Ampuero v H+Co Menswear [2016] FWC 3650 (6 June 2016) [2016] FWC 3650 FAIR WORK COMMISSION DECISION Fair Work Act 2009 s.394 —Unfair dismissal Patrick Ampuero v H+Co Menswear T/A H’s Menswear (U2015/15184) DEPUTY PRESIDENT BOOTH SYDNEY, 6 JUNE 2016 Costs application. [1] On 19 November 2015, Mr Patrick Ampuero made an application to the Fair Work Commission (the Commission) for relief from unfair dismissal against H+Co Menswear (H+Co). The matter was heard by me on 22 April 2016. I gave permission for H+Co to be legally represented by Mr Greg Christodoulou, solicitor and Mr Ampuero was assisted by his brother who is not a lawyer. [2] On 17 May I issued my Decision, upholding the jurisdictional objection of H+Co, finding that Mr Ampuero was not dismissed in accordance with s. 386 of the Fair Work Act 2009 (the Act). 1 Accordingly I dismissed Mr Ampuero’s application. [3] On 19 May 2016 H+Co made an application for me to exercise my discretion pursuant to s. 400A and s. 611 of the Act for the Applicant to pay the Respondent’s costs incurred in defending the application. H+Co filed written submissions on 19 May 2016 in support of its application and Mr Ampuero filed its response to H+Co’s Form 6 on 27 May 2016. H+Co filed their submissions in reply on 30 May 2016. [4] There being no factual conflicts relating to the application for costs, and with the consent of the parties, I have determined the question having regard to those written submissions without requiring any further appearance by either party. [5] H+Co’s submissions in support of its application state that: (a) The Applicant made his application vexatiously or without reasonable cause (611(2)(a)); and/or (b) It should have been reasonably apparent to the Applicant that his application had no reasonable prospects of success (611(2)(b)); and/or (c) There was an unreasonable act or omission of the Applicant in connection with the conduct or continuation of the matter (400A(1)). 2 Section 611 of the Act [6] I will consider s. 611 first. “611 Costs (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.” [7] Section 611(1) makes it clear that as a rule a person must bear their own costs in relation to an application before the Commission. Then s. 611(2) sets out exceptions to this rule. [8] Section 611(2)(a) can be broken into two parts. Firstly, did Mr Ampuero make his application vexatiously? Secondly, did he make his application without reasonable cause? I will consider these questions separately. Did Mr Ampuero make his application vexatiously? [9] The law in relation to vexatious applications has been considered in many cases. In Nilsen v Loyal Orange Trust , North J said: “…A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage.” 3 [10] The Application made by Mr Ampuero had as its central issue whether he had been terminated at the initiative of H+Co. It is this issue that I was called upon to determine and to which the evidence, both oral and written and the hearing of the matter were directed. The questions which I identified at paragraph 35 of my Decision 4 were: “Could that conduct be reasonably considered to be action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end?” [11] These questions raise a question of law going to what constitutes constructive dismissal or forced resignation. [12] The fact of there being a need to resolve a question of law is a matter that needs to be considered with regard to me exercising my discretion. 5 [13] H+Co submitted that Mr Ampuero had originally asked for the new remuneration structure in writing because he wanted to protect his legal position. That being, he saw a benefit in the new remuneration structure and wanted to ensure it could not be reversed. H+Co further submit that Mr Ampuero then altered his position to convert that benefit into conduct that forced him to resign. 6 [14] Mr Ampuero said he made his application because he: 1. was hurt by the actions of his employer; 7 and 2. had been advised by a lawyer to make a claim for unfair dismissal; 8 and 3. wanted an independent person to determine whether he had been treated unlawfully; 9 [15] I also note the closing submissions of Mr Ampuero’s brother: “We thought that we had a case because it seems Patrick has also been working for other employers. He’s never been treated in such a manner. This may be why I believe that it is a fair case, that he has a really good case for a harsh and it was mainly because of the actions of the employer - that had he not done that, everything would have been - like Patrick said, everything, he would have been working there for the rest of his life. Suddenly everything changed and everything collapsed and so suddenly. Things weren’t that good anymore.” 10 Conclusion [16] I am satisfied that Mr Ampuero genuinely believed, albeit mistakenly, that he was forced to resign and that he had a genuine case for unfair dismissal and he made an application accordingly. I find that there was no intent on behalf of Mr Ampuero to embarrass or harass H+Co. I find that he had no intention to progress his application for any reason other than to seek a remedy for his perceived unfair dismissal. Mr Ampuero’s employment relationship ended abruptly and he sought legal advice which lead him to file the application to obtain relief to which he considered himself entitled. [17] For these reasons I find that the application was not made vexatiously. Did Mr Ampuero make his application “without reasonable cause”? [18] This question is to be determined at the time the application was made, and not based on the course the matter took thereafter. [19] On the question of what constitutes ‘without reasonable cause’, Justice Wilcox in Kanan v Australian Postal and Telecommunications Union said that: ‘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. 11 [20] In Church v Eastern Health 12 the Judgment of Wilcox J was approved and adopted by a Full Bench of this Commission. That Full Bench in the same judgement went on to state: “[30] We now turn to the expression ‘without reasonable cause’. A party cannot be said to have made an application ‘without reasonable cause’, within the meaning of 611(2)(a), simply because his or her argument proves unsuccessful. The test is not whether the application might have been successful, but whether the application should not have been made.” [21] H+Co submit that upon seeking legal advice that H+Co was legally entitled to introduce the new remuneration structure, it should have been reasonably apparent to Mr Ampuero that he had no real prospects of success. Conclusion [22] I consider that the question that I addressed in my Decision 13 at paragraph 35 was an arguable point of law. Given this conclusion, and guided by the authorities quoted above I find that the application was not made without reasonable cause. [23] Section 611(2)(b) requires me to be satisfied that it should have been reasonably apparent to Mr Ampuero that his application had no reasonable prospects of success. Section 611(2)(b) can be broken into two parts. Firstly, was Mr Ampuero’s application without reasonable prospects of success? Secondly, should it have been reasonably apparent to him that this was the case? I will consider these questions together. Was Mr Ampuero’s application made without reasonable prospects of success and should this have been reasonably apparent to him? [24] This question is to be determined at the time the application is made. [25] In the case of Clothier v Ngaanyatjarra Media , 14 the Full Bench considered the meaning of the phrases “should have been reasonably apparent” and “had no reasonable prospect of success”. They cited Baker v Salva Resources Pty Ltd favourably as follows: “[15] In Baker v Salva Resources Pty Ltd, a Full Bench of FWA summarised the approach to be taken in relation to subsection 611(2)(b) of the Act as follows: ‘[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.” 15 Consideration [26] H+Co submitted that it should have been reasonably apparent to Mr Ampuero that he did not have reasonable prospects of success in his application when Mr Ampuero had received legal advice that H+Co were legally entitled to introduce the new remuneration structure. In response, Mr Ampuero says he was advised that it was only legal if he signed the new remuneration structure. 16 [27] Mr Ampuero states that it was reasonable for him to believe that he had reasonable prospects of success because at the time of making his application he had been given advice “…to go all the way on the basis that there was a breach of contract by the Respondent and to file an application for relief from unfair dismissal…” 17 Additionally, in cross-examination he answered that his legal advice was “that I had a case”. 18 [28] In his submissions, Mr Ampuero made the following points: • Once he was told about the change to his remuneration structure, he asked for it in writing. • He took that to a lawyer and that it is not unreasonable for a person who is not legally trained to seek and accept the advice of a lawyer. • It was considered and appropriate action to seek advice and to file a claim accordingly. [29] Simply because I did not find in his favour, does not mean that his application was ‘manifestly untenable or groundless or so lacking in merit or substance as to not be reasonably arguable’. [30] Considering the whole of Mr Ampuero’s case, including for the reasons stated above when I considered the concept of “without reasonable cause”, I do not find that Mr Ampuero’s application had no reasonable prospects of success. [31] For all intents and purposes Mr Ampuero was a self-represented applicant. Neither he nor his brother are legally trained. Mr Ampuero’s first language is not English. Taking this into account, and for the reasons given above, I am not satisfied that it was reasonable for him to believe that he had no reasonable prospects of success. Section 400A of the Act [32] I will now consider s. 400A. “400A Costs orders against parties (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. ” [33] I confirm that H+Co made an application in accordance with s. 402 of the Act. [34] To exercise my discretion in relation to an application made under s.400A I must be satisfied that Mr Ampuero caused the costs of H+Co to be incurred because of an unreasonable act or omission in connection with the conduct or continuation of his application. [35] In its submissions with regard to s. 400A , H+Co did not point to or identify any specific unreasonable act or omission of Mr Ampuero but rather sought to categorise the entire proceedings underneath this heading. [36] In Ferry v GHS Regional WA Ltd T/A GHS Solutions, 19 Commissioner Williams said: “The expression “unreasonable act or omission” is found in section 400A of the Act was previously found in section 658(3) of the Workplace Relations Act 1996 . A Full Bench of the Commission in Goffett v Recruitment National Pty Ltd considered the conduct of the respondent throughout the proceedings to determine whether there had been “deliberate or reckless” acts or omissions on its part which could be regarded as unreasonable and which caused the other party to incur costs in connection with the conduct of the proceedings.” [37] The hearing of this matter was concluded in one day. Mr Ampuero did not conduct himself in a way that could be described as unreasonable. Likewise I observed no omission that could be described as unreasonable. I have already found that it was not unreasonable for the application to have been made and that it was not made vexatiously. I find no unreasonable act or omission on behalf of Mr Ampuero and accordingly there is no basis for me to exercise my discretion pursuant to s. 400A(1) by making an order for costs against Mr Ampuero. Conclusion I find no basis in either s.611 or s.400A of the Act for an award of costs in favour of H+Co and accordingly their application is dismissed. I so Order. DEPUTY PRESIDENT Final written submissions: Respondent’s submissions on costs received 19 May 2016. Applicant’s response to the Respondent’s submissions on costs received 27 May 2016. Respondent’s reply to the Applicant’s response received on 30 May 2016. 1 Ampuero v H+Co Menswear T/A H’s Menswear [2016] FWC 3078 . 2 Respondent’s submissions in support of costs application dated 23 May 2016 at Paragraph [4]. 3 (1997) 76 IR 180 at page [181]. 4 Ampuero v H+Co Menswear T/A H’s Menswear [2016] FWC 3078 . 5 Kanan v Australian Postal and Telecommunications Union [1992] FCA 539 ; (1992) 43 IR 257 at pages [264] to [265]. 6 Respondent’s submissions in support of costs application dated 23 May 2016 at Paragraph [6] to [7]. 7 PN617 Transcript 22 April 2016. 8 Applicant’s response to the Respondent’s costs submissions dated 27 May 2016 at Paragraph [9]. 9 Applicant’s response to the Respondent’s costs submissions dated 27 May 2016 at Paragraph [8]. 10 PN1054 Transcript 22 April 2016. 11 [1992] FCA 539 ; (1992) 43 IR 257 at pages [264] to [265]. 12 [2014] FWCFB 810 . 13 Ampuero v H+Co Menswear T/A H’s Menswear [2016] FWC 3078 . 14 [2012] FWAFB 6323 at paragraph [15]. 15 [2012] FWAFB 6323 at paragraph [15]. 16 PN807 Transcript 22 April 2016; Applicant’s response to the Respondent’s costs submissions dated 27 May 2016 at paragraph [3]. 17 Applicant’s response to the Respondent’s costs submissions dated 27 May 2016 at paragraph [9]. 18 PN822 Transcript 22 April 2016. 19 [2016] FWC 3120 at [52]. 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