Fair Work Act 2009

s.604 - Appeal of decision

[1] On 4 May 2022, we refused[1] permission for Dr Mohammad Amin (Darius) Souraki to appeal against an earlier decision[2] of Deputy President Young on 23 December 2021 in which the Deputy President found that Dr Azad was not an employee and not eligible to bring a general protections dismissal dispute under s.365 of the Fair Work Act 2009 (the Act).

[2] On 17 May 2022, Hammond Park Family Practice Pty Ltd (HPFP) applied for costs against Dr Azad in respect of the appeal decision (the costs application).

[3] On 18 May 2022, directions were set for the filing of materials in relation to the costs application. HPFP filed written submissions on 24 May 2022 and Dr Azad filed submissions on 7 June 2022. We have decided to deal with the costs application on the papers.

[4] The costs application is made pursuant to ss.611 and 375B of the Act. Section 611 provides:

(1) A person must bear the person's own costs in relation to a matter before the FWC.

(2) However, the FWC may order a person (the first person) to bear some or all of the costs of another person in relation to an application to the FWC if:

(a) the FWC is satisfied that the first person made the application, or the first person responded to the application, vexatiously or without reasonable cause; or

(b) the FWC is satisfied that it should have been reasonably apparent to the first person that the first person's application, or the first person's response to the application, had no reasonable prospect of success.

Note: The FWC can also order costs under sections 376, 400A, 401 and 780.

(3) A person to whom an order for costs applies must not contravene a term of the order.

Note: This subsection is a civil remedy provision (see Part 4-1).

[5] Section 375B provides:

(1) The FWC may make an order for costs against a party (the first party) to a dispute for costs incurred by the other party to the dispute if:

(a) an application for the FWC to deal with the dispute has been made under section 365; and

(b) 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 dispute.

(2) The FWC may make an order under subsection (1) only if the other party to the dispute has applied for it in accordance with section 377.

(3) This section does not limit the FWC's power to order costs under section 611.

[6] HPFP seeks an order for costs (including indemnity costs) against Dr Azad on the following grounds:

Application under s.375B

1. Dr Azad caused costs to be unreasonably incurred because of his unreasonable act in continuing the dispute by:

1. proceeding with an appeal which failed to disclose an arguable case of error in the decision under appeal,

2. proceeding with an appeal which failed to disclose an arguable case that the appeal was in the public interest, and

1. seeking to tender material in the appeal that was capable of being adduced at first instance and that was not sufficiently probative to be adduced on appeal.

Application under s.611

1. Dr Azad caused costs to be incurred in circumstances where:

1. the appeal was vexatious and for the predominant purpose of embarrassing the Deputy President and/or harassing and embarrassing HPFP, its officers, employees and others, and

2. the appeal was without reasonable cause as the appeal had no substantial prospect of success (it disclosed no arguable case of error in the decision at first instance and/or no arguable case that the appeal was in the public interest), and

1. it should have been reasonably apparent to Dr Azad that his case was manifestly untenable or groundless.

[7] An itemised schedule of costs sought by HPFP is annexed to this decision as 'Annexure 1'.

[8] The relevant principles guiding determination of an application for costs were recently summarised by a Full Bench of the Commission in Scott Tracey v BP Refinery (Kwinana) Pty Ltd[3] as follows (footnotes omitted):

"[19] The principles applicable to the construction and application of s 611 are well established. In Hansen v Calvary Health Care Adelaide Limited the Full Bench said in relation to s 611 generally:

"[15] It is trite to observe that the statutory and policy imperative underpinning a costs application under the Act, is that a person in a matter before the Commission must bear their own costs. So much is plainly obvious by the precise and unambiguous language of s 611(1).

[16] However, 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."

[20] In Church v Eastern Health t/as Eastern Health Great Health and Wellbeing, the Full Bench stated the following propositions, in summary, concerning s 611(2)(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.

• An application is not made without reasonable cause simply because the application did not succeed.

• 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.

• If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to characterise the application as having been made without reasonable cause.

• In relation to an appeal, the question becomes whether the appeal has no substantial prospect of success. The prospect of success must be evaluated in the light of the facts of the case, the judgment appealed from and the points taken in the notice of appeal. If there is a not insubstantial prospect of the appeal achieving some success, it cannot fairly be described as having been made without reasonable cause.

• 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.

[21] In relation to s 611(2)(b), the relevant principles were summarised by the Full Bench in Baker v Salva Resources Pty Ltd as follows (footnotes omitted):

"[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." (Footnotes omitted)

[9] Sections 611 and 375B require separate consideration. Section 611 is directed towards the conduct of a person at the time an application (or response) is first made and requires consideration of whether the application was "made" vexatiously or without reasonable cause, or whether it should have been reasonably apparent, at the time the application was made, that it had no reasonable prospect of success.

[10] Section 375B is directed to conduct by a party "in connection with the conduct or continuation of [a proceeding]" and requires consideration of whether that conduct caused costs to be incurred and was "an unreasonable act or omission."

[11] We will deal with HPFP's cost application insofar as it relies on s.611 first. We are not satisfied that Dr Azad's appeal application was made vexatiously or without reasonable cause, or that the appeal application had no reasonable prospect of success.

[12] Although Dr Azad's submissions in support of his appeal and permission to appeal were ultimately not persuasive, that does not mean his appeal was so lacking in merit or substance that it was made without reasonable cause. The appeal was lodged one month before the High Court refined the principles that guide the assessment as to whether a person is an employee or an independent contractor. These principles of course could not have been considered by the Deputy President because they were not in existence at the time the matter was determined. It was therefore conceivable that the application of these principles to Dr Azad's case might have warranted its re-consideration, even though we were ultimately not persuaded that this was necessary or appropriate.

[13] The submission that it should have been reasonably apparent to Dr Azad that his application had no reasonable prospect of success because he is proficient in English and considers himself "a genius" lacks merit. The fact remains that Dr Azad is not legally trained and represented himself in the appeal. It is hard to see what his language skills and level of intelligence (real or perceived) have to do with whether Dr Azad had an arguable case. If the effect of the submission is that anyone who can read English would have known that his case would fail, we reject the submission.

[14] Further, HPFP submits that Dr Azad acted vexatiously in bringing his appeal as he sought to embarrass or harass the Deputy President and/or HPFP, and for the collateral purpose of making a formal complaint about the Deputy President. We accept that many of Dr Azad's comments about HPFP officers and the Deputy President were ultimately irrelevant to the determination of his appeal. However, we are not satisfied that the predominant purpose or motive of Dr Azad in commencing the appeal was vexatious or for an improper purpose. We conclude that the jurisdictional prerequisites for the making of a costs order against Dr Azad under s.611 are not satisfied and, accordingly, decline to award costs on that basis.

[15] We turn now to HPFP's alternative proposition that indemnity costs should be awarded against Dr Azad pursuant to s.375B of the Act. HPFP seeks an order for costs by reason of Dr Azad's alleged unreasonable act in continuing an appeal that failed to disclose any relevant public interest grounds or any arguable case of appealable error.

[16] Subject to the grant of permission and some other limitations that are not presently relevant, a party who is aggrieved by a decision of the Commission may appeal the decision. The Full Bench determines whether permission should be granted, having regard to the relevant principles on appeal and the issues of fact and law that arise for consideration in a particular case.

[17] In his notice of appeal, Dr Azad identified what he perceived to be several significant errors in the decision at first instance. Ultimately, Dr Azad did not persuade the Full Bench that there was a relevant arguable case of error in the decision under appeal such that permission to appeal should be granted. However, we are not satisfied that the application for permission to appeal was so lacking in merit that the pursuing it was an unreasonable act or omission for which costs should follow.

[18] For the reasons above, the application for costs is dismissed.

[1] [2022] FWCFB 66.

[2] [2021] FWC 6683.

[3] [2021] FWCFB 4970.

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