Home » Indemnity Costs in Unfair Dismissal Jurisdiction

It is rare for the Queensland Industrial Relations Commission to make a costs order against an applicant in an unfair dismissal matter, much less an indemnity costs order. However, in a recent case, Nicole Pender v Specialist Solutions Pty Ltd (No. B599 of 2004 per Commissioner Bloomfield, 17 May 2005), the Commission showed it is willing to do so where the applicant's conduct warrants it.

Background

Ms Pender was terminated following allegations that she had misappropriated funds from her employer, Specialist Solutions Pty Ltd (Specialist Solutions). She made an application to the Queensland Industrial Relations Commission (QIRC) claiming that her termination was harsh, unjust or unreasonable.

The application could not be resolved by conciliation and was referred to arbitration. However, as the matter proceeded to trial, Ms Pender acted in a number of ways which drew the ire of the QIRC. Specifically, she:

• insisted (over objections from Specialist Solutions) that the application should proceed to trial rather than await the outcome of other possible litigation (including a police investigation of the matter);
  repeatedly failed to meet a number of adjusted deadlines for the lodgement of her witness statement;


• failed to inform her own legal representatives of her whereabouts so that they could advise the QIRC of the reasons she had sought an unquantified adjournment less than a week before the scheduled trial (resulting in the abandonment of a six-day trial);


• failed to comply with directions from the QIRC to provide her current address, consult a medical specialist and obtain a report about her fitness to attend the trial; and


• failed to appear at the final hearing of the matter when she was on notice that her application would be dismissed if she failed to appear.

Decision

Commissioner Bloomfield was satisfied that Specialist Solutions had been put to great cost in preparing its defence of the application, and this was necessary once the matter had been set down for trial. He accepted that the extent of the defence evidence (which included 12 witness statements comprising approximately 300 pages of text, and with 2000 pages of annexures) was reasonably necessary, given the nature of the allegations.

Commissioner Bloomfield held that, while the costs incurred by Specialist Solutions in defence of the matter were substantial, he was satisfied that the schedule of costs prepared by their solicitors contained only matters associated with their defence and nothing more. He determined that it would be unfair if Specialist Solutions was not awarded its costs on an indemnity basis, and ordered Ms Pender to pay nearly $110,000 in costs.

Implications?

Indemnity costs will normally be ordered only if a party behaves in a manner which is frivolous, vexatious, or otherwise abnormal. In this case, the Commission concluded that Specialist Solutions had been required to incur substantial costs in preparing for a trial which Ms Pender had no intention of allowing to proceed.

It is unlikely that this case marks a sea change in the approach adopted toward unfair dismissal applicants by the QIRC and other Australian industrial tribunals. Given the beneficial nature of unfair dismissal legislation, and the informality of the jurisdiction, breaches of technical requirements will not normally invoke sanctions. What the case does show, however, is that those who plainly and deliberately disregard tribunal processes – resulting in costs and inconvenience to the other party and to the tribunal – can be subjected to punitive costs orders.