr Gilmour's evidence that Mr Adaszko chose to resign rather than go through a performance management process. Such a finding was plainly open on the evidence.
In our view the evidence falls well short of establishing that Mr Adaszko was forced to resign. Indeed on Mr Adaszko's own evidence he was merely asked to resign and was offered an inducement to do so in the form of an offer to forgive a debt. As we have mentioned, Mr Adaszko's real complaint is that he upheld his part of an agreement with Integro by resigning but Integro did not honour its side of the bargain.
The Deputy President did not err in concluding that Mr Adaszko had not been dismissed within the meaning of s.386.
Section 394(1) provides that 'a person who has been dismissed may apply' for an unfair dismissal remedy. As Mr Adaszko was not dismissed he lacks the requisite standing to make this application. It follows that we need not consider that part of the appeal which is directed at the Deputy President's refusal to grant an extension of time.[43]
[44] Mitford's concluding submissions as to why it was clear to Mr Adaszko that his unfair dismissal application and appeal application would fail included:
he had resigned and had not initially contested the end of his employment as was apparent from his own evidence;
he had not been dismissed and therefore lacked standing to bring the unfair dismissal application;
on permission to appeal, he had not produced any submissions or evidence which challenged the factual or legal basis upon which the first instance decision was made;
on permission to appeal, he had merely repeated to the Full Bench those events which had been put at first instance as well as submitting various other additional and extraneous claims against Mitford which were not put forward at first instance; and
it was apparent to him that the appeal application was not a forum to repeat his failed application and attempt to strengthen that failed application with allegations devoid of any supporting evidence.
[45] Mr Adaszko's submissions in response to those of Mitford concerning the operation of s 611(2)(b) were limited. He traversed none of the relevant principles or authorities and essentially re-ran his unfair dismissal case with the exception of seeking to introduce new evidence previously not referred to at first instance or on permission to appeal.
[46] Briefly stated, Mr Adaszko said he was tricked into resigning by having been provided with the carrot of being forgiven for the Loan Agreement dated 27 February 2027.[44] He gave evidence that he received an email from Mr Gilmour on 20 November 2019, which requested a letter of resignation in return for a release document of the Loan.[45] However, having provided the resignation, Mitford then provided a conditional discharge of the Loan Agreement on 9 December 2019 (the Deed of Acknowledgement). Mr Adaszko considered the contents of the Deed of Acknowledgement not fair and reasonable, and explained that he lodged the unfair dismissal application in August 2020 because he felt he had been misled and deceived by Mitford.
[47] Further, Mr Adaszko appeared to contend that he was also forced to resign over his concerns that Mitford was engaged in misconduct because of acts of non-disclosure. After the costs hearing, Mr Adaszko appeared to adduce fresh evidence. This evidence had not been raised at first instance, on permission to appeal or during the course of the costs hearing. During the hearing, Mr Adaszko made reference to making a call to 'AMP Your Call Report' but was unable to provide a reference as to when he had given this evidence. A direction was provided to the parties for Mr Adaszko to file with Chambers the transcript (already in evidence) for the hearing held on 16 October 2020, highlighting where he purportedly gave evidence of an alleged complaint to AMP in February 2020 about Mitford's conduct. However, instead of doing as directed, Mr Adaszko filed fresh evidence to support his assertion of calling the AMP Your Call Report (a report that was said to have been closed in April 2020 and a subsequent report made in August 2020). The evidence was accepted, and Mitford was provided with the opportunity to respond.
[48] Mitford submitted that aside from having not sought leave to adduce fresh evidence, Mr Adaszko continued to adduce fresh evidence and, in doing so, sought to attempt to go behind the decisions at first instance and on permission to appeal. Mitford observed that there was no reference to a February 2020 AMP Complaint in the transcript of the hearing on 16 October 2020. The company concluded that Mr Adaszko's attempt to rely on fresh evidence after closing his defence further illustrated conduct which supported Mitford's costs application. As to the weight that should be afforded to the document, Mitford submitted that little or no weight should be given to the document in determining the costs application.
[49] Mr Adaszko's argument was that he was constructively dismissed. As to having made the unfair dismissal application some eight months after his dismissal, he explained the delay on having had other priorities, including paid work, financial planning exams, mental illness and child custody issues.
[50] I acknowledge that an award of costs should be cautiously approached. However, I am satisfied that it should have been reasonably apparent to Mr Adaszko that his unfair dismissal application and appeal application 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.
[51] Mr Adaszko failed to persuade the Commission he was dismissed unfairly, and he did not establish an arguable case of appealable error for the purposes of permission to appeal.
[52] Briefly stated, in respect of the appeal, I consider that the appeal was manifestly untenable having had regard to the facts of the case, the decision appealed from and the points taken in the notice of appeal. The Full Bench distilled Mr Adasko's arguments into three. I do not intend to repeat its synopsis in full, save to say the following.
[53] In response to Mr Adaszko having been aggrieved by his resignation where the contents of the Deed of Acknowledgment were not to his satisfaction, the Full Bench found this first argument amounted to little more than a complaint that Mitford had failed to honour its side of the deal. The Full Bench highlighted that Mr Adaszko's evidence fell well short of establishing that he was forced to resign,[46] and that on his own evidence, he was merely asked to resign and was offered an inducement to do so in the form of an offer to forgive a debt.
[54] The further two points, namely Mitford would not have acted as a sound referee had Mr Adaszko not resigned, and that the forced resignation occurred after Mr Adaszko raised concerns about Mitford's conduct as a financial advisor, were not put at first instance and no evidentiary foundation had been proffered, said the Full Bench. At the costs hearing, Mr Adaszko did not further pursue his argument that Mitford would fail to act as a sound referee, but he did agitate the point of having made a complaint about Mitford's conduct to the AMP Your Call Report. Mr Adaszko was asked to direct the Commission as to where this evidence was given at first instance - he failed to do so but sought to adduce fresh evidence on this point.
[55] As noted, I accepted Mr Adaszko's evidence of the documents purporting to evince the complaints lodged with AMP. However, I consider that the submissions of Mitford are correct and that no weight should be attributed to those same documents. The documents were adduced after the hearing had concluded, therefore denying Mitford the opportunity to cross examine on the same.
[56] Importantly, in respect to Mr Adaszko's complaints to ASIC, the Full Bench observed that while it may be accepted that such complaints were made, there was no evidence to support Mr Adaszko's assertion that after he raised concerns, Mitford did not want him as part of its organisation. Mr Adaszko now presses a similar argument about the AMP Your Call Report, and while it may be accepted that Mr Adaszko made complaints to the AMP Your Call Report, the evidence takes his response to this application no further.
[57] Mr Adaszko submitted that at the time of making the appeal application - he appealed because he disagreed with the first instance decision after having done his best at first instance. Simply disagreeing with a decision reached at first instance is not a sound basis, if any basis, upon which to make a permission to appeal application. In effect, at the time of making the appeal application, Mr Adaszko was initiating a re-run of his case at first instance. As has been observed by the Full Bench previously, an appeal is not an opportunity to re-run the case below with the benefit of hindsight.[47]
[58] Turning to Mr Adaszko's unfair dismissal application, not only was Mr Adaszko's case significantly deficient at the time of making his application on the jurisdictional point of whether he was dismissed, it was also deficient regarding his argument on whether there were exceptional circumstances that warranted an extension of time in which to make his unfair dismissal application - noting of course that his application was some eight months late.
[59] On the basis of the facts known to Mr Adaszko at the time his application was made, it was evident, on any objective level, that his case had no reasonable prospect of success. While an applicant in seeking an extension of time within which to make an application is not required to explain the totality of the period of the delay in making the application, the circumstances so described by Mr Adaszko, did not explain the majority of the delay. Further, regarding the other factors considered under s 394(3), Mr Adaszko was aware at the time he made his unfair dismissal application that he had not disputed his dismissal prior to making the application and that he was forewarned of the end of his employment as he tendered his resignation around 20 November 2020 with it taking effect on 19 December 2020. On Mr Adaszko's version of the facts, as I have said, it is challenging to discern where exceptional circumstances may have been found or how one could arrive at a conclusion he had been dismissed. I consider that at the time the unfair dismissal application was made, it was so obviously untenable it could not succeed.
5.4 Section 611(2)(a) was the application vexatious or without reasonable cause
[60] Having regard to my conclusions in relation to s 611(2)(b) of the Act, it is not necessary for me to consider s 611(2)(a) of the Act. However, for the sake of fulsomeness, the following observations are made.
[61] The principles concerning the interpretation and application of s 611(2)(a) were comprehensively stated in Church v Eastern Health t/as Eastern Health Great Health and Wellbeing (Church).[48] A summary of these principles was set out by the Full Bench in Chapman v Ignis Labs Pty Ltd,[49] and later adopted by the Full Bench in Jeffrey Vassallo v Easitag Pty Ltd,[50] where the following points were highlighted:
(a) An application is made vexatiously when the predominant motive or purpose of the applicant is to harass or embarrass the other party or to gain a collateral advantage.
(b) Whether an application is made without reasonable cause may be tested by asking, on the facts apparent to the applicant at the time the application was made, whether there was no substantial prospect of success.
(c) In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. This must be evaluated in light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal.
(d) An application will have been made without reasonable cause if it can be characterised as so obviously untenable that it cannot possibly succeed, is manifestly groundless or discloses a case where the tribunal is satisfied it cannot succeed.
[62] If it were necessary to determine whether Mr Adaszko made his unfair dismissal application some eight or so months after his resignation vexatiously, I would find that he did.
[63] At first instance and on permission to appeal, it was found that Mr Adaszko was not forced to resign. As was identified by the Full Bench, Mr Adaszko was merely asked to resign and was offered an inducement to do so in the form of an offer to forgive a debt. Essentially, Mr Adaszko's real complaint is that he upheld his part of an agreement with Mitford by resigning, but Mitford did not honour its side of the bargain.
[64] Following on from the latter point, it is uncontroversial that on 29 May 2020, Mitford commenced legal proceedings against Mr Adaszko in the Magistrates Court of Western Australia regarding the Loan Agreement.[51]
[65] It was subsequent to Mitford instituting those proceedings that Mr Adaszko made his unfair dismissal application - very late in the day. The circumstances of the resignation have been well traversed and there is no need to repeat them at length, save to say, Mr Adaszko did not agitate any discontent about his resignation until his unfair dismissal application was made. With that unfair dismissal application on foot, Mr Adaszko applied for a stay of the Magistrate Court proceedings.[52] Given the timing of events, and the circumstances of the unfair dismissal application, I consider it open to find that Mr Adaszko sought to leverage his position in the Magistrate Court proceedings by pursuing the unfair dismissal application. I am satisfied that Mr Adaszko pursued his unfair dismissal application for the collateral purpose of frustrating Mitford's Magistrate Court proceedings and because he was aggrieved that Mitford had, in his view, reneged on the terms of the Deed of Acknowledgement.
[66] Having been unsuccessful at first instance before the Commission, Mr Adaszko then filed his appeal application. That appeal application in effect sought a re-run of Mr Adaszko's case at first instance. No errors of law or fact were identified. Mr Adaszko conceded at the costs hearing that he simply disagreed with the first instance decision. Further, in the grounds of his appeal, under the heading of 'public interest', Mr Adaszko set out:
I would also ask the FWC to assess their ability to assist with a dispute in accordance with a dispute settlement in regard to a civil procedure claim raised by Mitford Investments (Integro) in April 2020.[53]
[67] I am satisfied that the appeal application was made by Mr Adaszko because he remained aggrieved by Mitford's conduct regarding the Deed of Acknowledgement and sought to again raise attention to his plight in another jurisdiction. It was not because Mr Adaszko identified errors in the decision of the Deputy President at first instance; he simply disagreed with her decision because it did not align with the narrative he had convinced himself of. In such circumstances, the appeal application was vexatious. Mr Adaszko utilised the jurisdiction to ventilate issues unrelated to any error made on behalf of the Deputy President. Mitford was again compelled to contend with a former employee who had resigned of his own volition but who seemed intent on drawing attention to Mitford's purported conduct with a view to further harassing or embarrassing Mitford on the public stage.
[68] It is observed that Mr Adaszko also made complaints to both ASIC (albeit Mitford received no copy of the complaint) and the AFCA on 5 March 2021, and on 16 March 2021, he filed an application in the Industrial Magistrates Court.
[69] In light of my findings regarding s 611, it is unnecessary for me to consider s 400A.
[70] However, the following points are made. While Mitford submitted that it sought costs under s 400A, its argument was limited on the point. Further, in the Full Bench decision of Ewan Chapman v Ignis Labs Pty Ltd t/a Ignis Labs[54] doubt was expressed whether in an appeal from an unfair dismissal decision, there was power to order costs pursuant to s 400A of the Act.
[71] As the jurisdictional prerequisite in 611(2)(b) has been established, the next question concerns the exercise of discretion. That is, I must decide whether I should exercise discretion to order Mr Adaszko pay the costs claimed by Mitford. In the circumstances of this case, I am satisfied that Mr Adaszko should bear some of the costs of Mitford in relation to the unfair dismissal application and appeal application. After all, Mitford has incurred expense responding to both a meritless unfair dismissal application and a meritless appeal.
[72] In support of its position, Mitford referred to the decision of the Full Bench in Ben Timmins v Compass Security t/a Compass Integrated Security Solutions (Timmins),[55] where it was determined that the applicant had not completed the minimum employment period and there was unprotected from unfair dismissal. The Full Bench observed that Mr Timmins' notice of appeal referred to a significant error of fact and his submissions were to the effect that the decision was in error, yet there was nothing in the voluminous materials put by the applicant in the notice of appeal or in submissions which challenged the factual or legal basis upon which the first instance decision was made. Further the Full Bench observed:
Although the applicant might have been proceeding on the basis of some misguided notion of what might be possible outcomes of the unfair dismissal application made or of the appeal, we are satisfied that the requirements in s.611(2) for the making of an order for costs are met.
[73] It does not appear from the materials filed in respect of Mitford's application that it placed Mr Adaszko on notice that it intended to make an application for costs on an indemnity basis. Further, I accept that Mr Adaszko may have proceeded on the basis of some misguided notion, as referred to in Timmins, in respect of his unfair dismissal application and appeal application. However, in my view Mr Adaszko's applications were so lacking in merit they involved, as expressed by the Full Bench in Vassallo,[56] a delinquency of such a nature that it is appropriate that Mitford should be compensated by an order for indemnity costs.
[74] However, at the costs hearing, Mr Adaszko made limited submissions in relation to the costs claimed by Mitford. He appeared most preoccupied with 're-prosecuting' the case he had pressed at first instance and on permission to appeal. Further, as observed at paragraph [22] of this decision, whilst content for Mitford to rely upon its Form F6 and the Schedule insofar as those documents show that legal costs had been incurred, I was not satisfied that the document could be relied upon to determine the items of expenditure that could be covered by an order made. I, therefore, consider it appropriate to issue the orders set out at paragraph [3].
Mr. Damian Molony, of Armeli & Molony Lawyers, for the Applicant;
[1] Fair Work Act 2009 (Cth) ss 611, 400A and 402.
[4] Fair Work Act 2009 (Cth) s 402.
[6] Witness Statement of Justine Gilmour (Gilmour statement) [5], Digital Court Book (DCB) at pp 34 - 35; also see Transcript 16 October 2020 at [223], [230], [232] and [234].
[10] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [39].
[15] [2012] FWA 10164 [15] - [23].
[19] Fair Work Act 2009 (Cth) s 611 (emphasis added).
[20] Dino De Giusti v NSW Trains t/a NSW Trainlink [2018] FWC 1843 [15].
[23] [1989] HCA 61; (1989) 168 CLR 210, 216.
[24] [2011] FWAFB 4014 [10]
[26] Deane v Paper Australia Pty Ltd (2003) 121 IR 362 [7], [8].
[27] A Smith v Barwon Region Water Authority [2009] AIRCFB 769 [48].
[29] [2013] FWCFB 1811 [20].
[31] Rick Adaszko v Mitford Investments Pty Ltd ATF the JJG Trust T/A Integro Private Wealth [2020] FWC 5497 [26].
[33] Transcript dated 16 October 2020 PN [143].
[34] Rick Adaszko v Mitford Investments Pty Ltd ATF the JJG Trust T/A Integro Private Wealth [2020] FWC 5497 [58].
[37] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [20].
[39] Transcript, 9 February 2021 at [20].
[40] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [22].
[41] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [23].
[42] Transcript, 16 October 2020 at [108] - [114] and [116] - [117]; Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [30].
[43] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [39] - [42].
[44] Witness Statement of Ricki Adaszko (Adaszko Statement) [4].
[46] Rick Adaszko v Mitford Investments Pty Ltd ATF The JJG Trust t/as Integro Private Wealth [2021] FWCFB 719 [40].
[47] WorkPac Pty Ltd v M Bambach [2012] FWAFB 3206.
[48] [2014] FWCFB 810 [21].
[49] [2021] FWCFB 932 at [14].
[56] Jeffrey Vassallo v Easitag Pty Ltd [2021] FWCFB 3974 [18].
Printed by authority of the Commonwealth Government Printer
Mitford Investments Pty Ltd ATF The JJG Trust T/A Integro Private Wealth
Rick Adaszko [2021] FWC 4632
(1989) 168 CLR 210
(2003) 121 IR 362