Matthews v Australian Postal Corporation - [2007] FMCA 1174

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MATTHEWS v AUSTRALIAN POSTAL CORPORATION

[2007] FMCA 1174

INDUSTRIAL LAW – Unlawful termination of employment – application to a Federal court – certificate required from Australian Industrial Relations Commission – applicant applied to the Commission only in relation to unfair dismissal – application to Court dismissed as incompetent.

INDUSTRIAL LAW – Unsuccessful application to Court – instituted without reasonable cause – costs awarded against applicant.

Federal Court of Australia Act 1976 (Cth), s.32AB(2)(b)
Federal Magistrates Court Rules 2001 (Cth), rr.13.03A, 13.03A(e), 13.10(a), 16.05, 16.05(2)(a), 21.02(2)(a), Sch.1
Workplace Relations Act 1996 (Cth), ss.643, 643(1), 650, 650(2), 659, 660, 661, 663, 663(1), 663(2), 663(5), 663(5)(a), 665, 666, 666(1)(a), 673

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Nestlé Australia Ltd [2005] FCA 717
Bahonko v Southern Health Care Network [1999] FCA 479
Geneff v Peterson (1986) 19 IR 40
McShane v Gippsland & East Gippsland Aboriginal Cooperative Limited [2002] FCA 1591
Ross; Ex parte Crozier [2001] FCA 1665

Applicant:

BRETT MATTHEWS

Respondent:

AUSTRALIAN POSTAL CORPORATION

File Number:

SYG1511 of 2007

Judgment of:

Smith FM

Hearing date:

11 July 2007

Delivered at:

Sydney

Delivered on:

11 July 2007

REPRESENTATION

Counsel for the Applicant:

No appearance by or on behalf of the applicant

Counsel for the Respondent:

Mr M Tamvakologos

Solicitors for the Respondent:

Blake Dawson Waldron

ORDERS

The substantive application is dismissed under Rule 13.10(a).
The applicant must pay the respondent’s costs set under Rule 21.02(2)(a) in the sum of $4,000.
The respondent must within the next 2 days send to the applicant a copy of today’s order, and must inform the applicant of the provisions of Rule 16.05(2)(a) and that the Court would expect that any application to set aside the order would be filed within 21 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG1511 of 2007

BRETT MATTHEWS

Applicant

And

AUSTRALIAN POSTAL CORPORATION

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

I have before me an interlocutory application brought by a respondent for summary dismissal of a proceeding commenced in the Federal Court on 4 April 2007 by Mr Matthews, whom I shall refer to as the applicant. The applicant, acting for himself, sought to invoke the Federal Court’s jurisdiction under s.663 of the Workplace Relations Act 1996 (Cth) (“the Act”). This Court has concurrent jurisdiction with the Federal Court under that section.
On 11 May 2007 the application was transferred to this Court by order under s.32AB(2)(b) of the Federal Court of Australia Act 1976 (Cth), made on the initiative of the docket judge. It appears that this order was made at the first direction’s hearing, and in the absence of an appearance by or on behalf of the applicant.
There was also no appearance by or on behalf of the applicant at a direction’s hearing held before me on 8 June 2007, when I fixed the respondent’s application for summary dismissal for hearing today. I am satisfied that the applicant has been put on notice of today’s listing, and of the evidence and written submissions now relied upon by the respondent.
The applicant has again not appeared today, and in those circumstances the Court has power under r.13.03A of the Federal Magistrates Court Rules 2001 (Cth) to take various courses, including dismissing the application for absence, or proceeding with the hearing in relation to the respondent’s application for summary dismissal.
I would normally take the former course in a jurisdiction where costs followed the event, since that would not require the Court to form a concluded opinion on the merits of the substantive matter in the absence of the applicant. I consider that this is preferable, since an applicant whose application is dismissed in his or her absence has a right under r.16.05(2)(a) to apply to the Court to set aside the order. In such an application the applicant then needs to point to sufficient merits to justify the reinstatement of the proceeding, and it is usually appropriate for the Court to reserve until such an application any opinions on the merits of the substantive matter.
However, in the present case the respondent seeks orders by way of costs against the applicant and, as I shall explain, the provisions of s.666 of the Act require me to form a judgment as to the merits of the matter, before I can award costs to the respondent. I have therefore decided to proceed with the hearing of the respondent’s interlocutory application on an undefended basis under r.13.03A(e). However, it should be clear that the opinions I express below have been made without having an opportunity to hear the applicant both on questions of law and fact, and that they are for that reason provisional. The applicant will have the right to apply to the Court under r.16.05, if he feels that he has arguments or evidence which might cause me to re‑consider any of the opinions which I express below.
An employee’s right of application to the Federal Court or this Court under s.663(1) and (2) following the termination of his or her employment, is available where the termination is alleged to have involved a contravention of ss.659, 660 or 661. Those provisions concern terminations of employment involving contraventions of the Act which are referred to as “unlawful termination”. In particular, s.659 prohibits termination of employment on various grounds, including “for reasons” of “race”.
The Court’s jurisdiction to entertain an application alleging such a contravention is subject to the provisions of s.663(5):
663Application to courts in relation to alleged contravention of section 659, 660 or 661
(5)An application under subsection (1), (2), (3) or (4) in respect of an alleged contravention of section 659, 660 or 661 may not be made to a court unless the applicant:
(a) has received a certificate under subsection 650(2) regarding conciliation of an application made wholly or partly on the ground of the alleged contravention; and
(b) has elected under section 651 to begin proceedings in that court for an order under section 665 in respect of the alleged contravention.
The reference to a certificate under s.650(2) is to the procedure which an applicant is required to pursue in the Australian Industrial Relations Commission before he or she can invoke the Court’s jurisdiction.
Under sub‑div.B of Div.4 of Pt.12 of the Act, applications can be made to the Commission under s.643 alleging a termination of employment was “harsh, unjust or unreasonable” (which I shall collectively refer to as “unfair termination”), or on the ground of contravention of ss.659, 660 or 661 (“unlawful termination”). The employee may also apply to the Commission on a combination of those grounds. All such applications are required to go to conciliation first, assuming that they pass through various hurdles set out in provisions of sub‑div.B which are not relevant to the present matter.
Under s.650:
650Conciliation
(1)When an application is lodged with the Commission, the Commission must attempt to settle the matter to which the application relates by conciliation.
(2)If the Commission is satisfied that all reasonable attempts to settle the matter by conciliation are, or are likely to be, unsuccessful so far as concerns at least one ground of the application, the Commission:
(a)     must issue a certificate in writing stating that it is so satisfied in respect of that ground or each such ground; and
(b)     must indicate to the parties the Commission’s assessment of the merits of the application in so far as it relates to that ground or to each such ground; and
(c)     if the Commission thinks fit, may recommend that the applicant elect not to pursue a ground or grounds of the application (whether or not also recommending other means of resolving the matter); and
(d)     if the Commission considers, having regard to all the materials before the Commission, that the application has no reasonable prospect of success, it must advise the parties accordingly.
It is at this point, that the original grounds of the application to the Commission become significant to the rights of the employee subsequently to pursue remedies in a Federal court. Under complex provisions involving elections, an applicant is entitled to elect to proceed to arbitration within the Commission, and has no right to elect to pursue Court remedies, where only a ground of unfair termination has been alleged in the application to the Commission. However, if the original application to the Commission made or included a claim of unlawful termination, then he can elect to take that part of the proceeding either on arbitration within the Commission, or to a Court under s.663.
The effect of s.663(5)(a) is to condition the Court’s jurisdiction to entertain an application under that section upon the giving by the Commission of a certificate under s.650(2), which evidences conciliation of an application to the Commission made on grounds which included a ground of unlawful termination.
Authorities in relation to indistinguishable provisions under the legislation as it stood prior to the Work Choices amendments held that the Court’s satisfaction that there is a certificate as described in s.663(5)(a) is a pre‑condition on the Court’s jurisdiction. I accept the respondent’s submission that I should follow those authorities in the present case (see Bahonko v Southern Health Care Network [1999] FCA 479 at [11] and McShane v Gippsland & East Gippsland Aboriginal Cooperative Limited [2002] FCA 1591 at [6]).
The respondent’s present interlocutory application seeks the summary dismissal under r.13.10(a) of the Federal Magistrates Court Rules of the applicant’s substantive application. It is contended in terms of that rule that “the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim;” on the ground that the application is incompetent due to the absence of a certificate as required by s.663(5)(a) of the Workplace Relations Act.
For reasons, which I shall now explain, I consider that this contention is made out on the evidence before me.
The applicant did apply to the Commission concerning the termination of his employment by the respondent on 28 December 2006. This occurred after an investigation by relevant officers of the respondent, including a referral to a Board of Reference in which the applicant was represented by an officer of his union. There is in evidence the applicant’s statement which appears to have gone to that Board, and also to have been placed before the Commission subsequently. In this, the applicant made complaints about how he had been treated in the course of his employment, including allegations of “harassment, bullying and discrimination” with reference to his “background as an Aboriginal person”. For their part, the applicant’s managers complained that the applicant had absented himself without approval and had not complied with directions as to attendance, giving rise to grounds for termination. The Board of Reference arrived at conclusions supporting the employer’s view of the situation.
In the applicant’s formal application for relief submitted to the Commission, item 18 required him to tick boxes indicating “grounds upon which this application is based”, so as to identify the ground or grounds under s.643(1) of the Workplace Relations Act upon which the application was based. It thus invited the applicant to specify whether unfair termination, or unlawful termination, or a combination of these, was being alleged. I accept the respondent’s affidavit evidence that the application actually submitted to the Commission ticked only a box indicating that it was made “(a) on the ground that the termination was harsh, unjust or unreasonable;” and that boxes raising contentions of unlawful termination were not ticked.
It may be that the applicant’s statement obliquely alleging racial discrimination was also presented to the Commission. However, if it is a matter for this Court to characterise the application to the Commission, I would not characterise the applicant’s application as having been made on any ground of unlawful termination. In my opinion, the manner of completion of the form of application showed a clear intention to the contrary, which was not modified by the contents of the applicant’s statement of evidence.
According to evidence presented by the respondent, the application to the Commission was listed on 30 March 2007 for a compulsory conciliation conference, at which the applicant was assisted by an official of his union. An affidavit read by the respondent states:
6.During the conciliation conference, at a time when the parties had been separated into different rooms, Commissioner Redmond advised me that the Applicant was seeking to amend the Commission Application to add to the ground that his termination of employment was unlawful. Commissioner Redmond advised me that he had refused to amend, or allow the amendment of, the Commission Application.
The conciliation conference was unsuccessful, and a certificate was then issued which is in evidence before me. It certifies only that:
An application for relief in respect of termination of employment has been lodged on the following ground or grounds:
·the ground referred to in s.643(1)(a), that the termination was harsh, unjust or unreasonable
The certificate certifies that reasonable attempts to settle the matter have been unsuccessful:
… in respect of the following ground or grounds:
·the ground referred to in s.643(1)(a), that the termination was harsh, unjust or unreasonable
There is no evidence before me that any certificate has been issued identifying conciliation of an application made “wholly or partly on the ground” of a contravention of ss.659, 660 or 661.
I am therefore satisfied on the evidence before me that this Court does not have jurisdiction. I am so satisfied, whether the true construction of s.663(5)(a) requires or allows the Court itself to determine the character of the application which was addressed by the Commission’s certificate, or whether the certificate is conclusive in that respect.
It follows from that finding that the application to the Federal Court which has been transferred to this Court has no reasonable prospect of success, and I am satisfied that it is appropriate in the circumstances to dismiss the application summarily under r.13.10(a) of the Federal Magistrates Court Rules.
In relation to the respondent’s costs, submissions were made by the respondent’s counsel as to the effect of s.666:
666Costs
(1)Subject to this section, a party to a proceeding under section 663 must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first–mentioned party:
(a) instituted the proceeding vexatiously or without reasonable cause; or
(b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first–mentioned party in connection with the conduct of the proceeding.
(2)Subsection (1) does not empower a court to award costs in circumstances specified in that subsection if the court does not have the power to do so.
(3)In this section:
costs includes all legal and professional costs and disbursements and expenses of witnesses.
It was submitted that the present proceeding was not a proceeding “under s.663” because it was incompetent under that section, so that normal powers to award costs were available. However, in my opinion the provisions of s.666 apply in the circumstances of the present case.
I consider that s.666 should be applied in the same manner that the courts have applied the costs preclusion provisions of the legislation which limit the award of costs in a “matter arising under the Act”. The test in cases where this has been applied is whether “the right or the duty that is sought to be enforced owes its existence to a provision of the…Act” (see Ross; Ex parte Crozier [2001] FCA 1665 (“Crozier”) at [5] and authorities there cited). In my opinion, the reference in s.666 to “a proceeding under section 663” should be construed to encompass a proceeding sought to be brought under that section, but which was incompetent for the reason which I have found in this case.
I must therefore address the pre‑conditions to the costs power provided in s.666(1). Crozier’s case (supra) at [9] cites authorities on the meaning of “without reasonable cause”, including reference to a judgment of Wilcox J which includes the proposition: “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”.
Other authorities require the Court to consider the merits of the institution of the proceeding by reference to the cautious tests which are applied on applications for summary dismissal. Crozier’s case also suggests at [11] that an applicant who has the benefit of a provision such as s.666: “will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances”. I was also referred to other authorities including Geneff v Peterson (1986) 19 IR 40, and have also been assisted by the judgment of Marshall J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Nestlé Australia Ltd [2005] FCA 717 and cases cited by him.
In my opinion, applying the above authorities, the circumstances which I have set out above show that the applicant’s initiating application was “obviously untenable”, “manifestly groundless”, and “bad beyond argument”, on the material presented to me. The manifest absence of jurisdiction has not been controverted by any evidence or submissions which the applicant has seen fit to present to the Court.
Moreover, I accept a submission made by the respondent referring to the material originally presented to the Court by the applicant at the time of filing his application. This included a copy of a document which purported to be a copy of the application that the applicant had made to the Commission, and which contained an alteration to item 18 so as to show a box being ticked suggesting that the application was made “on the ground of an alleged contravention of section 659 (discrimination or other prohibited reasons)”. The alteration shown on this document suggests to me that the applicant was aware at the time of filing his present application that his original application to the Commission had not been made on that ground, and that he was aware that his application to the Court was incompetent. A contention to this effect was made in written submissions which have been filed by the respondent and served on the applicant, and he has not presented any material to contradict the submission nor to persuade the Court not to draw the submitted inference. In all the circumstances, I am therefore satisfied that the present application was instituted by the applicant “without reasonable cause”, and that the pre‑condition to an award of costs has been made out.
The Court in such cases still has a discretion whether to award costs, and in the exercise of its discretion may examine the whole circumstances in which the application was instituted in the Court.
In the present case, it is conceivable that the applicant has been poorly assisted by his union or some other source of advice. He may not have been properly advised of avenues which he could have pursued within the Commission if he had a complaint of racial discrimination, whether by way of appeal from the refusal of the Commissioner to allow an amendment of the application, or by way of a second application under s.673 of the Workplace Relations Act, or some other procedure. He may also not have been properly advised about the incompetence of his application to the Court, or may have misunderstood their effect. The provisions of the legislation in relation to applications to the Commission and to a Court are so complex, that a person in the situation of the applicant might reasonably not understand the jurisdictional limits which govern the Court’s jurisdiction and the procedures which need to be pursued. In some circumstances, evidence pointing to such explanations or background state of mind on the part of an applicant might be sufficient to persuade a Court not to award costs in the exercise of its discretion.

However, the applicant has not presented any such evidence to the Court, and I am left only with the material presented by the respondent suggesting an awareness of the incompetence of the application. I cannot find in the evidence before me any extenuating circumstance explaining the bringing of a manifestly hopeless application to the Court. In all the circumstances, I therefore have concluded that, the hurdle in s.666(1)(a) having been overcome, the respondent is entitled to an award of costs to follow the event.
However, I am not persuaded in the present situation that indemnity costs should be awarded against the applicant. I consider that the respondent properly identified and raised a clear objection to jurisdiction. However, the costs incurred on its part (as claimed from the bar table) very substantially exceed the scales applied in this Court. The transfer of the matter to this Court apparently occurred because it was regarded as a cheaper and more suitable venue for the resolution of this case. In all the circumstances, I am not persuaded that I should award costs in the full amount sought by the respondent.
Taking into account the provisions of Sch.1 to the Federal Magistrates Court Rules in a global way, and considering an amount which in my opinion would be reasonably awarded against the applicant on a party‑party basis in the circumstances shown on the material before me, I consider that an appropriate lump sum award of costs in this matter is the amount of $4,000. I shall therefore order the payment of that amount under r.21.02(2)(a).

I certify that the preceding thirty‑five (35) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate: Lilian Khaw

Date: 30 July 2007