Graham Foxcroft v the Ink Group Pty Ltd

[1994] IRCA 78

C A T C H W O R D S

PRACTICE AND PROCEDURE - Application for review of pre-trial directions made by a Judicial Registrar - Power of Court - Proper approach to challenge to interlocutory orders relating to practice and procedure - No error of law or logic or unfairness in direction - Application for review dismissed - Principles in relation  to costs of application - Costs order made.

Industrial Relations Act 1988, ss.170EC, 170ED, 170EE, 347 and 377.

GRAHAM FOXCROFT v THE INK GROUP PTY LTD

No. NI 447 of 1993

CORAM:                  WILCOX CJ
PLACE;  SYDNEY
DATE:  14 OCTOBER 1994

IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY )         NO. NI 447 of 1994

BETWEEN:GRAHAM FOXCROFT

Applicant

AND:THE INK GROUP PTY LTD

Respondent

CORAM:      WILCOX CJ
PLACE:        SYDNEY
DATE:          14 OCTOBER 1994

MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The application for review constituted by the notice of motion filed by the respondent on 28 September 1994 be dismissed.

2. The applicant for review, the respondent to the principal proceeding, pay the costs incurred by the applicant in the principal proceeding in connection with the application for review.

NOTE:           Settlement and entry of orders is dealt with in Order 37 of the Industrial Relations Court Rules.

IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA  )
NEW SOUTH WALES DISTRICT REGISTRY )         NO. NI 447 of 1994

BETWEEN:GRAHAM FOXCROFT

Applicant

AND:THE INK GROUP PTY LTD

Respondent

CORAM:      WILCOX CJ
PLACE:        SYDNEY
DATE:          5 OCTOBER 1994

REASONS FOR JUDGMENT

WILCOX CJ:  On 5 October 1994 I heard an application for review of directions made by a Judicial Registrar of the Court, Mr Walker, in connection with the trial of an unlawful termination claim.  I dismissed the application for review and ordered that the applicant for review, the respondent in the principal proceeding, pay the costs of the application incurred by its opponent.  I indicated that I would hand down written reasons as soon as practicable.  These are my reasons.

The principal proceeding was commenced on 24 June 1994 when the applicant, Graham Foxcroft, filed an Application under s.170EA of the Industrial Relations Act 1988. He named as respondent his former employer, The Ink Group Pty Limited. Mr Foxcroft sought a declaration that the termination of his employment contravened Division 3 of Part VIA of the Act, and monetary compensation. At that stage he did not seek reinstatement.

On 26 July 1994 the respondent's solicitor, Ms Anna Obrart, filed a Notice of Appearance.  This was followed by an affidavit, sworn 11 August 1994, in which a director of the respondent set out the information required by Order 75 rule 4 of the Court's Rules.

The matter was listed for directions on 28 July 1994. On that day, Registrar Hagan ordered, pursuant to s.170EC of the Act, that it be referred to the Australian Industrial Relations Commission for conciliation. The Commission fixed 26 August for a conciliation conference. However, this appointment was cancelled because Ms Obrart wrote to the Commission stating that her client would be overseas at that time. Apparently, there are two directors of the respondent company and neither was available on 26 August. Subsequently, Ms Obrart informed the Commission that neither of the directors would be able to attend a conciliation conference for some months. So the Commission officer handling the matter issued a certificate under s.170ED(2) of the Act that the matter could not be resolved by conciliation. This certificate was issued on 29 August, and the Court notified of the position on 1 September.

On 12 September 1994 the matter was listed before Judicial Registrar Walker for pre-trial directions.  The solicitor for Mr Foxcroft applied for leave to amend the Application so as to insert a proposed order for reinstatement.  This application was granted.  Ms Obrart applied for the matter to be returned to the Commission.  She said that the amendment changed the nature of the case, so the Commission should have a fresh chance to conciliate it.  I do not know what information, if any, she gave Mr Walker regarding the availability of the directors of her client.

Mr Walker refused Ms Obrart's application.  He thought that, in all the circumstances, the preferable course was to fix an early hearing date.  The solicitors for the parties then agreed upon a timetable for preparatory steps.  They wrote this out and handed it to Mr Walker.  He made directions accordingly.  The timetable fixed a hearing date, 19 October 1994.

Sixteen days later, on 28 September 1994, Ms Obrart filed a notice of motion seeking orders that the directions made on 12 September be set aside and that the matter be referred to the Commission pursuant to s.170EC of the Act. It was this motion that came before me on 5 October.

Section 377 of the Industrial Relations Act  provides for review by a Judge of the Court of orders made by a Judicial Registrar.  The section is in this form:

"377(1)A party to proceedings may apply to the Court to review a Judicial Registrar's exercise in the proceedings of a power delegated under section 376.  An application must be made within the period prescribed by the Rules of Court or such further period as is allowed in accordance with the Rules.

(2)On an application under subsection (1) or of its own motion, the Court may review a Judicial Registrar's exercise of a power so delegated.  The Court may make whatever order it considers appropriate in relation to the matter in relation to which the power was exercised.

(3)On the application of a party or of its own motion, the Court may refer to a Full Court of the Court an application under subsection (1)."

It will be noted that the power of review is not limited to orders finally disposing of a claim.  It extends to interlocutory orders.  However, special considerations apply to challenges to interlocutory orders, whether by review or appeal, and especially interlocutory orders concerning matters of practice and procedure.  This has been stated by appellate courts on numerous occasions.  It is sufficient for present purposes to refer to what was said by Gibbs CJ, Aickin, Wilson and Brennan JJ in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177:

"Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure.  Counsel for Brown urged that specific cumulative bars operate to guide appellant courts in the discharge of that task.  Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties.  The opposing view is that such criteria are to be expressed disjunctively.  Cases can be cited in support of both views ... For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria.  The circumstances of different cases are infinitely various.  We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in Re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 at 323:

'... I am of the opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights.  In the former class of case, if a tight rein was not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice.  The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.'

... It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration."

The reason for the rule was elaborated by French J in Bomanite Pty Limited v Slatex Corporation Australia Pty Limited (1991) 32 FCR 379 at 391:

"The leave requirement for appeals from interlocutory decisions reflects a policy of restraint on the part of the court in the discharge of its appellate functions with respect to the decisions of its judges taken in the exercise of original jurisdiction regulating the preparation and progress of matters for trial.  Absent such a policy there is a risk that the pre-trial process in hotly contested cases would become fragmented and more expensive and lengthier than it has to be.  Moreover, the authority of judges charged with giving directions affecting the management of cases to the point of trial would be diminished.  And even when leave is granted, the court on appeal will not in such a case interfere with the exercise of judicial discretion unless it is satisfied that there has been some error of law or logic or some unfairness which is either apparent on the face of the reasons or implicit in an unreasonable result:  see Squire v Rogers (1979) 39 FLR 106 at 113-114; Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388 at 393-394."

In the present case there was no error of law or logic or unfairness in Mr Walker's decision to set the matter down for trial. The case had already been to the Commission for conciliation. No conciliation conference had been held, but that was not the fault of either the applicant or the Commission. It was because no director of the respondent was available on the appointed day and, so it was said, none would be available for some months. Having regard to that intimation, it was understandable that the Commission issued a certificate under s.170ED(2). Especially since the June 1994 amendments to Part VIA of the Act, which substituted a new s.170EE, the legislative emphasis has been on reinstatement of unlawfully terminated employees. As now framed, s.170EE limits the award of compensation in lieu of reinstatement (as distinct from compensation as an adjunct of reinstatement) to cases where the Court thinks that "reinstatement of the employee is impracticable". The practicability of reinstatement is drastically affected by delay in determining a claim. Consequently, it is incumbent on the Commission to deal with references as quickly as possible. If it is apparent that there will be a substantial delay before a conciliation hearing can be arranged, the proper response, consistently with the philosophy underlying Part VIA, is to issue a certificate under s.170ED(2) and allow the Court to fix an early hearing date.

The argument put by Ms Obrart to Mr Walker, that the matter ought to be returned to the Commission because of the amendment of Mr Foxcroft's claim, is difficult to follow.  The amendment sought reinstatement.  Either the respondent was prepared to consider reinstating Mr Foxcroft or it was not. If it was, Ms Obrart could have put an offer of reinstatement directly to Mr Foxcroft's solicitor.  Solicitors have been settling cases by direct negotiation since time immemorial.  Valuable as mediation is, it is fallacious to think it provides the only method of settling litigation.  If, on the other hand, the respondent was unwilling to reinstate Mr Foxcroft, it is difficult to see what would have been achieved by a mediation conference.  The parties being at issue on the matter, what was needed was a determination by an independent arbiter.

It seems to me that Mr Walker understood all this.  If I had been in his position, I would have made the same decision he did.  But, even if I would have taken a different view, that would not have entitled me to overrule his decision.  Absent an error of law or logic or an element of unfairness, and none was suggested by Ms Obrart in argument before me, the principles to which I have referred required me to uphold the Judicial Registrar's decision.  I had no option other than to dismiss the application for review.

The application for costs made by Mr Dubler, on behalf of Mr Foxcroft, requires reference to s.347 of the Act. This Court has power to make a costs order; see Canceri v Taylor (Moore J, 11 August 1994, not yet reported). However, the restrictions imposed by s.347 often preclude an order for costs. Section 347 reads:

"347(1)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.

(2)In subsection (1):

'costs' includes all legal and professional costs and disbursements and expenses of witnesses."

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), an application for leave to appeal (see Thompson v Hodder (1989) 29 IR 339) or a motion for punishment for contempt (see Gregory v Philip Morris Ltd (1987) 74 ALR 300. An application for review of a Judicial Registrar's decision is a proceeding in a matter. If an application is made vexatiously or without reasonable cause, the exception in s.347 operates to permit the Court to order the applicant for review to pay the costs incurred by any other party in connection with that application.

In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-265, I suggested a practical test for determining, in a particular case, whether a proceeding was instituted without reasonable cause:

"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."

Having looked at the matter again, I adhere to this statement.  I think it is consistent with statements in other cases:  see, for example, Heidt v Chrysler Australia Ltd (1976) 26 FCR 257 at 274-275 (Northrop J), The Queen v Moore; Ex parte Federated Miscellaneous Womens' Union of Australia (1978) 140 CLR 470 at 473 (Gibbs J), Naqvi v MBP (SA) Pty Ltd (1981) 36 ALR 379 at 382-384 (Evatt J), Marsh v Adamson (1985) 5 FCR 124 at 125-126, (St John and Wilcox JJ), Standish v University of Tasmania (1989) 28 IR 129 at 138-139 (Lockhart J). It is interesting to note that, in Standish, Lockhart J drew a distinction between "an argument simply proving unsuccessful" and an argument being misconceived.  An order for costs might be made in the latter case, but not the former. 

In the present case, all the relevant facts were known to the respondent before Ms Obrart filed her application for review. The relevant legal principles were clearly established, by long standing decisions of high authority. But no attempt was made to bring the case within those principles. No suggestion was made to me that Mr Walker had misapplied the law or acted illogically or unfairly. I was merely asked to substitute my judgment for his, in relation to the appropriate next procedural step. That approach was misconceived. The application for review was hopeless. It was instituted without reasonable cause. It follows that, despite the general rule embodied in s.347, the Court could make an order for the costs of the application for review. It was proper to do so. The applicant in the principal proceeding ought not to have been put to the expense of resisting this application.

I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of his Honour Chief Justice Wilcox.

Associate:

Date:   14 October 1994

APPEARANCES

Counsel for the Applicant:                 R E Dubler

Solicitor for the Applicant:                Corrs Chambers Westgarth

Solicitor for the Respondent:             A Obrart of Townsend Partners

Date of hearing:  5 October 1994