[2010] FWAFB 9413 Note: Judicial review of this decision 25 August 2011 [2011] FCA 975 . [2010] FWAFB 9413 Download Word Document FAIR WORK AUSTRALIA DECISION Fair Work Act 2009 s.604 - Appeal of decisions Brent Gorman v Australia Post (C2010/5339) JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT DEPUTY PRESIDENT HAMILTON COMMISSIONER RAFFAELLI SYDNEY, 16 DECEMBER 2010 Appeal against decision [2010] FWA 7423 of Senior Deputy President O'Callaghan at Adelaide on 28 September 2010 in matter number U2009/10470 - application for unfair dismissal relief - application to dismiss application as frivolous or vexatious on basis of purported settlement agreement - requirements for exercise of power in s.587 of Fair Work Act 2009 not met. [1] This is an appeal under s.604 of the Fair Work Act 2009 (the Act) by Mr Brent Gorman against a decision of Senior Deputy President O’Callaghan given on 28 September 2010. In the decision, the Senior Deputy President dismissed an application made by Mr Gorman for relief against unfair dismissal on the basis that the continued pursuit of the application was vexatious and improper as the parties had reached an agreement on the settlement of the claim. [2] The history of the matter before the Senior Deputy President might be briefly stated as follows. Mr Gorman was employed by Australia Post from April 1989 until he was dismissed on 14 July 2009. An application for an unfair dismissal remedy was filed in Fair Work Australia (FWA) on 17 July 2009 by Mr Gorman’s union, the CEPU Communications Division. The application alleged that his dismissal was unfair because of “lack of evidence”. The application was not resolved by conciliation and, after several delays which partly related to criminal proceedings, the application came before the Senior Deputy President for arbitration on 6 April 2010. In the arbitration proceedings, both Mr Gorman and Australia Post were represented by legal counsel. Mr Gorman’s union was no longer involved in the proceedings. [3] At the outset of the proceedings on 6 April 2010, the parties sought a brief adjournment in order to progress possible settlement negotiations. Later that morning, the legal counsel for Mr Gorman advised the Senior Deputy President that there had been an “outcome” and that the parties sought an adjournment of the proceedings to a convenient date for mention to allow “for arrangements to be put in place to facilitate the outcome.” 1 Mr Gorman’s counsel requested a period of fourteen days for the formulation of the agreement as there would be some “toing and froing” and indicated that the parties would endeavour to have the matter discontinued prior to that date. 2 Counsel for Australia Post accepted the suggested time frame. 3 [4] No notice of discontinuance was filed and on 25 May 2010 Mr Gorman’s wife wrote to FWA requesting that the matter be relisted for hearing as Mr Gorman did not agree to the deed of settlement put forward by Australia Post. FWA was advised that Mr Gorman’s solicitors were no longer acting for him and that Mrs Gorman was now representing her husband. [5] In response to these developments, Australia Post sought that Mr Gorman’s application be dismissed as frivolous or vexatious pursuant to s.587 of the Act on the basis that a binding agreement in settlement of the matter had been reached on 6 April 2010. Australia Post requested that its application for the dismissal of the proceedings be determined before the hearing of the claim proceeded. The Senior Deputy President adopted this course. [6] In proceedings on 16 September 2010, evidence and submissions were presented as to whether a binding agreement had been reached between the parties on 6 April 2010. The Senior Deputy President considered s. 587 of the Act and the decision of a Full Bench of the Australian Industrial Relations Commission which “dealt with a circumstance inherently similar to that of Mr Gorman” (see Zoiti-Lancastro v Australian Taxation Office (2006) 154 IR 1) and decided to adopt the following approach to the determination of the matter before him: “[41] Taking the Act in its present form and that decision into account, if I am satisfied that there was an agreement reached on 6 April 2010, and if I am satisfied that Australia Post’s subsequent actions in proposing the Deed to Mr Gorman were consistent with that agreement, then section 587 provides a jurisdictional basis upon which the application could be dismissed as frivolous or vexatious.” [7] The Senior Deputy President determined that there had been a binding verbal agreement reached on 6 April and that the deed of settlement provided to Mr Gorman was fundamentally consistent with that agreement. Consequently it was found that the pursuit of the unfair dismissal claim was vexatious and improper and Mr Gorman’s application for an unfair dismissal remedy was dismissed. [8] We now turn to consider the key issue raised in the appeal proceedings, namely whether the Senior Deputy President erred in the circumstances of the present matter in exercising the power in s. 587(1)(b) of the Act to dismiss the unfair dismissal application. [9] Section 587 of the Act gives power to FWA to dismiss applications on certain specified grounds. It provides as follows: 587 Dismissing applications (1) Without limiting when FWA may dismiss an application, FWA may dismiss an application if: (a) the application is not made in accordance with this Act; or (b) the application is frivolous or vexatious; or (c) the application has no reasonable prospects of success. (2) Despite paragraphs (1)(b) and (c), FWA must not dismiss an application under section 365 or 773 on the ground that the application: (a) is frivolous or vexatious; or (b) has no reasonable prospects of success. (3) FWA may dismiss an application: (a) on its own initiative; or (b) on application. [10] For the power under s. 587(1)(b) to be exercised, it must be determined that the application before FWA is “frivolous or vexatious”. This would suggest that the application must demonstrably be of such little merit or pursued for such ulterior purposes or motives as would amount to an abuse of process. [11] The meaning of the words “frivolous or vexatious” in the context of the Order 26, rule 18 of the High Court Rules was considered by Barwick C.J. in General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125, at 129 as follows: “The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance".” (at 129) [12] Although this passage and other cases to which we were referred (see Naqvi v MPB (SA) Pty Ltd (1981) 36 ALR 379, at 383 and Heidt v Chrysler Australia Ltd (1976) 13 ALR 365) relate to court proceedings, they provide an indication of the type and nature of an application that might be found to fall within the meaning of the words “frivolous or vexatious”. Those words convey an intention that the power to dismiss an application and to thereby deprive an applicant of the right to pursue an otherwise available cause of action should only be used in limited circumstances. [13] In our view the inquiry for the purposes of s. 587(1)(b) should be primarily directed to the substance of the unfair dismissal application. In the present matter it cannot be concluded that Mr Gorman’s application for relief against unfair dismissal is “frivolous or vexatious” within the meaning of s. 587(1)(b) of the Act. This is because the substance of the application has not thus far been the subject of inquiry in proceedings before FWA. In this regard, we note that the merits of the application have not been the subject of evidence and submissions and indeed that any demonstrable lack of merit or substance in the initial application was not a ground relied upon in seeking that it be dismissed as being “frivolous or vexatious”. There is simply no basis on the material before FWA to conclude that the unfair dismissal application is “frivolous or vexatious” in the sense that it lacks substance or is an abuse of process. [14] The main basis for the Senior Deputy President’s decision was the finding that the continued pursuit of the application in circumstances where a settlement agreement had been reached was frivolous or vexatious. We have considered the evidence and submissions before the Senior Deputy President and the submissions on appeal regarding the nature of the outcome reached between the parties on 6 April 2010. Given the intention for the agreement to be committed to writing in a deed of settlement and the reference made to possible “toing and froing” between the parties in the formalisation of the agreement, we doubt that a binding agreement was concluded on that day. Rather a position was reached and the bones of an agreement identified on the basis that the agreement would be finalised, formalised and executed over the following 14 days. The outcome might be characterised in some respects as “an agreement to agree” but it was an outcome that clearly contemplated the conclusion of the agreement with the preparation of a deed containing provisions beyond those specifically dealt with in the discussions on 6 April and the execution of that deed by the parties. In our view, in the circumstances of the present matter it cannot be concluded that a binding agreement was reached by the parties before formal execution of a deed of settlement. In these circumstances, even on the Senior Deputy President’s reading of the power in s. 587(1)(b) of the Act, there was no proper basis for concluding that the requirements for the exercise of that power had been satisfied. [15] We recognise the difficulty of the practical situation which the Senior Deputy President had to consider in this matter, where it is submitted that there is a completed settlement agreement and the question arises as to whether the hearing of the matter should proceed. In this regard it is noted that the Senior Deputy President in reaching his conclusion relied upon the decision in Zoiti-Lancastro v Australian Taxation Office. In that case, the Full Bench decided that it was a proper exercise of the power in s. 111(1)(t) of the Workplace Relations Act 1996 to dismiss an application made under s.170CE of that Act alleging harsh, unjust and unreasonable termination of employment on the basis that there was a completed settlement agreement in evidence. Paragraph 111(1)(t) allowed the Commission to “generally give all such directions, and to do all such things, as are necessary or expedient for the speedy and just hearing and determination of the industrial dispute”. That power, however, is of a different character to that which is under consideration in the present matter. The exercise of the power in s. 587(1)(b) of the Act requires a finding that the institution or continuation of the application is “frivolous or vexatious”. In any event, as stated above, we do not consider that there was a “completed settlement agreement” in the present case as would provide a basis for not proceeding with the hearing of the application. [16] Having considered the evidence and submissions in the proceedings before the Senior Deputy President and the submissions in the appeal, we have decided that the Senior Deputy President fell into error in reaching his conclusion to dismiss Mr Gorman’s application. Given this finding, we have decided to grant permission to appeal and to allow the appeal. To the extent necessary, we also consider it appropriate to dispense with compliance of any requirements of the Fair Work Australia Rules which were not met in relation to the lodgement of the appeal. [17] The order made by the Senior Deputy President on 28 September 2010 4 is hereby quashed. The application by Mr Gorman should be returned to the unfair dismissal panel so that it might be allocated to a member of FWA for hearing on the merits. SENIOR DEPUTY PRESIDENT Appearances : Mrs Vanessa Gorman representing the Appellant. Mr I Colgrave with Mr T Martin for Australia Post. Hearing details: 2010. Adelaide: December, 6. 1 Transcript, 6 April 2010, PN 9-13 2 Transcript, 6 April 2010, PN 13-15 3 Transcript, 6 April 2010, PN 23. 4 PR502002 Printed by authority of the Commonwealth Government Printer <Price code C, PR504742>