Cleary Bros (Bombo) Pty Ltd v Cvetkovski (EOD)

[2001] NSWADTAP 10

Appeal Panel

CITATION:	Cleary Bros (Bombo) Pty Ltd -v- Cvetkovski (EOD) [2001] NSWADTAP 10
PARTIES:	APPLICANT Cleary Bros (Bombo) Pty Ltd RESPONDENT Lou Cvetkovski
FILE NUMBER:	999020
HEARING DATES:	22/06/00
SUBMISSIONS CLOSED:	06/22/2000
DATE OF DECISION:	05/03/2001
DECISION UNDER APPEAL:	Cvetkovski -v- Clearly Bros (Bombo) Pty Ltd
BEFORE:	Latham M - DCJ (Deputy President); Rice S - Judicial Member; Strickland J - Member
CATCHWORDS:	costs - leave to appeal out of time - Race Discrimination - in work - Victimisation
MATTER FOR DECISION:	Principal Matter and Costs Order
FILE NUMBER UNDER APPEAL:	238 of 1996
DATE OF DECISION UNDER APPEAL:	05/26/1999
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977
CASES CITED:	Opera House Limited v Carr [1999] NSWADTAP 6 Gallo v Dawson (1990) 93 ALR 479 Langley v Niland (1981) 2 NSWLR 104 Reyes-Gonzalez v Sydney Institute Of Technology [1998] NSWEOT 6/3/98 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSLWR 247 Kiama Constructions Pty Ltd v Davey (1986) 40 NSWLR 639 Maynard v Dabinett [1999] NSWCA 296 Hills Grammar School v Human Rights & Equal Opportunity Commission [2000] FCA 658 Jones v Dunkel (1959) 101 CLR 298 Gallagher v NSW Police Service [1998] NSWEOT Penfold v Penfold (1980) 144 CLR 311 Australian Postal Commissioner v Dao and Anor (No 2) (1986) 6 NSWLR 497 House v R (1936) 55 CLR 499 Kennedy v Maher & Holmes Advertising Pty Limited a decision given on 4 June 1998 (unreported)
REPRESENTATION:	APPELLANT C Ronalds, barrister RESPONDENT A Healey, barrister
ORDERS:	1. The appeal is allowed to have been made within the time it was made, which date was 28 days after the costs decision of 31 August 1999.; 2. The award of damages for economic loss ($32,651.91) of 26 May 1999 is set aside.; 3. The order of the Tribunal of 31 August 1999 pursuant to section 114 (2) of the Anti-Discrimination Act is set aside.; 4.The following order is made in substitution: ; Each party to the inquiry shall pay their own costs of the inquiry.

REASONS FOR DECISION

1 This appeal arises out of a decision of the Tribunal which was given in two parts, the first as to the merits of the complaints, which was delivered on 26 May 1999, the second as to the application for costs by the successful complainant (the respondent to this appeal), which was delivered on 31 August 1999. The complaints which were upheld were one of discrimination on the grounds of the complainant’s race, and the race of an associate, unlawful discrimination on the grounds of an imputed disability and one of victimisation, all in the course of Mr Cvetkovski’s employment by the appellant at its Albion Park Rail concrete plant. The hearing took six (6) days, during which time a significant amount of evidence was put before the Tribunal by both parties.

2 Although five of the six grounds of appeal set out in the Notice of Appeal were pressed before the Panel, they essentially resolved themselves into three principal grounds. They were :-

(a) The Tribunal erred in its decision to award damages for economic loss.


(b) The Tribunal failed to take account of the evidence, in that its findings were either contrary to the evidence or unsupported by evidence.


(c ) The Tribunal’s discretion to award costs miscarried.


A preliminary issue arose in respect of an application by the appellant for leave to appeal, which was opposed by the respondent to the appeal.


Leave to Appeal

3 The last day of evidence in the inquiry was 30 September 1998. Submissions were made on 29 January 1999, and the Tribunal reserved its decision. The Tribunal’s decision was handed down, and orders were made, on 26 May 1999. As noted above, the Tribunal found the complaints substantiated, and ordered Cleary Bros to pay compensation.

4 Time for an appeal ran for 28 days from 26 May (s113 Administrative Decisions Tribunal Act (ADTA)). No appeal was lodged within that time.

5 When it handed down its decision on 26 May, the Tribunal granted leave to the parties:

“to make an application to the Tribunal to determine whether or not costs, and to what extent costs, should be awarded in this enquiry (sic) and that such application be made within 21 days from the date of decision, and if no application is received in that time, the Tribunal directs (sic) that there be no order as to costs in this enquiry”.

6 Mr Cvetkovski made an application for costs within the time specified by the Tribunal. The application was heard on 31 August 1999, and on that day the Tribunal made an order that the appellant pay Mr Cvetkovski’s costs of the inquiry.

7 As deposed by Mr Ronald Bryant (an officer of the appellant company) on 28 September 1999, the appellant had decided “on commercial grounds” not to appeal the decision of 26 May. For reasons discussed below, it was not until the appellant was ordered to pay costs on 31 August that it decided to appeal the 26 May decision, by which time an appeal appeared to be out of time.

8 The appellant submitted that the Panel ought to grant leave. In the alternative, it was submitted for Cleary Bros that time under s113 did not run until the handing down of the costs decision on 31 August, in which case the appeal against the decision of 26 May is in time.

9 The alternative argument is untenable. Time in this case ran from the time that written reasons of an original decision, as defined, were furnished (ss 113 (3), 112(1), 89 and 7 ADTA). The relevant date was 26 May. There can be no argument that time to appeal the merits of the Tribunal’s decisions, and orders made on 26 May, expired on 23 June.

10 The issue in these proceedings then is whether Cleary Bros should be granted leave to appeal pursuant to 113(3)(b) ADTA. An issue more generally for the effective and fair operation of the Tribunal is how the dislocation in timing which has given rise to this situation can be avoided in future.

11 The principles on which such an application will be considered in this jurisdiction have been set out in the decision of Opera House Limited v Carr [1999] NSWADTAP 6. In particular, whether to grant leave will be considered in light of the authority of Gallo v Dawson (1990) 93 ALR 479, and leave to appeal out of time should not be granted liberally.

12 Mr Cvetkovski relies on his right to retain the judgment of the Tribunal which vested on the expiration of the time for appeal. He says that there is no “adequate explanation” for the delay in appealing. Mr Cvetkovski says that Cleary Bros made no mistake, was under no misunderstanding, and made a deliberate decision not to appeal. Further, Mr Cvetkovski says that appellant complied with the Tribunal’s orders of 26 May and made no application for a stay.

13 It is true that Cleary Bros knew what it was doing when it did not appeal within time. But Cleary Bros was in a difficult position not of its own making. It is clear from Mr Bryant’s affidavit of 28 September 1999 that Cleary Bros had decided “on commercial grounds” not to appeal the decision of 26 May. It was not until Cleary Bros was ordered to pay costs on 31 August that the balance of commercial considerations tipped in favour of appealing the 26 May decision, by which time an appeal was out of time.

14 At the time of the decision of 26 May, and on 23 June when time to appeal expired, Cleary Bros had decided that whatever view it took of the merits of the decision, the cost to it of appealing was such that it was not a worthwhile commercial undertaking. It is relevant to note that the rule on appeal is also that each party will pay its own costs, except in special circumstances.

15 On 23 June when time to appeal expired, Cleary Bros was aware that it faced the risk of costs because of the outstanding costs application. In Cleary Bros’s view it was not so exposed to costs as to warrant lodging an appeal which it did not want to pursue because of disproportionate expense.

16 The ‘commercial’ nature of the decisions, at first not to appeal and then to appeal, is explained by the combined effect of the amount ordered to be paid as compensation in this case, and the costs rule in the jurisdiction.

17 The compensation award on 26 May was $43,651.91, of which $32,651.91 was for economic loss. Cleary Bros had to pay this amount of compensation, and bear its own legal costs for a six day hearing, but would not expect, in the usual course, to be liable for Mr Cvetkovski’s costs.

18 It is legitimate, and perhaps invariably the case, that commercial considerations bear on a decision whether to pursue legal proceedings of any sort, original or appellate. Decisions made on commercial considerations do not necessarily correspond with a view as to the merits of the matters in issue.

19 The commercial considerations will be more acute when there is a risk of paying the other side’s costs. In this case Cleary Bros was unsure whether it was facing that risk or not. In a jurisdiction where there is a presumptive rule against an adverse costs order being made, Cleary Bros was entitled to make its calculations on the basis that it would not have to pay the other sides costs. That calculation changed when adverse costs were in fact ordered.

20 The Panel acknowledges that Cleary Bros could have, within time, lodged an appeal which it did not at that stage intend to pursue. The appeal could then have been discontinued if there was no costs order and, perhaps, prosecuted if there was a costs order. Lodging the appeal would also have given Cleary Bros access to the Panel’s interlocutory power under s117 ADTA to stay the Tribunal’s order.

21 Because of the timing of the appeal limitation and of the costs decision, Cleary Bros was necessarily engaged in a gamble of sorts. The gamble concerned not the likelihood of being successful in appeal proceedings, but whether it would be able to commence appeal proceedings at all. Cleary Bros should not have been put in that position, and nor can it fairly be penalised for failing to take the alternative course described above.

22 Cleary Bros did pay the compensation as ordered. It was obliged to (s116 Anti-Discrimination Act), and there is no power in the Tribunal that Cleary Bros could invoke to stay the Tribunal’s orders of 26 May pending the results of the costs application.

23 Mr Cvetkovski says that the deliberate approach Cleary Bros took to the timing of the appeal, and to the payment of the compensation, disentitles it from leave to appeal. It was, however, the only sensible course open to Cleary Bros in the circumstances described.

24 In assessing whether grant of leave would do justice between the parties, the Panel is of the view that the circumstances described constitute an adequate explanation of Cleary Bros’s delay in lodging the appeal.

Alleged Prejudice to the Respondent

25 Mr Cvetkovski submits that he would suffer prejudice if leave were to be granted. The prejudice identified is only that which would follow from Cleary Bros being successful on the appeal.

26 It is true that Mr Cvetkovski’s right to retain the judgment vested when the time for the appeal expired. But as the Panel has described above, Cleary Bros’s failure to appeal within time so as to prevent that vesting was understandable in circumstances not of Cleary Bros’s making.

27 Mr Cvetkovski has not acted on the Tribunal’s decision to his detriment, and will suffer no direct detriment from the appeal being allowed to proceed. He might lose, in whole or in part, the right to the judgment, but the very fact that the ADTA allows for the possibility of leave indicates that such a result is anticipated, otherwise the time limit would be fixed, with no discretion.

28 In assessing whether grant of leave would do justice between the parties, the Panel sees no prejudice to Mr Cvetkovski that prevents leave being granted.

Merit of the appeal

29 Technically the question of leave is a threshold question. It was argued at the same time as the appeal was argued. Mr Cvetkovski says, correctly, that the merit of the appeal is a relevant consideration in whether to extend time. It is apparent from the submissions filed by both parties in the Appeal that there are real issues raised in relation to the some aspects of the decision of 26 May.

30 In assessing whether grant of leave would do justice between the parties, the Panel is of the view that there is sufficient merit in the appeal to militate in favour of a grant of leave.

Public interest

31 Finally Mr Cvetkovski says that it is not in the public interest “to encourage potential appellants to wait until they receive any decision in relation to costs”. The Panel agrees, and makes some observations below that will, it is hoped, ensure that the situation is not created again.

32 It was not, however, the fault of Cleary Bros that it was unable to properly assess its approach to an appeal within time, and the public interest is better addressed by trying to avoid such a situation arising than it is by refusing leave to Cleary Bros in this case.

33 In assessing whether grant of leave would do justice between the parties, the Panel does not believe that the public interest is directly relevant to, or if it is, that it is best served by, refusing to grant leave.

Conditions on leave

34 Mr Cvetkovski has submitted that if leave is granted it should be on terms, for example that Cleary Bros pay Mr Cvetkovski costs if unsuccessful on appeal.

35 While the Panel has power to make its orders subject to conditions it could not impose a condition that would effectively decide in advance the way in which the Panel’s discretion to award costs should be exercised. In any event there is no basis suggested, not is any apparent, for imposing a condition on the grant of leave in this case.

Addressing the issue in future

36 The situation faced by Cleary Bros arose because of a combination of the way the Tribunal went about considering the question of costs, and the 28 day time limit for appealing which ran from the date of the Tribunal’s decision.

37 The Tribunal in this case gave the parties 21 days from the date of the decision on the merit of the complaints to make an application for costs. That was only seven days short of the time for lodging an appeal. This is not an uncommon order for the Tribunal to make, but this case demonstrates that it can, in circumstances, be problematic.

38 The availability of part-time Tribunal members is variable, and the availability at short notice of Tribunal hearing rooms is limited. It is unlikely that the costs issue, if not decided at the same time as the substantive matter, could ever be listed, argued and decided in sufficient time for a party to make a fully considered decision to appeal within the 28 day period.

39 It is questionable in any event whether the discretionary question of costs under s114(2) is properly a matter for application and argument by the parties. Section 114(2) empowers the Tribunal “to make such order . . . as it thinks fit” where it is “of the opinion . . . that there are circumstances justifying it doing so”. It is not an issue in relation to which the Tribunal has an obligation to conduct an inquiry, to take evidence, or to consider the parties’ views. The initiative for a costs order is with the Tribunal, not with parties.

40 A Tribunal, having conducted an inquiry, will ordinarily make an order in terms of the presumption in s114(1). It may, where it is of the opinion that there are circumstances justifying it doing so, make such order as it thinks fit under s114(2).

41 If, in relation to an order it is minded to make under s114(2), a Tribunal wishes to hear from the parties, then it should endeavour to set a timetable which will allow the question of costs to be decided well before the expiration of 28 days from the date that it makes a decision in the substantive matter.

Grant of leave

42 In the circumstances of this case the Panel is of the view that to strictly impose the time limit for appeal would result in an injustice to the applicant for leave. Leave to appeal out of time should be granted. In terms of s113(3)(b) ADTA, the Panel orders:

(1) that the appeal is allowed to have been made within the time it was made, which date was 28 days after the costs decision of 31 August 1999.

Economic Loss

43 The appellant contends that, in awarding damages for economic loss, the Tribunal fell into jurisdictional error in that it took into account alleged conduct on the part of Cleary Bros (the respondent/appellant) which occurred after 7 August 1995, being the date of the last correspondence with the Board which grounded the complaint. The argument turns on a construction of s 113(1)(b)(i) of the Anti Discrimination Act 1977 (the AD Act), which provides that the Tribunal may “order the respondent to pay to the complainant damages …. by way of compensation for any loss or damage suffered by reason of the respondent’s conduct.” According to the appellant, “the respondent’s conduct” can only be that which was delineated by the complaint, because that is what founds the Tribunal’s jurisdiction under s. 94 of the AD Act. In addition, the appellant contends that there was no economic loss after 7 August 1995 and there was no basis upon which the Tribunal could award damages for economic loss, given its finding at para 77 of the decision that there had been no constructive dismissal on 2 September 1996, being the last day upon which the complainant attended work at the respondent’s premises.

44 It is trite law that a written complaint to the Board must enable the identification of an alleged contravention of the Act, although it need not allege the relevant facts, which are the basis of the alleged contravention, with particularity : Langley v Niland (1981) 2 NSWLR 104. It is perhaps less perfectly understood that alleged conduct on the part of a respondent, which is said to contravene the AD Act on the same grounds as that identified by the written complaint, cannot fall within that complaint if it lies outside the period identified by the written complaint, which was the subject of the Board’s investigation and referral to the Tribunal : Reyes-Gonzalez v Sydney Institute Of Technology [1998] NSWEOT 6/3/98.

45 The Tribunal seemed to appreciate the limits of its jurisdiction when it said at para 4 of its decision of 26 May 1999 :-

“As a preliminary issue in the enquiry, the Tribunal ruled that the scope of the issues to be determined by the enquiry were limited to the matters the subject of the complaint lodged with the Board on 15 May 1995 and amplified to the extent of the comments in the reply to the Board by the Complainant in his letter to the Board of 7 August 1995. The Tribunal ruled that the Complainant was not entitled in this enquiry to produce evidence of instances which may have occurred after 7 August 1995 which would constitute an item of further complaint.”

46 Immediately after relating this ruling, the Tribunal went on to say that the complainant was able to present evidence in order to establish a connection between the alleged unlawful acts of discrimination outlined in the complaint and the complainant’s cessation of employment on 2 September 1996. That evidence was to the effect that the same conduct alleged in the complaint, which grounded the Tribunal’s jurisdiction, continued after 7 August 1995 up to 2 September 1996. Whilst this approach appears at first blush to be contradictory, the Panel is satisfied that the Tribunal was doing no more than outlining the limits of the inquiry for the purposes of establishing the complaint, on the one hand, and the limits of the inquiry for the purposes of establishing whether or not there was a constructive dismissal on 2 September, on the other hand. There is nothing inherently wrong with that approach. The focus of a determination under s113(1)(b)(i) for these purposes is whether or not the conduct, the subject of the complaint, can be causally linked to the complainant’s departure from work. That may require a consideration of what occurred in between those two events.

Factual Finding Inconsistent with Economic Loss

47 However, the Tribunal fell into error in a far more fundamental respect, namely, in finding that there was no constructive dismissal and then awarding damages for economic loss which could only arise if constructive dismissal had been established.

48 The Tribunal’s decision was lengthy and comprehensively articulated. After setting out the background, relevant statutory provisions, the structure and organisation of the respondent company, and the chronology, the Tribunal went on to deal with the two claims of racial discrimination (one relating to his own race and the other relating to the race of female associates). In doing so, the Tribunal thoroughly reviewed the evidence on these issues over more than thirty (30) paragraphs, before making findings in the complainant’s favour (paras 72 - 74). Included in those findings was that the complainant “was forced by the adverse impacts of such conduct on his health to cease to attend at the Plant from 2 September 1996.” The Tribunal then turned to the question whether the discrimination had occurred in the workplace for the purposes of s8(2)(a)(b) and (c) of the AD Act. It found that the complaint under s8(2)(a) was made out, but rejected the complaints under the other two limbs of s8. Of primary importance in this appeal, the Tribunal made an express finding that, for the purposes of s8(2)(c), there was no constructive termination of the complainant by the respondent/appellant. The Tribunal was satisfied on the evidence that the respondent/appellant had left the complainant’s position open for him to return to work at the plant (para 77).

49 There is no further reference to the circumstances surrounding the complainant’s cessation of employment until the Tribunal considers the question of economic loss (paras 107 ff). At para 109 the Tribunal says :-

“The Tribunal does not accept that it was open to the Complainant to return to work with the Respondent. Although the parties had not formally or constructively terminated the employment of the Complainant, in the circumstances of the history of that employment the Respondent cannot avoid the consequences of its unlawful conduct by claiming that ….. the Complainant could have returned to his former position in its employ.” (emphasis added)

50 Common to these two statements by the Tribunal, that is, the finding at para 77 and the para set out above, is that there was no constructive dismissal. In the face of not one, but two expressions of that finding, it cannot be suggested that the Tribunal’s meaning is open to interpretation. Only the constructive dismissal of the complainant could found an award for economic loss. In other words, in the absence of a finding that the respondent had constructively dismissed the complainant, it was not open to the Tribunal to determine that the complainant had suffered a loss by reason of the respondent’s conduct. The award for economic loss must be set aside.

Failure to Take Account of the Evidence

51 The appellant further contends that there was a failure to exercise jurisdiction in that the Tribunal failed to take account of the evidence. According to this submission, there was no exposition of the Tribunal’s reasoning process which is capable of explaining its findings in the face of contradictory and internally inconsistent evidence. It was submitted that, in some respects, the Tribunal’s findings were not supported by the evidence.

52 In detailed written submissions, the appellant analysed the evidence on a number of subjects, which allegedly affected the respondent’s credit, and/or the credit of various witnesses. These written submissions extended over eighty paragraphs, with references to page numbers of the transcript of the hearing below. They dealt with the evidence on the following topics :-

• the outcome of the respondent’s workers compensation claims
• the respondent’s motives for his complaint to the Anti Discrimination Board
• the employment history of Mr Marshall, who was called in support of the respondent’s complaint
• the respondent’s relationship with other drivers at the plant
• the events following a meeting on 17 March 1995
• the extent of “down time” at the plant
• the respondent’s relationship with management

53 After reviewing the evidence on these topics, the appellant contended at para 161 of the written submissions that “one conclusion reasonably open to the Tribunal was that there were inconsistencies on both sides and that Mr Cvetkovski has consistently exaggerated his evidence to bolster his case. To fail to arrive at that conclusion is to prefer some of Mr Cvetkovski’s evidence over other evidence. The failure to set out the process whereby this was undertaken and his actual evidence which was preferred is an error of law.” It is pertinent to observe that it was also open to the Tribunal to find that there were inconsistencies on both sides, but that nonetheless, it was satisfied upon the whole of the evidence that the respondent had been subjected to racial slurs in the workplace. That was, in effect, what the Tribunal decided at para 62 of its decision. The process by which the Tribunal arrived at this conclusion is apparent from the preceding paras, specifically paras 32 to 48 inclusive.

54 At para 32 the Tribunal observes that “there is considerable divergence between the evidence of the complainant as to the nature and extent of the verbal racial abuse and the evidence of the supervisor, his co-drivers and the managers in their versions of the nature and extent of verbal abuse which took place at the plant. It is necessary in these circumstances for the Tribunal to make a careful analysis of the evidence of these witnesses and for the Tribunal to make a determination of the extent to which the evidence of the witnesses can be accepted.” In the following paragraph, the Tribunal states its “overwhelming conclusion” and proceeds to articulate the basis for that conclusion in paras 34 to 48 inclusive, by way of a detailed review of the evidence which the Tribunal had accepted. In the course of that review, the Tribunal explains on a number of occasions why it preferred the evidence on behalf of the complainant over contradictory evidence ; see para 35 re the evidence of Mr Marshall, para 40 re the alleged absence of complaints by the complainant between November 1994 and March 1995, para 47 re the evidence of Mr Marshall and para 48 re the alleged racial abuse directed at the complainant by his co-drivers. Moreover, at paras 49 to 61 inclusive, the Tribunal reviews the evidence of each of the appellant company’s witnesses on the subject of the terms of the abuse directed at the complainant, in order to illustrate the basis of the Tribunal’s finding that “the evidence of a number of these witnesses contained admissions of the use by them of epithets of the nature complained about by the complainant.” (para 48)

55 Despite the fact that a consideration of the appellant’s submissions has necessitated an extensive review of the evidence, more consistent with a hearing on the merits, the Panel has undertaken that task in order to satisfy itself that the Tribunal did not fall into error. We are not persuaded that all of the inconsistencies identified by the appellant are necessarily to be viewed as such, nor that the inconsistencies which did emerge from the evidence of the complainant/respondent were of such a critical nature that the Tribunal was under an obligation to refer to them, much less justify its decision in the light of these inconsistencies. It is implicit in the substantiation of the complaint that the Tribunal rejected any suggestion that the complainant/respondent had fabricated the complaint to extort money from the appellant company. It is a regular feature of proceedings in the Tribunal that a complainant has claimed in the workers compensation jurisdiction ; that fact of itself, and the fact that those proceedings may have been discontinued, does not ordinarily justify an adverse finding as to the complainant’s credit.

56 It appears to the Panel that the remaining inconsistencies relied upon by the appellant are either of a minor nature or not established by the evidence when taken as a whole. Against this background, the Tribunal was not required to detail its chain of reasoning in respect of every topic traversed by the evidence, nor deal with every matter of fact raised in the hearing below ; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSLWR 247 ; Kiama Constructions Pty Ltd v Davey (1986) 40 NSWLR 639. The Panel is satisfied that the Tribunal dealt with the evidence which was critical to the issues in the case and that the basis of critical findings are apparent from the Tribunal’s decision ; see also Maynard v Dabinett [1999] NSWCA 296 ; Hills Grammar School v Human Rights & Equal Opportunity Commission [2000] FCA 658.

57 There was one further feature of the Tribunal’s decision with which the appellant took issue. At paras 17 to 26 inclusive of its decision, the Tribunal deals with the structure and organisation of the appellant company. The “chain of command” was set out at para 22, including the respective positions of a Mr Noel Creighton, Mr Brian Cleary and Mr Bill Lenard. None of these three persons gave evidence before the Tribunal, although an affidavit sworn by Mr Lenard was admitted “for the purpose of expanding on background information and to assist in understanding the conflicts in the evidence between other witnesses.” (para 23) The Tribunal commented on the absence of evidence from Mr Creighton and Mr Cleary in the following terms :-

“The lack of any material from Mr Creighton …. gives rise to an inference that being in a position of managerial responsibility for the plant, his evidence could have supported the contentions of the complainant that he had complained to Mr Creighton about the conduct he alleges he was subjected to in the earlier periods of his employment.” (para 23)

“The absence of evidence from Mr Brian Cleary, who Mr Lenard in his Affidavit describes as visiting the plant approximately 3 or 4 times a day, is also remarkable. (The Tribunal then refers to the contents of the Affidavit, which stated that between September 1992 and September 1996, Mr Cleary’s “second office” at the plant afforded him a full view of the plant yard and that he frequently asked Mr Lenard during that time why the complainant was not working.) In these circumstances it is likely that Mr Cleary would have been in a position to observe the conduct of the nature about which the complainant complains or Mr Cleary would have been in a position to refute the complainant's allegations of that conduct. The absence of evidence from Mr Cleary .….. leaves open an inference that he was not in a position to refute these allegations. (paras 24 and 25)…. [T]he absence of such evidence (from Mr Creighton and Mr Cleary) is not supportive of the submissions of the respondent that the evidence of its employees should be preferred to the evidence of the complainant.” (para 26)

58 The appellant relies upon the well-established principle that the absence of a witness on behalf of a party who may be expected to call that witness, does not justify an inference other than that the witness could not assist that party’s case; Jones v Dunkel (1959) 101 CLR 298. The submission is that the Tribunal’s approach, set out above, contravenes this principle. Certainly, the inference at para 23 was in error. The inference at para 25 may be seen as objectionable, although it appears to the Panel that, in view of the evidence from Mr Lenard, the Tribunal’s observation was tantamount to a statement that the witness could not assist the respondent’s case. As for the statement at para 26, it amounts to a finding adverse to the respondent company and was not justified.

59 However, the Panel has had regard to the whole of the Tribunal’s decision in concluding that these errors were not sufficient to vitiate the decision. In the Panel’s view, it cannot be said that, on a reading of the decision, the Tribunal would not have made the findings it made, absent the inferences. Those findings, in respect of disputed issues of fact, were made on the basis of evidence which was before the Tribunal and which was carefully considered. As has already been noted above, the Tribunal’s conclusion in respect of the crucial issue was “overwhelming”.

Costs

60 In paragraph 3 of its reasons the Tribunal took the view that an application for costs in an inquiry under the Anti-Discrimination Act (the ADA) should “be determined in accordance with the provisions of section 114(1) and (2)” of that Act, rather than in accordance with the provisions of section 88 of the Administrative Decisions Tribunal Act.

61 This view was not the subject of appeal, and is clearly correct, the provisions of section 88 of the Administrative Decisions Tribunal Act being expressed to be “(s)ubject to . . . any other Act”.

62 The reasons for appealing are stated as:-

“The Tribunal erred in its decision to award a portion of the Complainant’s costs to be paid by the Respondent and in so doing erred in law by a misapplication of the test in s 114 of the Anti-Discrimination Act”.

63 It is not accurate to say that section 114 of the ADA prescribes a test to be applied. The appellant’s written submissions properly characterise the section as creating a presumption in subsection (1) and a discretion in subsection (2).

The discretionary costs rule

64 Section 114(1) establishes a rule in relation to costs of an inquiry under the ADA: “each party to an inquiry shall pay his or her own costs”. That rule is subject to section 114(2) in which the Tribunal is empowered to make “such order as to costs . . . as it thinks fit” where it “is of the opinion in a particular case that there are circumstances that justify it doing so”.

65 The Tribunal has a discretion to depart from the rule that each party shall pay his or her own costs, and the issue raised by the appellant is whether the Tribunal erred in law in the exercise of that discretion.

66 The discretion and authorities relating to it were discussed in Gallagher v NSW Police Service [1998] NSWEOT. Two points made there are worth repeating for the purposes of this appeal: the discretion must be exercised judicially, and no authority or rule can determine whether in any particular case an order should be made.

67 In paragraph 6 of its reasons in the case, the Tribunal said correctly that section 114 (1) “requires that in the normal course, an award of costs would not be made”. In paragraph 9 the Tribunal said that “there has to be something over and beyond a normal course of circumstances to justify the making of an award of costs”. This should be understood to mean nothing other than that the presumption in section 114 (1) “must yield” when in a particular case there are circumstances justifying the making of a costs order (Penfold v Penfold (1980) 144 CLR 311 at page 315). To similar effect, there may be in particular case “circumstances which justify the departure form the general rule” (Australian Postal Commissioner v Dao and Anor (No 2) (1986) 6 NSWLR 497 at 505).

The circumstances of the case

68 It is difficult to say what circumstances, in the opinion of the Tribunal, justified it making an order as to costs in this particular case. The appellant’s submissions identify three. They are that:

(a) the appellant peremptorily rejected the offer of settlement of the respondent which expired on 24 June 1998

(b) the compensation awarded to the respondent by the Tribunal far exceeds the amount in the offer of settlement, and

(c) the appellant “must bear some responsibility . . . for the approach it took to extend the inquiry into six days”.

69 In Penfold it was said that a provision such as section 114 (2) “does not . . . require the judge to specify the circumstances which justify the making of an order” (at page 315). Similarly in House it was said that “(i)t may not appear how the primary judge has reached the result embodied in the order”. The Court in House went on to say “but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion” (at page 505).

70 The Tribunal’s reasons in this case do not clearly identify the circumstances, and they must be inferred from the Tribunal ’s reasons.

History of settlement

71 One circumstance relied on by the Tribunal appears from the Tribunal’s reasons at paragraph 11: “the distinguishing feature of this cost application . . . was the history of attempts at settlement”. The Appeal Panel notes that it was the inquiry into the complaints, not the costs application, of which the history of attempts at settlement were relevantly the “distinguishing feature”.

72 Relying on the affidavit of Mr Cvetkovski’s solicitor, Mr Koumarelas, filed in support of the application for costs, the Tribunal’s reasons recounted the history of attempts to settle the dispute between the parties. That affidavit was available to the Appeal Panel.

73 In summary, the history is that:

• by letter dated 2 June 1998 the appellant made an offer of settlement to the complainant which was expressed to be open until 6 June 2000
• in a letter dated 17 June 1998 responding to the letter of 2 June, the complainant did not address that offer directly, but impliedly rejected it by making an offer in different terms which was expressed to be open until 24 June 1998
• by facsimile letter dated 23 June 1998 the appellant rejected that offer.

74 In paragraph 12 the Tribunal, having given an account of this history as the “distinguishing feature” of the inquiry, said :-

“In the event, this Tribunal found for the complainant and awarded total compensation far in excess of the amount of the complainant’s counter offer to the respondent. It is the view of the Tribunal that in these circumstances the respondent must bear some responsibility in costs for the approach it took to extend the inquiry into six hearing days and the associated time and cost involved in the complaint. In this respect, the Tribunal refers to the approach it adopted in an unreported matter of Kennedy v Maher & Holmes Advertising Pty Limited a decision given on 4 June 1998.”

75 In the Kennedy decision, the then Equal Opportunity Tribunal made an order as to costs, saying “(t)he justification primarily is based on the Tribunal’s view that the letter of 16 October 1996 was a proper attempt by the complainant to have the disputes disposed of at that time without incurring additional costs”.

76 From paragraph 11, the first sentence in paragraph 12, and the reference to Kennedy, it can be reasonably inferred from the Tribunal’s reasons in this case that the Tribunal viewed as a circumstance justifying a cost order, the fact that Cleary Bros rejected an offer from Mr Cvetkovski which was less than the amount Cleary Bros was ordered to pay at the end of the inquiry.

Length of the hearing

77 In the second sentence of paragraph 12 the Tribunal says clearly that “the respondent must bear some responsibility in costs for the approach it took to extend the inquiry into six hearing days”.

78 Correspondence annexed to Mr Koumarelas’s affidavit indicates that two months before the inquiry commenced Cleary Bros, in correspondence with the complainant, had estimated the likely hearing time at 5 days. The complainant’s letter in reply did not address this estimate directly, but referred to “what is already a lengthy hearing”. Five days were in fact set aside for the inquiry, a point agreed on at the appeal hearing by legal representatives for the parties. The inquiry took six days.

79 A six day hearing in light of a five day estimate is neither out of the ordinary nor unreasonable. No issue was taken during the course of the hearing as to its conduct or length.

80 There was no evidence of any approach Cleary Bros took to extend, or with the effect of extending, the inquiry from five days to six. The Tribunal in its reasons says, however, that Cleary Bros’s responsibility for the extended hearing arose “(i)n these circumstances”. That phrase must refer to the previous sentence which identified the fact that Mr Cvetkovski was “awarded total compensation far in excess of the amount of Mr Cvetkovski’s counter offer to Cleary Bros in the history of settlement negotiations”.

81 It is difficult to see a logical connection generally between settlement correspondence and the fact that an inquiry runs longer than anticipated. There is no apparent logical connection between the two phenomena in this case. Whatever the Tribunal meant when it referred to Cleary Bros’s responsibility for the extended length of the hearing, the Panel is unable to identify what that conduct was.

82 The Panel cannot reasonably infer that the Tribunal viewed as a circumstance justifying a cost order, the fact that Cleary Bros was in some way responsible for the extension of the time of the inquiry from the estimated five days to six.

‘Peremptory’ nature of rejection

83 In giving the history of settlement negotiations, the Tribunal said of Mr Cvetkovski’s offer of 17 June that it was “peremptorily dismissed by the respondent’s solicitors without any further counter offer”. The full terms of the appellant’s facsimile letter dated 23 June were: “We refer to your letter of 17 June 1998 and have been instructed to reject your client’s counter offer”.

84 It may be that its view that the rejection was ‘peremptory’ weighed on the mind of the Tribunal when it considered Cleary Bros’s rejection of the settlement offer, as it appears to have done, as a circumstance justifying an order as to costs.

85 The Tribunal does not however state that its view that the rejection was ‘peremptory’ was a separate circumstance justifying an order as to costs, and there is insufficient material from which the Appeal Panel can draw a reasonable inference that it did so.

Number of ‘circumstances’

86 The preceding analysis has identified a single circumstance on the basis of which the Tribunal formed the view that a costs order was justified. It has been said in a number of tribunal decisions under the ADA that no single circumstance can justify the making of a costs order, but that necessarily there will be a combination of circumstances.

87 Whether this is so does not need to be decided in this appeal The fact that the Panel can only identify one circumstance on which the Tribunal appears to have based its discretion is not the reason for the Panel’s view that the discretion has miscarried. For the reasons given below, that circumstance is not one that can in any event reasonably support the Tribunal’s exercise of its discretion.

Exercise of the discretion

88 The issue for the Panel is whether the Tribunal exercised its discretion under section 114 (2) “judiciously, according to rules of reason and justice”, not acting on a wrong principle, allowing extraneous or irrelevant matters to guide or affect it, not mistaking the facts, and not taking account of some material consideration (House v R (1936) 55 CLR 499 at 503, 505 per Dixon, Evatt and McTiernan JJ).

89 As best as can be assessed from its reasons, the Tribunal in this matter exercised its discretion on the basis of a view it took of the settlement negotiations that preceded the hearing. The Tribunal appears to have viewed those negotiations as, to use the test the Tribunal set itself, “something over and beyond a normal course of circumstances”.

90 The evidence shows nothing more than a usual exchange between parties in pre-trial negotiations. This circumstance is not in any way out of the ordinary. Indeed, it is what one might expect would happen in many if not most matters which proceed to a hearing. To found a costs order on that circumstance comes very close to the usual adversarial ‘cost follow the event’ rule, contrary to the explicit presumption in this jurisdiction, in s114(1) of the ADA.
91 The “history of the attempts at settlement” in this case is unremarkable. The result arrived at by the Tribunal in the exercise of its discretion is unreasonable. It is not supported by the evidence.

92 Accordingly the Tribunal’s discretion was not exercised judicially. The exercise of the discretion miscarried.

Order

93 Section 114 of the Administrative Decisions Tribunal Act empowers the Panel to make orders on determining an appeal on questions of law. The Tribunal’s order should be set aside. In the view of the Panel there are no circumstances in the particular case that justify the making of an order as to costs other than as required by section 114 (1). Accordingly an order should be substituted to that effect.

1. The order of the Tribunal of 31 August 1999 pursuant to section 114 (2) of the Anti-Discrimination Act is set aside.

2. The following order is made in substitution:

Each party to the inquiry shall pay their own costs of the inquiry.