Fisk v Kenji Auto Parts Ltd T/As SSS Auto Parts (WA)
[2007] WASCA 139
•4 JULY 2007
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT
CITATION: FISK -v- KENJI AUTO PARTS LTD T/AS SSS AUTO PARTS (WA) [2007] WASCA 139
CORAM: WHEELER J (Deputy Presiding Judge)
PULLIN J
LE MIERE J
HEARD: 8 MAY 2007
DELIVERED : 4 JULY 2007
FILE NO/S: IAC 3 of 2007
BETWEEN: ANTHONY RAYMOND FISK
Appellant
AND
KENJI AUTO PARTS LTD T/AS SSS AUTO PARTS (WA)
Respondent
ON APPEAL FROM:
Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Coram :RITTER AP
SMITH C
SCOTT C
Citation :[2007] WAIRC 00085
File No :FBA 26 of 2006
Catchwords:
Industrial law - Failure to comply with award - Cost of proceedings before Industrial Magistrate's Court - Costs recoverable if proceedings frivolous and vexatious - Meaning of "the proceedings" in Industrial Relations Act 1979 (WA)
Legislation:
Industrial Relations Act 1979 (WA), s 83, s 83A, s 83C, s 90
Interpretation Act 1984 (WA), s 18
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant: Mr K M Pettit SC & Mr M D Cox
Respondent: Mr D C Heldsinger
Solicitors:
Appellant: Employment Law Centre (WA)
Respondent: Jackson McDonald
Case(s) referred to in judgment(s):
Blake v Norris (1990) 20 NSWLR 300
Construction, Forestry, Mining and Energy Union of Workers v Carl and Sandra Perrott T/as C and S Perrott (2002) 83 WAIG 17
Grout v Gunnedah Shire Council (No 3) (1995) 129 ALR 372
Re Struthers, Liquidator of Project Management, Architecture and Construction, Interior (PACI) Pty Ltd (No 3) [2005] NSWSC 1113; 64 NSWLR 392
WHEELER J (Deputy Presiding Judge): I agree with Le Miere J.
PULLIN J: I agree with Le Miere J.
LE MIERE J: The appellant appeals under s 90 of the Industrial Relations Act 1979 (WA) ("the Act") from the decision of the Full Bench of the Western Australian Industrial Relations Commission whereby the Full Bench allowed an appeal by the respondent and set aside the order of an Industrial Magistrate that the respondent pay to the appellant costs for the services of a legal practitioner and ordered instead that the appellant's application for an order for costs from the Industrial Magistrate's Court be dismissed.
Claim in Industrial Magistrate's Court
The appellant had been employed by the respondent as a storeman at the respondent's auto parts business in Bassendean. His employment was governed by the Shop and Warehouse (Wholesale and Retail Establishments) State Award 1977 ("the Award"). The appellant lodged a single originating claim in the Industrial Magistrate's Court in which he ticked a box under "Grounds" stating "failed to comply with an award, agreement, instrument or order …". The appellant claimed monies due and costs. The appellant annexed to the originating claim form a page of particulars of four categories of breaches of the Award for:
1.failure to pay award minimum wages after a general order for award wage increases (five breaches over five weeks);
2.failure to pay him in accord with his classification as a storeman operator grade II: cl 28(1) of the Award (41 breaches over 41 weeks);
3.failure to pay him an "In Charge allowance": cl 28(2) of the Award (41 breaches over 41 weeks); and
4.failure to pay overtime: cl 13(4) of the Award (41 breaches over 41 weeks).
The Industrial Magistrate found that each of the appellant's claims were made out and found that the respondent had no basis for the defence of any of the appellant's claims and consequently that the respondent had frivolously defended the claims. His Honour made the following orders:
"1.There is a finding that the respondent has committed 128 breaches of the Award.
2.The penalty is imposed with respect to each breach in the sum of $10.00 amounting to $1,280.00 which shall be payable to the [appellant].
3.The Respondent shall pay to the [appellant] the sum of $3,295.11 being the value of the underpayments in consequence of the breaches.
4.There is a finding that the Respondent frivolously defended the claim.
5.The Respondent is to pay the [appellant's] costs for the services of a legal practitioner fixed at $6,000.00.
6.The Respondent is to pay to the claimant the sum of $345.79 being his disbursements incurred in bringing this claim."
Appeal to Full Bench
The respondent appealed to the Full Bench against the decision of the Industrial Magistrate that the respondent had frivolously defended the claim and that the respondent pay the appellant's costs for the services of a legal practitioner fixed at $6,000.00. The Full Bench allowed the appeal on one ground. That ground related to the Industrial Magistrate's finding that the respondent had defended the claim relating to the in charge allowance frivolously in that there was no basis for defending the claim. The Full Bench found that the Industrial Magistrate erred in finding this part of the appellant's claim was defended frivolously. The Full Bench held that the resolution of the claim depended upon an assessment of the totality of the evidence of Mr Emery, the warehouse supervisor, of the appellant and of the documentary evidence. The Full Bench found that the defence, based on at least some parts of Mr Emery's evidence was not manifestly groundless or doomed to fail.
Having found that the Industrial Magistrate erred in finding the defence of the claim for non‑payment of the in charge allowance was frivolous, the Full Bench said that the parties had not made clear submissions on what orders should be made if the Full Bench reached such a conclusion. The Full Bench said that there was an issue as to whether the Industrial Magistrate was empowered to make a legal costs order if he found that part of the defence to the proceedings was not frivolous. The Acting President, with whom the other members of the Full Bench agreed, said that s 83C(2) of the Act refers to "the proceedings" being frivolously defended, not a part of the proceedings and it may be therefore that unless the present proceedings as a whole were frivolously defended, the Industrial Magistrate was not empowered to make a legal costs order. On the other hand, the Full Bench observed that in Construction, Forestry, Mining and Energy Union of Workers v Carl and Sandra Perrott T/as C and S Perrott (2002) 83 WAIG 17, Sharkey P, in considering what was then s 83(3) of the Act (the predecessor to s 83C) said that it would be wrong to deny costs on the basis that one out of 53 claims had not been successful and if the conclusion reached in Perrott was to be followed then the Industrial Magistrate's Court could have ordered costs for the components of the claim which were frivolously defended. The Full Bench directed the parties to file and serve written submissions on the orders to be made by the Full Bench.
In written submissions the respondent submitted that when a part of the issues in contention is determined to have not been frivolously defended, the Industrial Magistrate is not empowered to make a legal costs order pursuant to s 83C(2).
In his written submission the appellant submitted that the Industrial Magistrate is empowered to order costs against the respondent notwithstanding that part of the appellant's defence in the proceedings is not frivolous. The appellant submitted that in his case there were four proceedings:
"(a)a claim or proceeding for award underpayment relating to a period when the employer did not pay in accordance with new award minimum rates;
(b)a claim or proceeding for overtime payments;
(c)a proceeding for 'Grade II' rates of pay, or, alternatively, 'Higher Duties' allowances; and
(d)a proceeding for 'in‑charge allowance'."
The appellant submitted that where assessing an application for costs under s 83C of the Act, the Magistrate must have regard to whether the proceedings were frivolous or vexatious, that is each component proceeding or a matter making up the case. The appellant submitted that the court has a discretion to apportion costs in a partly frivolous claim and might do so by considering the proportion of the overall amount of compensation awarded or the proportion of the case that the non‑frivolous matter occupied.
The Full Bench delivered supplementary reasons for decision on 8 February 2007. The Full Bench stated that the issues remaining for determination were the construction of s 83C(2) of the Act and in consequence thereof the orders which ought to be made by the Full Bench. The Acting President, with whom the other members of the Full Bench agreed, said that where the claim is about a single breach of an award, it will be a simpler exercise to determine whether the claim has been frivolously instituted or defended, than a claim where there are alleged multiple breaches of different provisions of an award. The present case fell into the latter category which raised the question as to what are "the proceedings" referred to in s 83C. The Acting President found that "the proceedings" must still refer to the claim as made. The question must still be whether that claim, involving all of its components, was frivolously or vexatiously instituted or defended. The Acting President said that in this case there were four components to the application or claim before the court. It was however, all of these components making up the claim as a whole which constituted "the proceedings" for the purposes of s 83C. The Acting President stated that the judgment which the Industrial Magistrate's Court should have made was whether the proceedings, taken as a whole, were frivolously defended. The Acting President found that he was not able to form the opinion that the proceedings, as a whole, were frivolously defended. Accordingly, the Full Bench set aside the order of the Industrial Magistrate and ordered that the appellant's application for an order for costs in the Industrial Magistrate's Court be dismissed.
Ground 1
Ground 1 of the appeal to this Court is:
"In its interpretation of s 83C(2) of the Industrial Relations Act 1979, the learned Full Bench erred in law by:
(a)holding that s 83C(2) provided that the Industrial Magistrate's Court could not award the Appellant costs for a legal practitioner unless the hearing, taken as a whole, was frivolously defended; and
(b)by failing to hold instead that s 83C(2) empowered the Magistrate to award the appellant such costs:
(i)in each instance of the Respondent's failure to comply with the relevant Award; alternatively
(ii)in each category of such instances,
which the Respondent frivolously defended."
Section 90(1) of the Act provides that an appeal lies to this Court only in the circumstances set out in par (a), par (b) or par (c) of the section. The appellant submitted that this ground falls within s 90(1)(b), that is the decision of the Full Bench was erroneous in law in that there has been an error in the construction or interpretation of s 83C(2) of the Act in the course of making the decision appealed against. The error alleged by ground 1 is that the Full Bench incorrectly held that s 83C(2) of the Act provides that an industrial magistrate's court may only award an applicant costs for the services of a legal practitioner if the proceedings in their entirety have been frivolously or vexatiously defended. The appellant submits that on its proper construction or interpretation s 83C(2) empowers an industrial magistrate's court to award an applicant costs for the services of any legal practitioner if any part of the proceedings have been frivolously or vexatiously defended, where each part of the proceedings consists of each instance of the defendant's failure to comply with a relevant industrial instrument or each category of such instances. In this case the appellant submitted that each breach of the Award, or each of the four categories of the appellant's claims, constituted a part of the proceedings and if any instance of the respondent's breach of award, or category of such instances, was frivolously defended then the Industrial Magistrate's Court was empowered to award the appellant costs for a legal practitioner in respect of that instance.
Construction of s 83C(2)
Section 83C(2) provides that in proceedings under s 83, that is proceedings for the enforcement of certain industrial instruments, "costs shall not be given to any party to the proceedings for the services of any legal practitioner or agent of that party unless, in the opinion of the Industrial Magistrate's Court, the proceedings have been frivolously or vexatiously instituted or defended, as the case requires, by the other party".
In Blake v Norris (1990) 20 NSWLR 300 at 306, Smart J said:
"In Stroud's Judicial Dictionary, 5th ed, vol 4 at 2029‑2035, some fifty‑five instances are given of the use of the words 'proceeding' or 'proceedings' in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to 'an action' whereas in others it may mean a step in an action. Sometimes it may include a counter claim. The Oxford Companion to Law (1980) by Professor Walker states (at 1002 – 1003) that 'proceedings' is sometimes used as including, or meaning, an action or prosecution and sometimes as meaning a step in an action. The word 'proceeding' is capable of such a variety of meaning that dictionary definitions as to its ordinary or natural meaning are not of much use. They tend to highlight the number of meanings which the word can bear.
Any assistance as to its meaning has to be derived from the statutory context and the objects of the legislation in question."
In Grout v Gunnedah Shire Council (No 3) (1995) 129 ALR 372 at 383 Moore J said that one of the meanings of the word "proceeding" which was suggested as its primary technical meaning was the invocation of the jurisdiction of a court by a process other than a writ, it being described as an "action" if jurisdictions were invoked by writ.
In Re Struthers, Liquidator of Project Management, Architecture and Construction, Interior (PACI) Pty Ltd (No 3) [2005] NSWSC 1113; 64 NSWLR 392, Brereton J said at [17]:
"While it might be said that the word 'proceeding' is capable of variable and varying meanings, one starts from the position that, while the distinction between a proceeding and an action has not survived, generally speaking, a proceeding means the invocation of jurisdiction by an initiating process, rather than an interlocutory step in a proceeding so instituted, although sometimes it is capable of and does bear the latter meaning. This is consistent with at least a slight inclination in favour of viewing "proceeding" as relating to a litigation as a whole, and not to individual interlocutory steps in that litigation."
The sixth edition of Stroud's Judicial Dictionary contains numerous instances of the use of the words "proceeding" or "proceedings" in legislation, rules of court or documents having legal significance. The meaning depends on the context in which the word is used. In some cases it is equivalent to an action or an entire litigation whereas in others it may mean a step in that litigation. I have not found any instance where each cause of action, infringement of the rights of another person or contravention of a law alleged in the course of an action or litigation has been found to be a separate proceeding.
Of course, the word "proceedings" must take its meaning from the context in which it appears. Section 83C is in Pt III of the Act entitled "Enforcement of Act, awards, industrial agreements and orders". Section 83 provides that where a person contravenes or fails to comply with a provision of a specified industrial instrument then a number of specified persons may apply to an industrial magistrate's court for the enforcement of the provision. Section 83A(1) provides that where in any proceedings brought under s 83(1) against an employer it appears that an employee has not been paid the amount to which the employee was entitled to be paid under an industrial instrument the Industrial Magistrate's Court shall, subject to specified limitations, order the employer to pay to the employee the amount by which the employee has been underpaid. Paragraph 83A(2)(a) provides that an "underpayment" order may only be made in respect of any amount relating to a person not being more than six years prior to the commencement of the "proceedings". Paragraph 83A(2)(b) alternatively provides that an underpayment order may be made if the employer has contravened s 102(1)(a) or (b) of the Act by reason of having failed, amongst other things, to produce or exhibit a record relevant to the "proceedings" or having failed to properly answer a question relevant to the "proceedings" in respect of any amount relating to a period not being more than six years prior to that failure. That is some, albeit slight, indication that in Pt III "proceedings" refers to the entire litigation before the Industrial Magistrate not each separate breach of an industrial instrument or claim for underpayment. That is because a claim for an underpayment is not a proceeding separate from the proceedings in which a person claims an employer has breached a provision of an industrial instrument.
In construing s 83C(2) a construction that would promote the purpose or object underlying the statutory provision is to be preferred to a construction that would not promote that purpose or object: Interpretation Act 1984, s 18.
Section 83C provides that the Industrial Magistrate may make an order for costs but costs shall not be given for the services of a legal practitioner or agent unless the proceedings have been frivolously or vexatiously instituted or defended. There are a number of policy objectives which might underlie that costs rule. First, the rule ensures that the court is accessible, particularly to the poor or relatively poor, who might be deterred from bringing a valid prosecution, or properly defending a prosecution, by the possibility of having to pay the fees of their opponent's lawyer, particularly where the legal fees are likely to exceed the amount in issue. Secondly, the rule encourages proceedings to be determined in an informal and expeditious manner by deterring parties from instructing lawyers to advance technical and lengthy prosecutions or defences. Thirdly, the rule discourages unmeritorious applications or defences without punishing a party for bringing, or defending, a prosecution in good faith. The policy considerations offer little guidance as to which is the preferable construction of s 83C(2) of the Act.
I conclude that "the proceedings" in s 83C(2) of the Act refers to the entire litigation rather than to each claim that a person has contravened an industrial instrument or that an employee has been paid less than the employee was entitled to be paid under the instrument or that an unfair dismissal order under s 23A has not been complied with.
It follows that ground 1 of the appeal is not made out.
Approach of Full Bench
In the course of his oral submissions, counsel for the appellant developed an argument that arguably went beyond the grounds of appeal. The appellant argued that the Full Bench erred in construing or interpreting s 83C(2) of the Act in that the Full Bench erroneously held that the proceedings cannot have been frivolously or vexatiously defended if any part of the defence was not frivolous or vexatious. If the Full Bench did construe or interpret s 83C(2) in that way then that would have been an error. Section 83C(3) requires the Industrial Magistrate to determine whether the proceedings taken as a whole, that is the entire litigation, were frivolously or vexatiously defended. That requires an evaluative judgment. Whether the Full Bench fell into the error asserted by the appellant requires a close analysis of the reasons for decision of the Acting President.
In his supplementary reasons the Acting President referred to his observations in his primary reasons that there was an issue as to whether the Industrial Magistrate was empowered to make a legal costs order if he found that part of the defence to the proceedings was not frivolous, as the Full Bench found that he ought to have found. The Acting President had said in his primary reasons that s 83C(2) refers to "the proceedings" being frivolously defended, not a part of the proceedings and it may be therefore that unless the present proceedings as a whole were frivolously defended, the Industrial Magistrate was not empowered to make a legal costs order. The Acting President then referred to the parties' written submissions. The Acting President referred to the appellant's submission that in s 83C(2) of the Act the term "the proceedings" means the entirety of the proceedings and not part of them. As I have said, the appellant had submitted that in his case before the Industrial Magistrate's Court there were four proceedings: a claim or proceeding for award under payment relating to a period when the employer did not pay in accordance with the minimum award rates; a claim or proceeding for overtime payments; a proceeding for Grade II rates of payment or alternatively "higher duties" allowances; and a proceeding for "in charge" allowance. The appellant submitted that in s 83C "the proceedings" referred to each component proceeding or matter making up the case.
In his supplementary reasons for decision the Acting President discussed whether "proceedings" in s 83C(2) refers to the whole of the proceedings, that is the entire litigation, or each component part of the proceedings, that is the proceedings in respect of each contravention of the award or in respect of each category of contraventions. At [81] the Acting President opined that the reference to "the proceedings" in s 83C(2) is the application contemplated by s 83(1) which in turn is called the "claim" in the Industrial Magistrate's Court Regulations. The Acting President then stated at [82]:
"Section 83C(2) requires the Industrial Magistrate's Court to form an opinion as to whether 'the proceedings' were frivolously defended. This involves an evaluative judgment in accordance with the principles which were discussed in the primary reasons of the Full Bench."
At [85] the Acting President said:
"In the present case there were, as submitted by the parties, four components to the application/claim before the court. It was however all of these components making up the claim as a whole which in my opinion constituted 'the proceedings' for the purposes of s 83C. It was in my opinion an evaluation of the totality of all of the claims, making up the proceedings, which was required by the Industrial Magistrate."
The Acting President referred to the reasons for decision of the Industrial Magistrate and found that there was nothing wrong with the Industrial Magistrate's process of reasoning but that the Full Bench had found the Magistrate was in error in determining that one of the components of the claim was frivolously defended. The Acting President then said at [87]:
"I do not accept the [respondent's] submission that this necessarily means the proceedings have not been frivolously defended."
The Acting President went on to discuss the orders that should be made by the Full Bench. At [95] the Acting President said:
"As stated, the judgment which the Industrial Magistrate's Court should have made was whether the proceedings, taken as a whole, were frivolously defended. The Industrial Magistrate's finding, that three of the four components of the claim were frivolously defended, remains. The fourth component of that claim was the 'in charge' allowance. According to the assessment of counsel for the respondent who appeared both at first instance and on appeal, the 'in charge' issue occupied less than 30% of the hearing of the proceedings. That component also made up 23.5% of the amount of compensation ordered."
The Acting President referred to the appellant's submission that by the time of the hearing before the Industrial Magistrate there were only two matters in contention so that if costs were apportioned, this should be on the basis of one half each. The Acting President stated however that this approach does not involve the type of evaluative judgment which the Industrial Magistrate was obliged to make. The Acting President then reached the following conclusion at [97]:
"From my consideration of the documents filed prior to the hearing of the claim by the Industrial Magistrate, the transcript of the hearing including the evidence and the opening and closing submissions of the advocates and the reasons for decision of the Industrial Magistrate, it is my assessment that the determination of the 'in charge' allowance claim, as part of the proceedings as a whole comprised about one third to one half of 'the proceedings'. In those circumstances I do not find myself able to form the opinion that 'the proceedings', as a whole, were frivolously defended. Accordingly, in my opinion, because of the terms of s 83C of the Act, the application for costs should have been refused by the Industrial Magistrate's Court."
The Acting President stated that he reached this conclusion with some misgiving. The Acting President said that the appellant could have made a separate application or claim for the enforcement of each of what became four components of the claim at first instance. If single applications or claims had been made by the appellant for each breach they could have been heard at the same time without necessarily being consolidated. If that had occurred the Industrial Magistrate could properly have made a finding that three of the four claims or proceedings had been frivolously defended and make a costs order in each of them. Therefore, the Acting President said, because the appellant had acted in the administratively sensible way of filing a single claim or proceeding, he was precluded from succeeding in obtaining a costs order. The Acting President also opined that the prospects of a costs order being made against a party is intended to prevent or lessen the prospect of a frivolous or vexatious defence or institution of proceedings and it might be argued that this purpose would be enhanced by allowing a costs order to be made in the appeal before the Full Bench.
I am not satisfied that the Acting President, with whom the other members of the Full Bench agreed, erred in the construction or interpretation of s 83C(2) of the Act. In particular, the Acting President did not find that because the respondent had been successful in defending one part of the proceedings then a finding that the proceedings had been frivolously or vexatiously defended was precluded. The Acting President expressly stated in [87] of his reasons that the finding of the Full Bench that one of the components of the claim was not frivolously defended does not necessarily mean that the proceedings had not been frivolously defended. The appellant has not demonstrated that the Full Bench erred in the construction of interpretation of s 83C(2) of the Act.
Ground 2
Ground 2 is:
"Alternatively to ground 1, if, which is denied in ground 1, the Full Bench was correct to hold that s 83C(2) does not authorise an order for such costs unless the hearing, taken as a whole, was frivolously defended, then the Full Bench erred in law by holding that the frivolous defence of about 68% of the Respondent's failures to comply with the Award, which occupied between 66% and 50% of the hearing at trial, did not constitute a frivolous defence of the hearing taken as a whole."
This ground, and the appellant's argument in support of it, is in substance an argument that the Full Bench was wrong to find that the proceedings taken as a whole were not frivolously defended by the respondent. Section 90(1) of the Act provides that an appeal lies to this Court only in the circumstances set out in paragraphs (a), (b) or (c) of the section. The appellant submitted that the appeal falls within s 90(1)(b), that is the decision of the Full Bench was erroneous in law in that there has been an error in the construction or interpretation of s 83C(2) of the Act in the course of making the decision appealed against.
The appellant has not demonstrated that the Full Bench made any error in the construction or interpretation of s 83C(2) of the Act. I might have reached a different decision from the Full Bench had I been called upon to determine whether, in all the circumstances, the proceedings had been frivolously defended. However, it was open to the Full Bench to find, as it did, that in its opinion the proceedings as a whole had not been frivolously defended. There is no basis for setting aside that decision.
Conclusion
The appeal must be dismissed.
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