Andrews v Uniting Church in Australia Frontier Services t/a Old Timers

[1995] IRCA 478

CATCHWORDS

INDUSTRIAL LAW - termination of employment - unlawful termination - nature of review of judicial registrar's exercise of powers.

PRACTICE AND PROCEDURE - review of judicial registrar's exercise of powers - nature of review - whether application for review a "proceeding".

COSTS - review of judicial registrar's exercise of powers - whether application for review a "proceeding" - whether application made vexatiously or without reasonable cause.

WORDS AND PHRASES - "proceeding" - "vexatiously or without reasonable cause".

Industrial Relations Act 1988 ss 170EA, 170EC, 170DB, 170DC, 170DE, 170DF, 377, 347, 360, 209, 170ED, 376.

Conciliation and Arbitration Act 1904 (repealed) ss 197A, 143.

Federal Court of Australia Act 1976 ss 4, 24.

Work Health Act 1986 (NT).

Service and Execution of Process Act 1901-1924.

Migration Act 1958.

Industrial Relations Court Rules Form 5, o 74 r 2.

Association of Professional Engineers, Scientists and Managers Australia on behalf of Cross v. Deniliquin Council (1995) 129 A.L.R. 418.

Brandy v. Human Rights and Equal Opportunity Commission (1995) 127 A.L.R. 1.

Bysouth v. Tawlord Nominees Pty. Ltd. (Unreported, 27th June, 1995).

Cheney v. Spooner (1929) 41 C.L.R. 532.

Foxcroft v. The Ink Group Pty. Ltd. (1994) 57 I.R. 65.

Gibson v. Bosmac Pty. Ltd. (1995) 130 A.L.R. 245.

Gregory v. Philip Morris Ltd. (1987) 74 A.L.R. 300.

Harris v. Caladine (1991) 172 C.L.R. 84.

Kanan v. Australian Postal and Telecommunications Union (1992) 43 I.R. 257.

Keating v. Teico Investments Pty. Ltd. (1994) 57 I.R. 339.

Marsh v. Adamson (1985) 5 F.C.R. 124.

Thompson v. Hodder (1989) 21 F.C.R. 467.

Viner v. Australian Building Construction Employees' and Builders Labourers' Federation (No. 1) (1981) 56 F.L.R. 5.

PATRICIA ANDREWS V. UNITING CHURCH IN AUSTRALIA FRONTIER

SERVICES TRADING AS OLD TIMERS.

NO. DI 94/198

Judge:     GRAY J.

Place:     MELBOURNE

Date: 19TH SEPTEMBER 1995

IN THE INDUSTRIAL RELATIONS     )
  )
COURT OF AUSTRALIA             )    No. DI 94/198
  )
DARWIN DISTRICT REGISTRY       )

B E T W E E N:

PATRICIA ANDREWS

Applicant

- and -

UNITING CHURCH IN AUSTRALIA FRONTIER
                 SERVICES trading as OLD TIMERS

Respondent

JUDGE:     Gray J.

PLACE:     Melbourne

DATE: 19th September 1995

MINUTE OF ORDER

THE COURT ORDERS that the applicant's application for costs is dismissed.

Note:Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS     )
  )
COURT OF AUSTRALIA             )    No. DI 94/198
  )
DARWIN DISTRICT REGISTRY       )

B E T W E E N:

PATRICIA ANDREWS

Applicant

- and -

UNITING CHURCH IN AUSTRALIA FRONTIER
                 SERVICES trading as OLD TIMERS

Respondent

JUDGE:     Gray J.

PLACE:     Melbourne

DATE: 19th September 1995

REASONS FOR JUDGMENT

On 16th December 1994, the applicant filed an application in the Darwin District Registry, pursuant to s. 170EA of the Industrial Relations Act 1988 ("the Act"). In accordance with s. 170EC of the Act, the application was referred to the Australian Industrial Relations Commission for conciliation on 4th January 1995. On 3rd February 1995, a commissioner certified that the Commission had been unable to settle the matter by conciliation.

On 3rd May 1995, the matter came on for trial before a judicial registrar of the Court at Alice Springs. Evidence was taken on three days. At the conclusion of it, the judicial registrar delivered judgment immediately. He found that the respondent had contravened ss. 170DB, 170DC, 170DE and 170DF of the Act. He found that it was impracticable to reinstate the applicant, because of medical opinion that she was unfit for any work until 17th May 1995. Pursuant to s. 170EA(3) of the Act, the judicial registrar extended the time within which the applicant could make her application to 17th December 1994. He ordered the respondent to pay to the applicant $14,659.86, authorising the deduction of taxation from that amount.

The judicial registrar granted a stay of the compensation order, conditional on the respondent paying the amount of compensation into Court, paying interest on it, and filing an application for review of his decision within twenty-one days of 5th May 1995.  The judicial registrar also made other orders, to which I need not refer in detail.

On 26th May 1995, the respondent filed in the Darwin District Registry of the Court an application for review of the judgment of the judicial registrar.  The application was in the form of Form 5 in the schedule to the Industrial Relations Court Rules, a form which is used for the commencement of a proceeding. The use of this form arose from a misunderstanding of the nature of an application for review of a judicial registrar's decision pursuant to s. 377 of the Act. Later in these reasons for judgment, I deal with the nature of such an application in greater detail.

On 23rd June 1995, I conducted a telephone directions hearing.  I fixed the hearing of the review for 13th July 1995 at Alice Springs and directed that it be conducted on the transcript of evidence and the exhibits tendered before the judicial registrar, supplemented by further examination and cross-examination and further medical evidence as required, and gave certain other directions. 

On 13th July 1995 at Alice Springs, the review was called on for hearing.  Counsel for the respondent requested an adjournment until such time as a claim by the applicant for compensation under the Work Health Act 1986 (NT) had been dealt with.  Counsel for the applicant opposed the adjournment.  In the course of the submissions of counsel for the respondent as to the adjournment, I raised a question of the issues which would be pursued on the review, in the light of a certain part of the evidence led before the judicial registrar.  Counsel for the respondent then asked for the matter to be stood down temporarily.  He sought and received instructions to abandon the review.  Counsel for the applicant did not oppose the abandonment.  I then made orders giving the respondent leave to discontinue the review, affirming certain of the orders of the judicial registrar and setting aside others, ordering that the sum paid into Court, together with any accrued interest, be paid out to the applicant's solicitors and ordering the respondent to pay the interest which the judicial registrar had ordered.  I reserved the question of the applicant's costs and gave directions as to the filing of written submissions and a schedule of the applicant's costs.  These last directions have been complied with.  The issue which I have to determine, therefore, is whether the respondent should be ordered to pay the applicant's costs of the review.

Section 347(1) of the Act provides:

"A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause."

The effect of this provision is that the respondent can only be ordered to pay the applicant's costs of the review if the review is a "proceeding" and if the respondent has instituted it "vexatiously or without reasonable cause". That is to say, it is only a party who has "instituted" a "proceeding" who can be ordered to pay costs. For the purposes of these reasons for judgment, I assume that the Court has an inherent power to award costs where s. 347 would not prohibit the exercise of such a power. See Canceri v. Taylor (1994) 123 A.L.R. 667.

The term "proceeding" in s. 347 of the Act is not defined. Section 360 contains a definition of the word which is applicable only to Part XIV of the Act. That definition is as follows:

"proceeding" means a proceeding in a court, whether or not between parties, and includes:

(a)an incidental proceeding in the course of, or in connection with, a proceeding; and

(b)an appeal;".

The definition is similar in its elements to the definition of "proceeding" in s. 4 of the Federal Court of Australia Act 1976.

In his written submissions, counsel for the applicant relied on the following passage from the judgment of the Chief Justice in Foxcroft v. The Ink Group Pty. Ltd. (1994) 57 I.R. 65, at p. 68. After quoting s. 347, his Honour said:

"In applying this section, it is important to note that it refers to costs incurred by another party in "a proceeding ... in a matter".  Within the one matter there may be a multiplicity of proceedings; for example, an appeal to a Full Court (see Marsh v Adamson (1985) 5 FCR 124; 11 IR 47), an application for leave to appeal (see Thompson v Hodder (1989) 21 FCR 467; 29 IR 339) or a motion for punishment for contempt (see Gregory v Philip Morris Ltd (1987) 20 IR 407). An application for review of a Judicial Registrar's decision is a proceeding in a matter."

Ordinarily, I should follow a judgment of a single
judge of the Court, construing a provision of the Act. In this case, however, I am convinced that it is fundamentally wrong to characterise as a "proceeding" for the purposes of
s. 347 of the Act an application to review the decision of a judicial registrar.

I note that, although the passage which I have quoted is in a reserved judgment, there is no clear chain of reasoning, which would lead to the conclusion that an application for review of a judicial registrar's decision should be viewed in the same way as an appeal, an application for leave to appeal or a motion for punishment for contempt of Court.  I note also that Foxcroft was followed by Keely J. in Bysouth v. Tawlord Nominees Pty. Ltd. (unreported, 27th June 1995).  Keely J. did not supply the reasoning which was missing in Foxcroft. 

An examination of the authorities to which the Chief Justice referred in Foxcroft sheds only limited light on the issue.  In Marsh v. Adamson (1985) 5 F.C.R. 124, a Full Court of the Federal Court of Australia, by majority, found that an appeal had been instituted without reasonable cause when it was covered by an express statutory prohibition on appeals. The judgment of the majority contains no discussion on the issue whether an appeal was a "proceeding", for the purposes of s. 197A of the Conciliation and Arbitration Act 1904, a provision substantially the same as they have now found in s. 347 of the Act. It is simply assumed that an appeal is a "proceeding". I do not suggest that that conclusion is wrong; indeed, I regard it as correct. My point is that there is no reasoning which would shed light on the meaning of the word "proceeding".

Thompson v. Hodder (1989) 21 F.C.R. 467 was concerned with an application for leave to appeal. A single judge of the Federal Court of Australia had discharged a rule to show cause in which orders were sought pursuant to s. 209 of the Act. An application had been made for a stay of the order discharging the rule to show cause, pending the hearing and determination of an appeal. It was thought, apparently, that the granting of a stay would have the effect of continuing certain interim relief which had been granted while the rule to show cause proceeding was pending. The stay was refused. Its refusal was a decision from which an appeal could only be brought by leave. An unsuccessful application for leave to appeal was followed by an application for costs against the applicants for leave.

The Full Court of the Federal Court of Australia dealt with an argument that s. 347 of the Act was inapplicable, because the application for leave to appeal was brought under s. 24(1)(a) of the Federal Court of Australia Act 1976, and not under the Act. At p. 469, the Full Court said:

"This argument ignores the careful wording of s 347(1) of the Act. The prohibition on orders to pay costs is applicable not to a proceeding arising under the Act, but to a proceeding in a matter arising under the Act. There is much authority as to what constitutes a "matter" for the purposes of Ch III of the Constitution. In substance, a "matter" is "a single justiciable controversy". See the joint judgment of Mason, Murphy, Brennan and Deane JJ in Fencott v Muller (1983) 152 CLR 570 at 608. In the present case, the justiciable controversy between the parties embraces the question whether the respondents should perform and observe the rules of the Union by taking or refraining from certain actions in relation to the charges laid against the appellants. Orders for performance and observance of the rules accordingly are sought pursuant to s 209 of the Act. The alleged obligation to perform and observe the rules in that way is thus the "matter" upon which each proceeding between the present parties has been founded, namely the rule to show cause granted on 7 June, the interim orders made on 9 June, the appeal filed on 17 October, the motion for a stay of judgment filed on 25 October and the application for leave to appeal from the judgment of O'Loughlin J. Each of those steps is a "proceeding" as defined in s 4 of the Federal Court of Australia Act. It is unnecessary at present to determine whether, in the absence of a similar definition in the Act, the word "proceeding" in s 347(1) should receive a similar interpretation. It is enough to say that, on any view, an application for leave to appeal, even from an interlocutory judgment, is a proceeding in its own right. That proceeding is, however, one in the same matter as were each of the earlier steps. It is plain that the matter arises under the Act. It involves the assertion of a right provided by s 209 of the Act: see Poulos v Waltons Stores (Interstate) Ltd (1986) 15 IR 335 at 340; 68 ALR 537 at 543 in the judgment of Gray J, with whom Keely J agreed."

It is to be noted that the Full Court expressly reserved the question whether the word "proceeding" in s. 347 of the Act should receive an extended meaning, in the absence of an extended definition, such as that found in s. 4 of the Federal Court of Australia Act 1976. It is that question which really arises for determination in the present case.

Gregory v. Philip Morris Ltd. (1987) 74 A.L.R. 300 involved a motion to punish a person for contempt of Court. The motion was brought by the respondent to the proceeding in connection with which the contempt was alleged to have been committed. The alleged contemnor was not a party to the proceeding. Following Viner v. Australian Building Construction Employees' and Builders Labourers' Federation(No. 1) (1981) 56 F.L.R. 5, at pp. 27-32, I held that a motion for punishment for contempt of Court was a separate and distinct proceeding from that in respect of which the contempt was alleged to have been committed. It followed that s. 197A of the Conciliation and Arbitration Act 1904 was inapplicable.

Viner also involved motions for the punishment of contempt of Court. The Federal Minister for Industrial Relations and two States had instituted a proceeding in the Federal Court of Australia, seeking an order pursuant to s. 143 of the Conciliation and Arbitration Act 1904, directing the cancellation of the registration of an organisation. The organisation moved the Court for orders punishing the proprietors of two newspapers for contempt and restraining them from committing any further contempt of the Court, as a result of the publication of certain newspaper articles. The motions were dismissed. Northrop J. awarded costs against the organisation, holding that, "The persons against whom the motion sought orders are not parties to the deregistration proceedings and do not come within the phrase in s. 197A as, "any other party to that proceeding"." (p. 32). In the course of his judgment, at p. 29, Northrop J. said:

"Reference has been made to the meaning to be given to the word "proceeding" and reference is made to Halsbury, (3rd ed.), vol. 1, p. 5.  Reference also has been made to the definition of the word "proceeding" in the Federal Court of Australia Act 1976, s. 4. In my opinion, the word "proceeding" in s. 197A of the Conciliation and Arbitration Act is to be read as an action between parties to a matter arising under the Act. In that sense, it is capable of including all steps arising in that matter and therefore is to be given both the meanings of a step in a proceeding as well as the action itself. That really does not assist greatly in the resolution of the matter, and in order to do this, it is necessary to analyze the nature of the relief sought in the motions and the basis upon which the motions come before this Court."

The passage from Halsbury's Laws of England, to which his Honour referred reads as follows:

"The term "proceeding" is frequently used to denote a step in an action, and obviously it has that meaning in such phrases as "proceeding in any cause or matter."  When used alone, however, it is in certain statutes to be construed as synonymous with, or including, "action"."

At p. 2, there is a definition of the word "action":

"An "action," according to the legal meaning of the term, is a proceeding by which one party seeks in a court of justice to enforce some right against, or to restrain the commission of some wrong by, another party.  More concisely it may be said to be "the legal demand of a right," or "the mode of pursuing a right to judgment".

What I understand Northrop J. to have been saying in Viner is that the word "proceeding" in s. 197A of the Conciliation and Arbitration Act 1904 was read correctly as meaning an action and not as referring separately to every interlocutory step taken in the conduct of such action.

In both Viner and Gregory, the fact that the motion was for orders against a non-party to the existing proceeding made it easy to characterise the motion as a "proceeding" in its own right. Such a motion is separate in a real sense from the proceeding commenced by the original application. In a similar way, both an appeal and an application for leave to appeal may be seen to create a new legal controversy between the same parties to an earlier legal controversy; the disputed issues may be within the ambit of the original legal controversy, but it is possible to regard the appeal or application for leave to appeal as a separate "proceeding". By contrast, a motion which might be made requesting interlocutory orders in the course of the pursuit or defence of an application may be regarded as part of the proceeding commenced by that application. There may be many such interlocutory motions. It is hardly to be supposed that the intention of the legislature was that a motion to strike out a pleading, seek leave to administer interrogatories or rectify inadequacies in the process of discovery of documents was to be regarded as a "proceeding" for the purposes of s. 347 of the Act, so that the issue whether such a motion was instituted vexatiously or without reasonable cause would arise on the determination of each such motion. The line may be unclear, but it exists, between a step which does not constitute a "proceeding" for the purposes of s. 347 of the Act and a step which does.

The issue is on which side of the line an application to review a decision of a judicial registrar under s. 377 of the Act falls. In Foxcroft, the Chief Justice held that it fell on the side of appeals and applications for leave to appeal and similar applications.  In so holding, his Honour analysed incorrectly the nature of a review of a judicial registrar's decision.

In the first place, what his Honour was purporting to review in Foxcroft was a decision of a judicial registrar to refuse to refer a matter to the Australian Industrial Relations Commission for conciliation, when the matter had been referred there already and returned with a certificate pursuant to s. 170ED(2). That was a decision which was not, by itself, subject to review. Section 377 of the Act provides not for the review of a judicial registrar's decision, but for the review of a judicial registrar's "exercise in the proceedings of a power delegated under s. 376". Section 376 provides that the Industrial Relations Court Rules may delegate to the judicial registrars all or any of the Court's powers in relation to proceedings in the Court, insofar as the proceedings relate to a claim for an amount not more than an amount specified in the rules or a claim for unlawful termination of employment.  The Industrial Relations Court Rules make such a provision for delegation in o. 74; by r. 2, all of the powers of the Court are delegated to each judicial registrar in relation to the claims permitted by the statute. It is only when the exercise of those powers is completed in relation to a particular application that the right of review is available in accordance with s. 377. It is the totality of the exercise of the powers of the Court by the judicial registrar which is subject to review, not the particular exercise of those powers in the making of a particular decision. Northrop J. pointed this out in Keating v. Teico Investments Pty. Ltd. (1994) 57 I.R. 339, at p. 340. Thus, it is only when the judicial registrar has made a final order that review can be sought. If this were not the case, trials before judicial registrars could be interrupted constantly by applications to review rulings on the admissibility of evidence and every interlocutory decision of a judicial registrar could be the subject of a separate application for review. That cannot have been the intention of Parliament. This conclusion also makes it important that judicial registrars should endeavour to avoid making orders of a final nature (particularly for reinstatement in employment), coupled with orders of an interlocutory kind (such as the reservation of costs). The right to a review will not arise until the judicial registrar has completed his or her exercise of the delegated powers of the Court in relation to the matter.

The other error into which the Chief Justice fell in Foxcroft was to equate an application for review of a judicial registrar's exercise of power with an appeal.  At p. 67, his Honour stated that he found "no error of law or logic or unfairness in [the judicial registrar's] decision to set the matter down for trial."  The true nature of a review has since been the subject of much closer analysis, first by Moore J. in Association of Professional Engineers, Scientists and Managers Australia on behalf of Cross v. Deniliquin Council (1995) 129 A.L.R. 418 and then by the Chief Justice in Gibson v. Bosmac Pty. Ltd. (1995) 130 A.L.R. 245. The analysis was done in the light of a closer examination of the judgments of the High Court of Australia in Harris v. Caladine (1991) 172 C.L.R. 84 and Brandy v. Human Rights and Equal Opportunity Commission (1995) 127 A.L.R. 1. It is now clearly established that, in order that the delegation of the powers of the Court to a judicial registrar be valid constitutionally, there must exist a review as of right. For similar reasons, the review provided by s. 377 of the Act is conducted by means of a hearing de novo, in the sense that "the parties are not bound by the course they took before the judicial registrar, where they have the right to adduce such further evidence as they wish, perhaps to adopt positions and put contentions different from those adopted before, and put to, the judicial registrar". (Gibson at p. 247). The duty of the judge is to ignore the findings and conclusions of the judicial registrar, except insofar as they may be adopted by the parties, and to deal with the matter afresh, even if relying on the evidence which was before the judicial registrar, supplemented as necessary.

In a sense, the exercise of the review is the real exercise of the judicial power of the Commonwealth in relation to the "matter" which constitutes the controversy between the parties. The exercise of delegated powers by a judicial registrar may be substituted for this exercise of judicial power, but only if each party is free to seek the exercise of the judicial power in relation to the matter. The difference between a review and an appeal is emphasised by the provision in s. 377(2) of the Act to the effect that the Court may review a judicial registrar's exercise of a power of the Court's own motion.

Counsel for the applicant referred in his written submissions to Cheney v. Spooner (1929) 41 C.L.R. 532, at pp. 536-537, in the joint judgment of Isaacs and Gavan Duffy JJ. All that that case established was that an examination of a person before a master of the Supreme Court of New South Wales as to the affairs of a company which had gone into voluntary liquidation was a "civil proceeding" for the purposes of the service of a summons to the examinee under the Service and Execution of Process Act 1901 - 1924. The summons was issued pursuant to leave given by a judge of the court, upon application by the liquidator. Nothing in the judgments suggests that any interlocutory application should, or should not, be regarded as a "proceeding". Counsel for the applicant also referred to a passage in the judgment of Gillard J. in Krextile Holdings Pty. Ltd. v. Widdows; Re Brush Fabrics Pty. Ltd. [1974] V.R. 689, at p. 693. In that passage, Gillard J. was construing the word "proceedings" in legislation relating to the winding up of companies. His Honour said that the word is not limited to proceedings in Court. Again, this has no bearing on the issue in the present case.

In my view, the nature of a review of a judicial registrar's exercise of the power is such that an application for such a review cannot be regarded as a "proceeding", for the purposes of s. 347 of the Act. It is an integral part of the proceeding which is commenced by application made under s. 170EA of the Act. It is properly made by notice of motion, which is to be treated in the same manner as a notice of motion seeking any other interlocutory order within the proceeding commenced by the application under s. 170EA.

If I am correct in this conclusion, then s. 347 of the Act makes it impossible for me to award costs to the applicant in respect of the review. In case the Full Court on an appeal should reach a different conclusion, I should state briefly my views on the other issues arising. If it were necessary for me to determine whether the respondent had instituted the review vexatiously or without reasonable cause, I should be forced to hold that it had not done so.

The applicant was employed by the respondent as a nurse.  She was so employed by virtue of written permission of the Department of Immigration and Ethnic Affairs.  That permission had been extended until 1st September 1994, on which day amendments to the Migration Act 1958 had been proclaimed to come into operation. The applicant had been notified in writing, and the respondent was aware, that her permission to work would then be "re-assessed".

On 8th August 1994, the applicant ceased work, claiming that she was suffering from an injury suffered in the course of her employment.  She claimed compensation under the Work Health Act 1986 (NT).

The respondent's director of nursing gave evidence that, on or about 30th August 1994, the administration officer of the respondent asked her:

"What happens if Patricia turns up with a clearance to work, but no visa.  And I said, well, we are in a double bind because the Work Health says we have to take her back.  The Work Health says if she turns up with a graduated return to work we have a responsibility to her, but the Immigration Act says I can't if the visa's not current....".

As a consequence, a letter was typed and signed, dated 30th August 1994, in which the director of nursing informed the applicant that, "As you are aware, your visa conditions expired as of 1st September, 1994 and we are no longer able to employ you."  As a result of the reassessment on 1st September 1994, the Department of Immigration and Ethnic Affairs granted to the applicant another permit to work for the respondent.

If this evidence remained in the form in which it was given to the judicial registrar, it seems to me that the respondent would be unable to resist a finding that it had terminated the applicant's employment in contravention of s. 170DF(1)(a), for reasons that included temporary absence from work because of illness or injury. Indeed, it was the mention of this aspect of the evidence in the interchange between counsel for the respondent and me which led to counsel for the respondent requesting that the matter be stood down and seeking instructions to abandon the review.

The fact that the respondent would most likely have lost the case on that ground, however, does not establish that the review was vexatious or without reasonable cause. There were other issues. On my reading of the evidence before the judicial registrar, I was at a loss to understand how he had made a finding of contravention of s. 170DC; nothing about the evidence suggested that the reasons for the termination of the applicant's employment were related to her conduct or performance. It is understandable that an employer would want to exercise its right of review in the hope of avoiding an adverse finding of that kind.

There still remained issues as to the consequences of a finding that the respondent had contravened any of the provisions of sub-div. B of Pt. VIA of the Act. The judicial registrar took the view that he could not order the reinstatement of the applicant because of medical evidence that she was unfit to work. He may have been incorrect in reaching that conclusion. It may have been possible, for instance, to have reinstated the applicant to her employment, on the basis that she would continue to claim under the Work Health Act 1986 (NT), and would then return to work when she became fit to do so.  In turn, the possibility of reinstatement might have affected the applicant's claim for compensation.  If compensation were awarded, its amount would have to be fixed according to the evidence on the review.  The applicant might have succeeded in establishing an entitlement to a greater sum than that awarded by the judicial registrar.  On the other hand, she might have been found to be entitled to a lesser sum.  The case illustrates the extreme difficulty of holding that an application has been instituted vexatiously or without reasonable cause when its outcome is unknown.  In this respect, I agree with what the Chief Justice said as a judge of the Federal Court in Kanan v. Australian Postal and Telecommunications Union (1992) 43 I.R. 257, at pp. 264-265:

"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."

In the present case, I am unable to say that the respondent's application for review was bound to fail in respect of all issues on the facts apparent to the respondent at the time when it sought the review.

In case I were to be found on appeal to have erred both as to whether s. 347 of the Act prohibits an award of costs in this case and as to whether the application for review was instituted vexatiously or without reasonable cause, I record my finding that I should have been prepared to fix the costs at the amount of $4,982.86 claimed by the Northern Territory Legal Aid Commission as its reasonable costs of the review. No objection was taken to the assessment of costs and it appears to me to be reasonable.

Having reached the conclusions I have, the order I make is that the applicant's application for the costs of the review is dismissed.

Counsel for the applicant:     Mr. A. McNab

Solicitor for the applicant:        Mr. G. Georgiou of Northern Territory Legal Aid Commission.

Counsel for the respondent:         Mr. G. Egan

Solicitors for the respondent:  Mr. W.B.A. Munro of Turner and Deane.

Date of Hearing:     13th July 1995

Date of Judgment:    19th September 1995

I certify that this and the preceding twenty (20) pages are a true copy of the reasons for judgment of his Honour Justice Gray

Associate:

Date: