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July 2019

Vexatious claims without reasonable prospects of success can result in cost orders

Charles Parletta Real Estate Pty Ltd v Ms Maria D’Ortenzio (2018)

The Case

Ms D’Ortenzio was a long-term employee of Charles Parletta Real Estate (CPRE) who had worked her way up into the position of fulltime Senior Property Manager.

CPRE terminated Ms D’Ortenzio’s employment after she:

  • made several unsubstantiated allegations against Mr Parletta (the owner of CPRE);
  • informed financial institutions there was litigation against CPRE;
  • failed to disclose the true nature of transactions, which denied CPRE a contractual benefit; and
  • had a number of performance and conduct issues.

Ms D’Ortenzio commenced unfair dismissal proceedings against CPRE.

The Verdict

In dismissing Ms D’Ortenzio’s unfair dismissal application and ordering her to pay CPRE’s costs, the Fair Work Commission (FWC) held that:

  • Ms D’Ortenzio’s “…motive, and predominant purpose in instituting [the] proceedings [was] to seek revenge
    against Mr Parletta” and to “…inflict as much damage on Mr Parletta as possible”;
  • she “should have realised that her case had no prospects of success”; and
  • her continuing “prosecution of the matter” was unreasonable.

The Lessons

FWC proceedings are generally no cost proceedings, that is, each party pays their own costs. However, where an employee is motivated by revenge to continue proceedings, despite it being clear they have no reasonable prospects of success, there is a risk that a cost order may be made. To increase the likelihood of a cost order being made against an employee who brings such proceedings, employers should, as part of a proper investigation and dismissal process,
ensure the employee is aware of the reasons for the dismissal and evidence that supports it. After proceedings are commenced, a well-crafted letter setting out the reasons for the dismissal and why the employee’s claim has no prospects of success may assist in a successful costs application.

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