Horsman v Commissioner of Main Roads

[1999] FCA 736

FEDERAL COURT OF AUSTRALIA

Horsman v Commissioner of Main Roads [1999] FCA 736

INDUSTRIAL LAW - estoppel by conduct – assumption or expectation that issue of unfair dismissal would not be further litigated or reviewed – claim in contract – remedies sought in damages – whether appropriate to order application be dismissed – whether applicant instituted proceedings without reasonable cause.

Commonwealth -v- Verwayen (1990) 170 CLR 394, applied

BARRY STANLEY HORSMAN v COMMISSIONER OF MAIN ROADS
W 111 OF 1997

R D NICHOLSON J

2 JUNE 1999

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
DISTRICT REGISTRY	W 111 OF 1997

BETWEEN:	BARRY STANLEY HORSMAN Applicant
AND:	COMMISSIONER OF MAIN ROADS Respondent
JUDGE:	R D NICHOLSON J
DATE OF ORDER:	2 JUNE 1999
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1.        The application be dismissed.

2.        The applicant pay the respondent's costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	W 111 OF 1997

BETWEEN:	BARRY STANLEY HORSMAN Applicant
AND:	COMMISSIONER OF MAIN ROADS Respondent

JUDGE:	R D NICHOLSON J
DATE:	2 JUNE 1999
PLACE:	PERTH

REASONS FOR JUDGMENT

1. R D NICHOLSON J:  In reasons delivered on 13 April 1997 I held that the respondent could not make out his claim of estoppel by agreement or issue estoppel but did succeed in establishing estoppel by conduct.  I invited counsel to make submissions on the form of orders which would achieve "proportionality between the remedy and the detriment which is its purpose to avoid":  Commonwealth -v- Verwayen (1990) 170 CLR 394 at 413 per Mason CJ.

2. In the reasons of 13 April 1997 I found the respondent had an assumption or expectation that as between he and the applicant the issue of unfair dismissal would not be further litigated or reviewed.  It is said for the applicant that the findings of reliance by the respondent on such assumption or expectation and a detriment suffered as a result of such reliance must be limited by the scope of that assumption or expectation. 

3. In support of this the submissions for the applicant contend that the proceedings before Commissioner Laing in the Australian Industrial Relations Commission, unlike the applicant’s claim in this Court, were conciliation proceedings related only to the issue of unfair dismissal.  It is said it is apparent that the Commission did not at any time have jurisdiction to award damages for breach of contract based on a clause in a federal award which was not an express term of the contract of employment:  Byrne & Frew -v- Australian Airlines Ltd (1995) 185 CLR 410. The Commission did not have jurisdiction to determine whether there was a breach of a contract generally or jurisdiction to award interest or costs. Consequently it is submitted the respondent could not have assumed that any recommendation would prevent the applicant from further litigating a claim for damages for breach of contract, interest thereon and costs. This is the nature of the claim which the applicant now seeks to pursue. It is submitted that it is apparent that both the application and the Statement of Facts and Contentions pressing these issues go beyond the "issue of unfair dismissal" that was within the jurisdiction of the Commission.

4. For the respondent it is submitted that the claim of breach of contract relates to an alleged failure to give adequate notice of dismissal.  Accordingly, such a claim is a proceeding arising out of the circumstances of dismissal.  It was a matter in issue between the parties before the Commissioner and was the subject of his recommendation.  The respondent's compliance with the Commissioner's recommendation by paying the applicant an additional six weeks pay in lieu of notice shows, it is said, that he relied on the assumption of finality of the litigation.

5. I agree with the submissions for the respondent.  The issue of unfair dismissal is intrinsically at the foundation of the alleged claim in contract. 

6. Furthermore, the finding made in the reasons of the 13 April 1999 referred to the assumption that such issue would not be further litigated or reviewed.  The recasting of the issue in the form of another cause of action does not enable it to be characterised as other than re-litigation or review of the same issue on which the assumption or expectation was based. 

7. That this is so may be understood by reference to other portions of the earlier reasons.  It is apparent that in the written confirmation given by the applicant on 24 June 1992 to the Union, he confirmed that he would accept the outcome of the private arbitration in relation to his unfair dismissal and would "not seek to pursue this matter in any other tribunal or court". 

8. The issue of the Commission's lack of jurisdiction to award damages or make a declaration for the appellant to be reinstated is irrelevant to the scope of the estoppel.  The respondent's assumption of finality arose, not from any reliance on the Commission's powers or jurisdiction, but from the applicant's inducement of the assumption.

9. Accordingly I consider that the appropriate remedy is for the application to be dismissed.  Such remedy is proportionate to the detriment since it would do no more than avoid the detriment to the respondent of further litigation and would not be inequitably harsh to the applicant:  Verwayen above, at 413 and 443 per Mason CJ and Deane J, respectively.

10. On the issue of costs it is submitted for the respondent that in the circumstances of the case the Court has power to award costs to the respondent, if the Court is satisfied that the applicant instituted the proceedings without reasonable cause. This is a reference to s347 of the Industrial Relations Act 1988 (Cth) as it was at the relevant time reading:

    "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."

    For the respondent it is submitted the Court can be satisfied the applicant instituted the proceedings "without reasonable cause" because the applicant acted unconscionably in bringing the proceedings after inducing the respondent to assume the finality of proceedings following the Commission's recommendations and the respondent's payment to the applicant (which payment the applicant sought and accepted).  Furthermore the applicant has not produced the award provision which he claims the respondent breached.  Accordingly the respondent seeks orders that the application be dismissed and that the applicant pay the respondent's costs.

11. For the applicant it is said that the costs of the argument and submissions in relation to the preliminary issue of whether the applicant is estopped should be given to the applicant because the respondent was not successful in persuading the Court there was an estoppel by agreement.  Furthermore it is said that the argument as to estoppel by conduct should have been argued prior to the commencement of the hearing of any evidence.  The respondent did not itself call any evidence and should therefore have been able to argue the preliminary issue prior to the commencement of the substantive hearing.

12. In the way in which the hearing went off the surviving estoppel issues were in fact argued as preliminary issues.  Furthermore the effect of the judgment of 13 April 1999 viewed as a whole was that the applicant was entirely unsuccessful. 

13. I accept the submissions for the respondent and consider that for the reasons given in those submissions, the applicant instituted the proceedings "without reasonable cause".  Accordingly orders will be made that the application be dismissed and the applicant pay the respondent's costs.

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson.

Associate:

Dated:             

Counsel for the Applicant:	Mr D Van Zalm
Solicitor for the Applicant:	S C Nigam & Co
Counsel for the Respondent:	Mr B King
Solicitor for the Respondent:	Crown Solicitor of Western Australia
Date of Hearing:	28 April 1999
Date of Judgment:	2 June 1999