Costs in fair work cases

These passages from a recent unfair dismissal case set out the legal principles which are involved in dealing with an application for costs.

“Consideration

[14] The costs claimed by Vesta are mainly the ‘costs’ of its CEO, Ms Toohey, spending

time in responding to the application. However, other than the two $120 costs relating to two

‘debrief’ meetings with her clinical supervisor, they are not actually costs expended by Vesta.

Rather, they are a claim for recompense for the value of the time spent by its CEO.

[15] The Commission cannot make an order for the payment of this type of ‘cost’. The

Commission’s discretion to order costs is limited to professional legal costs actually incurred

by a party. There is a long line of authority that the power of courts or tribunals to award costs

does not extend to recompense a self-represented party for the value of their time spent in

preparing their own case.

1 There are many reasons for this approach, including that doing so

would lead to the inequal treatment of litigants, as a party who was legally represented would

[2023] FWC 1354

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not be recompensed for their own time and effort, but a self-represented party would be. Courts

have also pointed to practical considerations such as the difficulty of quantifying the costs of a

self-represented party. Judgments have also raised the issue that the work completed by selfrepresented parties in most instances cannot be regarded as the equivalent of work completed

by qualified legal representatives, as it is usually less efficiently conducted and therefore tends

to add to the opposing party’s legal representation costs and drains court resources.2 Further, in

the context of matters before the Commission, a party is not able to be legally represented (and

therefore incur costs that may potentially be the subject of an order for costs) unless and until

they have been granted permission.

3 Accordingly, legal costs incurred where no permission has

been granted cannot be claimed.

[16] Accordingly, I find that the application must be dismissed in relation to the costs

concerning Ms Toohey’s time.

[17] Self-represented parties can, in some circumstances, be recompensed for some out-ofpocket expenses incurred. Vesta has claimed the sum of $240 for two meetings with her clinical

supervisor, one on 6 April 2023 and the other on 20 April 2023, the day after the application

was discontinued.

[18] As noted above, the application by Vesta was made under section 400A of the Act.

Section 400A provides a discretionary power for the Commission to make an order for costs

against a party. The Commission can only consider making such an order if it is satisfied that

the first party (in this case Ms Heritage) caused the claimed costs to be incurred because of an

unreasonable act or omission in connection with the conduct or continuation of the matter.4

[19] Vesta has not identified what it claims to be the unreasonable act or omission of the

applicant in connection with the conduct or continuation of the matter. I infer that Vesta’s

contention is based on its view that the applicant should have either not made the application

and/or should have discontinued it straight away upon receipt of the Form F3 filed on 3 April

2023 when Vesta asserted that it was a small business and raised the two jurisdictional

objections. However, no evidence or explanation has been provided to support Vesta’s claim

that the costs of the two ‘debrief’ sessions with Ms Toohey’s clinical supervisor/business

partner were costs that the applicant caused to be incurred. Further, there is no basis to conclude

that costs incurred the day after the applicant had discontinued her application, were costs the

applicant caused Vesta to incur.

[20] Applications for costs can also be made under section 611 of the Act. Unlike section

400A, which is directed at costs incurred in relation to the ‘conduct or continuation’ of the

matter, section 611 empowers the Commission to make an order for costs in relation to the

making of an application. The Commission can make an order for costs under section 611 if it

is satisfied that, relevantly, an application is made vexatiously or without reasonable cause or

where it should have been reasonably apparent that the application has no reasonable prospects

of success.

[21] However, my decision would not change if the application had been made under section

611 of the Act. Firstly, it is not necessarily the case that an application made by a person with

between 6 and 12 months’ service, was made vexatiously or without reasonable cause. Where

an employee has served between 6 and 12-month’s employment, the minimum employment

[2023] FWC 1354

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period required depends on whether the employer was a small business employer. The

definition of small business employer in section 23 of the Act includes certain casual employees

and employees of associated entities. An applicant’s view, expressed in the Form F2, may not

be correct and generally requires some evidence to determine whether the respondent is a small

business employer as defined in section 23. Prior to the applicant withdrawing her application,

no evidence had been produced by Vesta to establish that it was a small business.

[22] Where an applicant has identified (and confirmed) they were employed for less than 6

months’, administrative processes are in place whereby Commission staff inform them they are

ineligible to make an unfair dismissal application. However, an applicant may or may not be

eligible to make an unfair dismissal application where the employment period served is between

6 and 12 months. Such applications are administratively processed including being served on

the respondent, and the respondent can then elect to either participate in a conciliation or have

the objection dealt with by a Member of the Commission.

[23] Secondly, Vesta voluntarily chose to participate in the conciliation on 19 April 2023.

Ms Toohey was made aware at least by 4 April 2023 that this was a voluntary process.

Information to the same effect is available on the Commission’s website. Accordingly, I am not

satisfied that the applicant caused Vesta to incur the claimed costs.

[24] The application for an order for costs is dismissed.

 

Heritage v Vesta Counselling Service (2023) FWC 1354 delivered 16 June 2023 per O’Neill DP