Lilley, Jeffrey v Nauru Local Government Council

[1979] FCA 124

IN THE FEDERAL COURT OF AUSTRALIA )	./?---b.
INDUSTRIAL DIVISION
BETWEEN :

JEFFREY LILLEY

and

Defendant

REASONS FOR JUDGMENT

21 November 1979 KEELY J .

This ig an information laid by Jeffrey Lilley (the

informant) alleging that Nauru Local Government Council (the

defendant) being the employer of the informant, did on

27 October 1978: -

11 dismiss the said Jeffrey Lilley from his employment

by reason of the circumstance that:

1. he was a member of an organization, namely, the Australian Shipping Officers' Association, an organization of employees registered under the Conciliation and Arbitration Act 1904 and the Victorian branch thereof;

2. he was entitled to the benefit of an award, namely, the Shipping Officers Award 1977, expressed to be binding upon, amongst other persons, the Nauru Pacific Shipping Line and the Australian Shipping Officers' Association and the members thereof;

or both."

Miss Maureen Hickey of counsel appeared for the informant !

and Mr Alan Stockdale of counsel appeared for the defendant.

At the conclusion of the informant's case Mr Stockdale the alleged offence, other than the reason alleged in the charge as being the reasonkr the dismissal, had been proved. submitted that there was no case to answer. After hearing

argument from both counsel on the various matters raised and

considering written submissions from each, I rejected that

submission and ruledthat there was evidence upon which the

The defendant called as its principal witness Mr Tamaiti '

Willie Star, who is both the Consul General in Australia for the Republic of Nauru and the representative in Australia of the defendant. Mr Star gave evidence that he both made the

decision to dismiss the informant and in fact dismissed him,

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although he relied upon the defendant's Personnel Officer,	I ,
Mr Grundy to advise him as to the proper procedure to be
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followed in effecting the dismissal including the question
whether the dismissal should be without notice or by giving a
payment in lieu of notice of termination.	, -

I accept the evidence of Mr Star that the informant had

admitted on 27 October 1978, the-day of his dismissal, that he had'

said to a woman represatative of the Victoria Hotel that Air

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Nauru had a bad name for not paying its accounts. Mr Star gave evidence that he dismissed the informant because he

could "no longer rely on him to promote Air ~auru" and

a related reason that on "what he has said (he is) not

suitable to continue working in that capacity or with ~auru".

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Mr Star stated that he was very concerned by the informant's statement to the representative that Air Nauru was getting a

bad name. He also specifically denied that his decision to

dismiss the informant was influenced either by the fact that:

the informant was a member of the Australian Shipping Officers' Association or by the fact that he was entitled-to the benefits of the Shipping Officers Award 1977.

Mr Star's evidence was supported by that of Mr Kelly Emiu

who is now the Nauru Consul to the Republic of China and was at the

material time employed in Melbourne as a special adviser to the

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defendant. Mr Emiu was present throughout the conversation between

the informant and Mr Star which culminated in the dismissal of the

informant and his evidence supports Mr Star as to the admission

made by the informant. I accept all of the evidence of Messrs Star

and Emiu to which I have referred and 5 reject Miss Hickey's

contention that Mr Star was evasive in giving his evidence.

The evidence of Mr Grundy, the Personnel Officer of

rile defendant since before the time of the dismissal,

supported that of Messrs Star and Emiu on a number of matters. informant was carried out by Mr Star in the presence of

M r Emiu after the informant admitted that he had volunteered

to the hotel representative that Air Nauru was getting a bad

name for not paying its accounts. Mr Grundy, on the other

hand, gave evidence that Mr Star had not told him that he had	i
I
dismissed the informant and had told Mr Grundy to dismiss	I
I
the informant if he admitted to Mr Grundy that he had	L

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volunteered the statement to the hotel representative. On

this aspect I accept the evidence of Mr Star and Mr Emiu

'i

!	which gains some support; from Lhe eviclence 01 the informanl that at the end of that conversation Mr Star had said to him
.1	:I	that "my philosphy was wrong for the company, he said I had better find another job ... I will give you two weeks to do
I	l '
II	it". Under cross examination as to that matter Mr Lilley said
1
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i He was dismissing me and giving me two weeks notice".

I do not regard the differences between the evidence

of Messrs Star and Emiu on the one hand and Mr Grundy on

the other hand as being important for the purposes of the

present proceedings. Even if the dismissal was not formally

carried out until the discussion between the informant and

Mr Grundy later that day, the evidence clearly establishes in

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my view that the decision to dismiss the informant was that

of Mr Star and the reasons for that decision were those which

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he gave in evidence. Further, on all the evidence I have no

reason to doubt Mr Star's evidence denying that the dismissal

was influenced by the informant's membership of the Association

or by the informant's entitlement to the benefit of the

Shipping Officers Award. The evidence of Mr Grundy also

specifically denied that, in deciding to dismiss the informant,

the defendant was actuated by either of the reasons alleged

in the information. The evidence of each of the defendant's

witnesses has been the subject of detailed cross examination

at considerable length, but each has maintained the denial

sworn to in his evidence in chief.

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Section 5 ( 4 ) of the Act provides that:

18 (4) In any proceedings for an offence against this

section, if all the relevant facts and circumstances,

other than the reason or intent set out in the

charge as being the reason or intent of an action

..	alleged in the charge, are proved, it lies upon the
person charged to prove that that action was not 11
actuated by that reason or taken with that intent. >

The defendant is of course only required to satisfy the Court on the balance of probabilities as to the matters referred to

Assuming without deciding that the evidence before the

Court establishes beyond reasonable doubt all the relevant facts and circumstances other than the reason set out in the

charge as being the reason for the dismissal, I am satisfied

that the defendant, in deciding to dismiss the informant, was

not actuated by any of the reasons or circumstances alleged in

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the information.

Accordingly the information is dismissed.

(After hearing argument as to costs.)

Mr Stockdale on behalf of the defendant has asked for

an order that the informant pay the costs of the defendant on

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the ground that ~e informant instituted the proceedings ...

without reasonable cause" within the meaning of s.197A of the

Conciliation and Arbitration Act 1904.

In the case of re Australian Conciliation and Arbitration

Commission and Others: ex parte Federated Miscellaneous Workers

Union of Australia (1978) 22 A.L.R. 347 at pp.349-350 Gibbs J.

said : -

"The respondent, the Australian Workers Union, has

applied for costs on the ground that the proceeding

was instituted by the prosecutor 'without reasonable

cause' within the meaning of s.197A of the Act. In

my opinion a party cannot be said to have commenced I

a proceeding without reasonable cause', within the

meaning of that section, simply because his argument and that the argument has failed, is no justification for ordering costs in the face of the prohibition contained in s.197A."

proves unsuccessful. In the present case the argument

presented on behalf of the prosecutor was not unworthy

of consideration and it found some support in the two

decisions of this court to which I have referred.

Mr Stockdale relied upon the decision of Northrop J.

in Heidt v. Chrysler Australia Ltd (1976) 26 F.L.R. 257 in

which case at p.271 His Honour gave a separate judgment giving reasons for ordering an unsuccessful informant in a proceeding under s.5 to pay costs. I

I agree with Mr Justice Northrop's statement at p.272 I

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that :

"The policy of s.197A of the Act is clear. It is

designed to free parties from the risk of having

to pay the costs of an opposing party. AL the same

time the section provides a protection to parties

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defending proceedings which have been instituted

vexatiously or without reasonable cause. This

protection is in the form of conferring a power in

the court to order costs against a party who, in

substance, institutes proceedings which in other

jurisdictions may constitute an abuse of the	I'
process of a court.

At p.274 Mr Justice Northrop, in dealing with the principle

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applicable to s.l97A, quoted from the judgment of Barwick C.J. in General Steel Industries Inc. v. Commissioner for Railways

(N.S.W.) (1969) 112 C.L.R. 125 at p.138, an extensive passage

which included the following passage from the judgment of

Dixon J. in Dey v. Victorian Railways Comissioners (1949)

78 C.L.R. 62 at p.91. That passage from the judgment of

Dixon J. is set out at p.274 of the judgment of Northrop J. in Heidt's Case (supra) and is as follows:

11 But once it appears that there is a real question

to be determined whether of fact or law and that

the rights of the parties depend upon it, then it

is not competent for the court to dismiss the

action as frivolous and vexatious and an abuse of	It
process.

In Heidt's Case (supra)Northrop J. expressed the view

that a similar principle should be applied when considering

the question of costs under s.197~	and continued at p.274-275.
I quote:

I1 Great care must be exercised to ensure that in

finding that a party has instituted proceedings

vexatiously or without reasonable cause, that

party is not improperly deprived of his freedom

from liability to pay costs to an opposing party.

The test is a substantial one.

In considering this matter the court must have

regard to all the material properly before it. instituting the proceedings as at the time of the

institution of the proceedings. The conduct of

the opposing party prior to the institution of

the proceedings may be relevant in deciding whether

the proceedings were instituted vexatiously or

without reasonable cause. The conduct of the

opposing party both prior and subsequent to -the

institution of proceedings may be relevant to the

discretion remaining in the court. It may be

difficult to satisfy the test where disputed

questions of fact arise and the proceedings

eventually are dismissed because the court finds

the facts adverse to the party instituting the

proceedings. There the test is satisfied, having

regard to the general policy of the section, the

court may, nevertheless, in the exercise of-its II

discretion, make no order as to costs.

In applying those principles to the facts of the

- matter before hi111 and in deciding Lo order the informant

in that case to pay costs, Northrop J. said, at p.275:

'.

1' There was no basis whatever for claiming that he

had been dismissed by reason of the circumstance

that he was a member of an organization or was

entitled to the benefit of an award. In evidence

the informant said that he knew that the immediate

reason for his dismissal was because he refused to

work on a foreman team. He said also that 'he

suspected there was much more', but, when asked what these reasons were he did not include as a reason that, being a member of an organization

seeking better industrial conditions he was

dissatisfied with his existing conditions. His

suspicions were directed to matters arising when 1

he was a shop steward. His claims were manifestly '

groundless' and were bad beyond argument'.

In the present case I am unable to hold that the

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informant's institution of the proceedings was manifestly

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groundless" or that his case was bad beyond argument".

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Unlike Heidt's Case (supra) there is no evidence before me that the informant believed that the reason given by Mr Star for his dismissal was the only substantial reason operating

on the defendant's mind in deciding to dismiss him. I am

not prepared to infer such a belief from the very brief

evidence of Miss Barton upon which Mr Stockdale relied that

the informant told her on the day of his dismissal that he

had been sacked because of his discussion with the hotel

representative.

Having regard to all of the evidence in the case and

in the absence of evidence that the informant believed that

he was dismissed for the reason given by Mr Star, I am not

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satisfied that the informant instituted these procecdings

without reasonable cause. Accordingly, there will be no

order as to costs.

1 certify t h a t th13 and t h ~

prec?clz~?g ??.Gas are a tl-;~e c o ~ y of the

Relsi<s fcr jud,-z$ni herelncfhls~cnour

Zir, j c a ~ l c e

" W . Asscclar;~