Radha v ING Investment Management Ltd - [2008] FMCA 75

FEDERAL MAGISTRATES COURT OF AUSTRALIA

RADHA v ING INVESTMENT MANAGEMENT LIMITED

[2008] FMCA 75

INDUSTRIAL LAW – Employment – termination – application under s.659 of the Workplace Relations Act1996 (Cth) – application discontinued.

COSTS – Operation of s.666 of the Workplace Relations Act 1996 (Cth).

Conciliation and Arbitration Act1904 (Cth) (repealed)
Federal Magistrates Act 1999 (Cth), s.18
Federal Magistrates Court Rules 2001 (Cth), r.21.07(1)(a)
Legal Professional Act 2004 (NSW), s.347
Workplace Relations Act 1996 (Cth), ss.643, 650, 651, 659, 660, 661, 663, 666

Dey v Victorian Railways Commissioners (1949) 78 CLR 62
General Steels Industries Inc v Commission of Railways(NSW) (1964) 112 CLR 125
Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120
He v Lewin,in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161
Heidt v Chrysler Australia Ltd (1976) 26 FLR 257
Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572
R v Moore; ex parte Federated Miscellaneous Workers Unionof Australia (1978) 140 CLR 470
Re Ruth Margaret Geneff v F.E. Peterson & Others [1986] FCA 432
Re Wakim; ex parte McNally (1999) 198 CLR 511
Ross, Re; Ex parte Crozier [2001] FCA 1665
Wang v University of New South Wales [2005] FCA 1040
Zhang v The Royal Australian Chemical Institute Inc [2005] FCAFC 99

Applicant:

SHALINI RADHA

Respondent:

ING INVESTMENT MANAGEMENT LIMITED

File number:

SYG 799 of 2007

Judgment of:

Lloyd-Jones FM

Hearing date:

16 November 2007

Delivered at:

Sydney

Delivered on:

1 February 2008

REPRESENTATION

Counsel for the Applicant:

Ms A J Tibbey

Solicitors for the Applicant:

Bullivants Legal

Solicitors for the Respondent:

Mr SL Booker of Fisher Cartwright Berriman

ORDERS

The application for costs is dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 799 of 2007

SHALINI RADHA

Applicant

And

ING INVESTMENT MANAGEMENT LIMITED

Respondent

REASONS FOR JUDGMENT

The proceedings

This is an interlocutory application brought by the respondent in the case, ING Investment Management Ltd, for an award of costs after the applicant in the case, Ms Radha, discontinued her claim. Ms Radha commenced an application in the Federal Magistrates Court on 8 March 2007 seeking a declaration that her dismissal from her workplace contravened s.659 of the Workplace Relations Act1996 (Cth) (the “Act”) and for compensation, damages, costs and interest. The matter was subsequently adjourned on a number of occasions to allow related proceedings in the Australian Industrial Relations Commission (AIRC) to be resolved. On 17 September 2007, Ms Radha filed a notice of discontinuance in these proceedings.
Ms Radha originally filed an application for relief with the AIRC on 12 December 2006 in relation to her termination of employment. At the first Court date, Ms Tibbey for Ms Radha stated that the application filed in the AIRC was under s.659 of the Act (unlawful termination) and in fact the application indicated clearly no notice had been given. Ms Radha’s then representative failed to tick the box on the AIRC application form in relation to s.643 of the Act (unfair dismissal). This was brought to the attention of the Commissioner at the conciliation conference and formerly noted. Commissioner Redmond issued a conciliation certificate which did not remark on the merits of the matter other than that it could not be conciliated and therefore the certificate was issued in relation to the s.659 claim.
On 28 February 2007, the new solicitors retained by Ms Radha applied to the AIRC to amend the original claim to include s.643 and the failure to give notice. Ms Tibbey advised me at the first Court date that the new solicitors had not received any notification from the AIRC about the status of the application to amend. I was also informed that on receiving the conciliation certificate in respect of the s.659 claim, Ms Radha’s solicitors proceeded to file the application in this Court but had not filed a certificate of election in the AIRC. A separate and further application has been filed with the AIRC seeking an extension of time pursuant to s.651(9) of the Act. Consequently, Ms Tibbey suggested that in order to give the AIRC appropriate time to consider both the application seeking an extension of time to file a notice of election and to amend the application form concerning the s.643 issue, it would be appropriate to stand the matter over for one month. Ms Tibbey advised the Court that the applicant relied on the associated jurisdiction of the Federal Magistrates Court to amend the original unlawful dismissal claim.
Mr Booker for ING Investment raised a jurisdictional objection to the unfair dismissal claim on the basis that Ms Radha was terminated for a genuine operational reason and that her position became redundant. Mr Booker also objected to the new unfair dismissal claim which, if allowed to go ahead at that point, would have been out of time according to the Act. The matter was adjourned for approximately one month to allow the AIRC proceedings to be determined prior to establishing a timetable for a hearing in this Court. Subsequently, Commissioner Redmond accepted Mr Booker’s argument and the unfair dismissal proceedings were dismissed for want of jurisdiction. As a consequence of the AIRC decision, Ms Radha discontinued her claim in this Court.
There are limitations in the Act which prevent both types of claims from being pursued in respect of the one termination. Due to the discontinuance of the application in this Court, these issues were not ventilated.

Evidence

The following affidavit material has been filed in these proceedings and is the only evidence before the Court:
a)affidavit of John Michael Abraham sworn 7 March 2007;
b)affidavit of Steven Lawrence Booker affirmed 23 March 2007 (“first affidavit of Mr Booker”);
c)affidavit of Marc-Eric Roger Pricaud sworn 11 October 2007;
d)affidavit of Steven Lawrence Booker sworn 16 November 2007 (“second affidavit of Mr Booker”).

ING Investment’s submissions

Mr Booker asserts that Ms Radha commenced the Federal Magistrates Court proceedings without reasonable cause. If an employee makes an internal complaint to their employer without any attempt to complain to an external body or commence proceedings externally, and if the complaint is a reason or part of the reason for the termination, that is not sufficient in itself to constitute a breach of s.659(2)(e) of the Act.
Mr Booker relies on He v Lewin,in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161, Zhang v The Royal Australian Chemical Institute Inc [2005] FCAFC 99 and Wang v University of New South Wales [2005] FCA 1040 which were decided before the “WorkChoices” reforms and brought pursuant to s.170CK(2)(e) of the then Act. That subsection is in identical language to s.659(2)(e) of the current Act.
Mr Booker refers to He v Lewin at [44]:
[44] The fact that no application was made to the Commission in respect of any ground specified in s 170CK may not have been an accident. At the time of his application, and in the hearing before Commissioner Lewin, Mr He was legally represented. So far as the evidence before this Court goes, it appears that the only complaints Mr He made about the issue of the crane capacity and the issue of underpayment of superannuation were complaints made to management of the second respondent. Section 170CK(2)(e) is directed to the making of complaints to outside authorities, either by way of instituting proceedings against an employer, or by way of making allegations to officials who are empowered to investigate such allegations. The ground would not be established by the making of complaints directly to the employer alone.
Mr He’s application in that case was unsuccessful.
Zhangv The Royal Australian Chemical Institute Inc followed He v Lewin:
[22] In my opinion, there is no reason to doubt the correctness of the construction of s 170CK(2)(e) arrived at in He. Indeed, for the reasons which follow, I agree with that construction.
The operation of the provision was discussed in Zhangv The Royal Australian Chemical Institute Inc at [25]-[26]:
[25] In my opinion, that cannot be so on a plain reading of the subsection. Section 170CK(2)(e) speaks of ‘filing’ a complaint. An employee who complains to his/her employer does not thereby file a complaint. A complaint can only be filed somewhere and with someone other than the employer and probably only to a Court or Tribunal. That is consistent with reading the ‘filing of a complaint’ with the words that follow ‘or the participation in proceedings’, namely ‘against an employer involving alleged violation of laws or regulations’.
[26] The use of the word ‘against’ in s 170CK(2)(e) also means that the complaint must be to someone other than the employer. An employee who complained to the employer about the employer’s conduct would not be filing a complaint ‘against’ that employer.
The Court then dealt with the question of a costs order under s.170CS of the previous Act which is identical in language to s.666 of the current Act:
[56] An order for costs made under s 170CS is an exercise of discretion on the part of the judge which can only be exercised if one of the grounds in s 170CS for its exercise have been made out.
In Wang v University of New South Wales, the applicant made complaints to her employer about issues in the workplace but no complaint was made to an external authority:
[6] Officers of the University made investigations concerning the matters of complaint. Ms Wang claims these investigations were inadequate and reached incorrect conclusions. There is dispute between the parties concerning those claims and Ms Wang's criticisms of the University's grievance procedures. At no time, did Ms Wang complain to any authority outside the University. Nor did she institute any proceeding against the University until the commencement of the present proceeding, after her termination. At no time, did she seek recourse to any administrative authority outside the University.
Justice Wilcox then stated in that case:
[8] Ms Wang concedes that at no stage did she file any complaint, or participate in any proceedings, or have recourse to any competent administrative authority outside the University itself. There is Full Court authority for the view that para (e) of s 170CK(2) is limited in its application to actions external to the employer itself.
[9] The matter was dealt with briefly by Gray, Whitlam and Mansfield JJ in He v Lewin [2004] FCAFC 161 (‘He’). At para 44, their Honours said:
Section 170CK(2)(e) is directed to the making of complaints to outside authorities either by way of instituting proceedings against an employer, or by way of making allegations to officials who are empowered to investigate such allegations. The ground would not be established by the making of complaints directly to the employer alone.
[15] The factual situation in the present case is similar to that encountered in both He and Zhang. I emphasise that Ms Wang is entitled to have the benefit of favourable assumptions concerning any relevant disputed facts. Her problem is that there is no relevant disputed fact. Ms Wang concedes she made no complaint, participated in no proceeding, and had no recourse to administrative authorities outside the University. It follows that s 170CK(2)(e) of the Act is inapplicable to her claim.
[16] Accordingly, there is no reason to allow the case to proceed. It must fail, as a matter of law. In this situation, it is correct to say that no reasonable cause of action is disclosed. Order 20 r 2(1)(a) applies to the proceeding.
The issue of costs was addressed in Wang v University of New South Wales at [18]:
[18] I order that the application be dismissed pursuant to O 20 r 2(1)(a) of the Federal Court Rules and that Ms Wang pay the costs incurred by the University in relation both to the notice of motion and the principal proceeding.
Mr Booker relies on his first affidavit and in particular Annexure “B” which is a letter addressed to John Abraham of Bullivants Legal, Ms Radha’s solicitors. Mr Booker drew my attention to paragraphs 4,5 6 and 7 of that letter:
4. More importantly, the Full Court of the Federal Magistrates Court of Australia has held that the previous section 170 CK(2)(e) of the Act, which is in identical language to section 659(2)(e), does not apply to complaints made internal to an employer (such as your client’s complaint to our client’s human resources department);
5. in this regard, our client relies on He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161 (21 June 2004), a copy of which was provided to your client’s representative at the conciliation conference;
6. in addition, we note that in Wang v University of New South Wales [2005] FCA 1040 (26 July 2005), a claim for alleged unlawful termination of employment in contravention of the previous section 170 CK(2)(e) of the Act was struck out with costs based on the plaintiff’s acknowledgment that she had not made a complaint to any external body;
7. we put your client on notice that should she proceed with her unlawful termination claim, we will apply to the Federal Court to have the claim summarily dismissed with costs awarded to our client;
Mr Booker indicates that this letter was written and forwarded prior to the proceedings commenced in this Court.
Mr Booker submits that Ms Radha’s unreasonable conduct consists of putting ING Investment to the expense of defending proceedings which disclose no reasonable cause of action. He also submits that there has been an abuse of process in continuing proceedings in this Court simply to pressure ING Investment. Mr Booker claims that his client has incurred costs in excess of the usual amount expected in matters of this nature.
Mr Booker contends that ING Investment is of the view that it is entitled to seek summary dismissal of these proceedings. He asserts that this is because Ms Radha’s claim has no merit. Further, that if I did not order costs against Ms Radha on an indemnity basis, Mr Booker requests an order against her solicitor, Mr Abraham, pursuant to r.21.07(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). This is on the basis that Mr Abraham caused ING Investment to incur costs as a result of his negligence in failing to advise his client that the claim she pursued in this Court had no reasonable grounds of success.
In support, Mr Booker relies on s.347 of the Legal Professional Act 2004 (NSW) which requires a practitioner appearing in this Court to file a certificate stating that the claim has reasonable prospects of success. Mr Booker states that his firm has no record of such a certificate from Mr Abraham despite putting him on notice of his obligation to do so shortly after he filed the application. Mr Booker relies on his second affidavit sworn.

Ms Radha’s submissions

Ms Tibbey opposes the costs application on two grounds. First, that the Federal Magistrates Court’s accrued jurisdiction in respect of industrial matters would allow amendments to the application. Secondly, that from the first Court date it was clear that the applicant was seeking to have the matter stood over until the outcome of the AIRC proceedings. To that end and to save costs, Ms Radha’s solicitors offered to mention the appearance of the other side.
Ms Tibbey also referred to an article that appears on the Federal Magistrates Court website – Industrial Law section by Mr Ingmar Taylor, barrister, for a Combined Community Legal Centres Group Seminar held on 20 November 2006. The article refers to the associated jurisdiction of the Court:
7. The Federal Magistrates Court also has jurisdiction in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked: s 18 of the Federal Magistrates Act 1999. Accordingly, employees will be able to bring breach of contract claims (eg claiming payment in lieu of notice on termination) that are associated with claims of underpayment under industrial instruments or arising from the termination of their employment. Similarly, employers seeking to enforce orders of the Australian Industrial Relations Commission to prevent industrial action could also claim tortious damages.
Section 18 of the Federal Magistrates Act1999 (Cth) states:
18. To the extent that the Constitution permits, jurisdiction is conferred on the Federal Magistrates Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Magistrates Court is invoked.
Ms Tibbey had stated at the first Court date that it was the applicant’s intention to seek leave to amend her application. The jurisdiction of the Federal Magistrates Court does include associated jurisdiction pursuant to s.18 of the Federal Magistrates Act. However, I note that the associated jurisdiction is only properly invoked if the proposed amendments arise within a federal matter: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572.
Justices Gummow and Hayne considered the circumstances in which associated jurisdiction may operate in Re Wakim; ex parte McNally (1999) 198 CLR 511. Their Honours stated at [585]:
What is a single controversy `depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct in relationships'. There is but a single matter if different claims arise out of `common transactions and facts' or a `common substratum of facts', notwithstanding that the facts upon which the claims depend `do not wholly coincide'. So, too, there is but one matter where different claims are so related that the determination of one is essential to the determination of the other, as, for example, in the case of third party proceedings or where there are alternative claims for the same damage and the determination of one will either render the other otiose or necessitate its determination. Conversely, claims which are `completely disparate', `completely separate and distinct' or `distinct and unrelated' are not part of the same matter.
Often, the conclusion that, if proceedings were tried in different Courts, there could be conflicting findings made on one or more issues common to the two proceedings will indicate that there is a single matter. By contrast, if the several proceedings could not have been joined in one proceeding, it is difficult to see that they could be said to constitute a single matter.
This provision of the Federal Magistrates Act would provide Ms Radha with the opportunity to seek leave to amend the original application although no submissions have been made about the nature of these amendments. In the circumstances, I am willing to accept that leave would have been sought to amend the application if the matter had proceeded.
The proceedings before the AIRC claimed that Ms Radha’s termination was harsh, unjust and unreasonable. That matter was heard by Commissioner Redmond over two days and Ms Radha argued that the so-called restructure of the company was a sham. Argument was put that there had been no notice of any restructure in contravention of ING Investment’s policies. It was also argued that the company’s policies clearly set out the procedures for restructure, including that employees would be able to apply for new positions within the group and that the job descriptions would be published.
Ms Tibbey submits that no written evidence was produced by ING Investment that any person more senior than the applicant was made redundant, nor were other staff notified of a restructure. The applicant was the only person whose employment was suddenly terminated. Commissioner Redmond did not accept that there had been a sham and accepted that there had been a genuine operational reason for the termination.

Ms Tibbey submits that Ms Radha had engaged solicitors and expended a great deal of money in the preparation of the AIRC claim and, after having lost in the AIRC, elected not to continue the action in this Court. Ms Radha therefore terminated these proceedings as soon as possible by formally filing a notice of discontinuance.

Consideration

An employee has the right to file an application in this Court under s.663(1) and (2) of the Act following the termination of their employment if it is alleged to have involved a contravention of s.659, s.660 or s.661 of the Act. In this matter, the relevant provision is s.659(2)(e):
(2) Except as provided by subsection (3) or (4), an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
(e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;
The Court’s jurisdiction when dealing with a claim of contravention of s.659 is subject to s.663(5) which states:
(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.
A certificate under s.650(2) of the Act is required from the AIRC to invoke this Court’s jurisdiction. A s.650 certificate was issued by Commissioner Redmond on 12 February 2007.
Part 12, Division 4, Subdivision B of the Act allows applications to be made to the AIRC under s.643 for “unfair dismissal”, under s.659, s.660 or s.661 for “unlawful termination” or a combination of the two. All of these applications are required to go to conciliation before being brought to this Court.
The election to pursue unfair dismissal or unlawful termination in the original application to the AIRC is significant in relation to whether the applicant can subsequently pursue remedies in this Court. An applicant is entitled to elect to proceed to arbitration in the AIRC but has no right to pursue a remedy in this Court if only unfair dismissal has been alleged. However, if the original application includes a claim of unlawful termination, then the applicant can proceed to arbitration in the AIRC or apply to this Court under s.663.
A certificate as prescribed in s.663(5)(a) is a precondition to this Court’s jurisdiction. That subsection also limits the Court in that the certificate under s.650(2) must include a ground of unlawful termination. In this matter, a certificate issued by Commissioner Redmond was tendered and I am satisfied that this requirement has been satisfied.
The application in this Court was filed on 8 March 2007 together with the affidavit of Mr Abraham which sets out Ms Radha’s employment history and the alleged circumstances leading to termination of her employment. On 23 March 2007, ING Investment filed an interim application supported by the first affidavit of Mr Booker seeking interim orders in respect of the following be determined before the substantive issues:
(a) jurisdictional objection; and
(b) application for a costs order against the applicant in the substantive proceedings.
These were sought on the basis that there was a clear jurisdictional hurdle to Ms Radha’s application and that it would prejudice ING Investment to hear the substantive matter in advance of the jurisdictional objection being resolved.
Subsequent directions were held on 25 May 2007 and 6 September 2007. Directions listed for 5 July 2007 were vacated.
Section 666 of the Act deals with costs:
Costs
(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.
Section 666 is a costs precluding provision of the legislation which limits the award of costs in a “matter arising under the Act”.
In Ross, Re; Ex parte Crozier [2001] FCA 1665 at [5] per Gray, Branson & Kenny JJ:
5 The Full Court of this Court considered much the same issue in Re Ross; Ex parte Australian Liquor, Hospitality and Miscellaneous Workers Union [2001] FCA 770. It said at [74]:
Although it has succeeded in its application, the Union is not entitled to an order for its costs of the proceeding if [s 347] is applicable. This proceeding was instituted in the High Court. The Union sought prohibition, certiorari and mandamus. In such cases, the test for determining whether a proceeding is in a matter arising under the ... Act for the purposes of s 347 is whether the right or the duty that is sought to be enforced owes its existence to a provision of the ... Act. [Emphasis added]
This test derives from a number of judgments of the High Court of Australia: see, e.g., Re Polites; Ex parte Hoyts Corporation Pty Ltd [1991] HCA 31; (1991) 173 CLR 78 at 93; LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31; (1983) 151 CLR 575 at 581; and R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; (1945) 70 CLR 141 at 154.
Crozier suggests that an applicant who has the benefit of a provision such as s.666 of the Act “will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances”. The Court stated at [11]:
11 After referring to the observations of Gibbs J in R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470 cited Northrop J in Heidt, the Full Court of this Court said in Thompson v Hodder [1989] FCA 493; (1989) 21 FCR 467 at 470:
It is apparent from these authorities that an applicant who has the benefit of the protection of s 347 will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances.
See also Hatchett v Bowater Tutt Industries Pty Ltd (No 2) [1991] FCA 188; (1991) 28 FCR 324 at 325 per von Doussa J.
The first question to determine is whether the proceedings were instituted vexatiously or without reasonable cause. Ms Tibbey submits that Ms Radha had successfully applied for a Portfolio Performance Analyst position in early 1999 with ING Investment, a large group of companies with a presence in many countries. At the time she was made redundant, Ms Radha had worked for the organisation for about 11 years and appears to have performed well. She was promoted fairly rapidly and had regularly received positive performance appraisals. She received a salary with conditions reflective of her seniority as Assistant Portfolio Manager of International Equities.
When a new Director of International Equities was appointed, there was a disagreement which led to hostility between him and Ms Radha. Ms Radha lodged a complaint with the Human Resources department about the behaviour of the Director. She complained that she was excluded during meetings and the Director was openly hostile and refused to discuss work matters with her.
On 21 November 2006, the applicant was advised by her superior and the Human Resources department that her team had been restructured and she had been made redundant. She was escorted to her desk, made to take her belongings and then escorted off the premises.
Ms Radha initially retained Turner Freeman Lawyers and filed and application with the AIRC within the statutory time limits. A AIRC conciliation conference was held and a s.650 certificate was subsequently issued. Ms Radha then filed an application in this Court seeking a declaration that her dismissal contravened s.659 of the Act. The issue to be determined is whether the proceedings were instituted vexatiously or without reasonable cause. In Re Ruth Margaret Geneff v F.E. Peterson & Others [1986] FCA 432 at [134], Gray J observed that the word “vexatious” is often found in Court rules together with expressions such as “frivoulous” and “an abuse of process of the Court”. However, the authorities do not normally distinguish between these expressions: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 per Dixon J; General Steels Industries Inc v Commission of Railways(NSW) (1964) 112 CLR 125 at [128]-[130] per Barwick CJ. The test used to determine whether proceedings were instituted vexatiously or without reasonable cause was in s.197A of the now repealed Conciliation and Arbitration Act1904 (Cth), which was often applied at the conclusion of proceedings when a Court comes to consider the question of costs.
The authorities indicate that the focus of that section is on the institution of proceedings and that a Court should not allow itself to be influenced unduly by the actual result. In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257, Northrop J sitting in the Australian Industrial Court considered the section and said:
Great care must be exercised to ensure that in finding that a party has instituted proceedings vexatiously or without reasonable cause, that the 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. The test is not subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct of the opposing parties 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 parties both prior and subsequent to the instituting 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 facts adverse to the party instituting the proceedings.
Caution in applying the test is also referred to in R v Moore; ex parte Federated Miscellaneous Workers Unionof Australia (1978) 140 CLR 470 per Gibbs J:
In my opinion a party cannot be said to have commenced a proceeding “without reasonable cause”, within the meaning of that section, simply because his argument proves unsuccessful.
This Court has only limited material before it which includes the conciliation certificate issued by Commissioner Redmond on 12 February 2007. The certificate shows that the conciliation was unsuccessful and states:
Based on the material before me and the broad differences between the parties as to the facts of the case, I am unable to give any indication as to the merits of this case.
Although I made orders for the filing of further material and the conduct of the hearing, this was not satisfied prior to the notice of discontinuance. Further as indicated above, Ms Tibbey submitted that leave would be sought to amend the application as addressed in Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120.
It is apparent that errors were made in respect of the original application filed on behalf of Ms Radha. However, there is no evidence before the Court to explain why the initial application to the AIRC was limited to a s.659 claim, nor have the circumstances surrounding the change of solicitors and the new solicitors’ attempt to pursue additional grounds before the AIRC after the conciliation certificate been properly explained. Despite this and from the material before the Court, I am satisfied that Ms Radha had a genuine grievance with respect to her termination of employment. I am guided by Commissioner Redmond’s comment that he was unable to give any indication as to the merits of this case.
There is nothing before me to indicate that if Ms Radha’s case had been properly prepared and argued, her position would be hopeless or completely void of any prospects of success. I am not satisfied that Ms Radha instituted these proceedings vexatiously or without reasonable cause. The reason that the attempt to file an amendment to the original application or plead a new ground was unsuccessful was due to jurisdictional issues mentioned briefly in Mr Booker’s submissions. This should not be an indication of a possible failure of the s.659 proceedings in this Court. The authorities cited above establish that a costs application should not be directly influenced simply because an argument proves unsuccessful.
The second issue to determine is whether the actions of Ms Radha and her representative caused costs to be incurred by ING Investment and its representative because of unreasonable acts or omissions in connection with the conduct of the proceeding. I refer to the affidavit of Mr Pricaud which indicates that at a meeting with Mr Booker on 22 June 2007, a discussion took place in the following terms:
3. During our conversation Mr Steven Brooker pointed out that there was a matter currently in the Federal Magistrates Court that was listed for mention on the 5 July 2007.
4. I pointed out that I was not familiar with the current proceedings in the Federal Magistrates Court but that we would seek an adjournment until the Australian Industrial Relations Commission had the opportunity to hear the matter on jurisdiction.
5. Mr Steven Booker indicated that he would seek instructions from his client.
6. I pointed out that our office was prepared to appear by consent and mention the appearance of the respondent, when seeking the adjournment at the mention, at the Federal Magistrates Court.
7. On or about 25 June 2007 I faxed a letter to Mr Steven Booker at Fisher Cartwright Berriman to confirm delivery of our client’s affidavit and submissions. In the same fax, I offered to mention the appearance of the respondent at the Federal Magistrates Court. Annexed to this affidavit and marked with the letter “A” is a copy of the fax.
8. Our records do not show that we have received any confirmation from Mr Steven Booker for our office to mention their appearance at the Federal Magistrates Court.
9. On the 26 June 2007 I emailed Mr Steven Booker a copy of a letter to be sent with his consent to the Federal Magistrates Court to have the mention vacated and relisted at a later date. Annexed to this affidavit and marked with the letter “B” and “C” respectively are copies of the email and letter.
10. On the 26 June Mr Booker replied to our email dated 26 June 2006 consenting to have the mention vacated. Annexed to this affidavit and marked with the letter “D”.
11. On 22 May 2007, our office faxed a letter to Mr Steven Booker at Fisher Cartwright Berriman to offer to mention the appearance of the respondent at the Federal Magistrates Court to minimise costs. Annexed to this affidavit and marked with the letter “E”.
12. On the 23 May 2007 Mr Steven Booker responded to our letter dated 22 May 2007 disagreeing that the matter be mentioned on their behalf. Annexed to this affidavit and marked with the letter “F”.
13. On 05 September 2007 our office faxed a letter to Mr Steven Booker at Fisher Cartwright Berriman. Annexed to this affidavit and marked with the letter “G”.
14. Our office does not show any record of a reply to our letter dated 5 September 2007.
Mr Booker submits that from the time of the first Court date, the respondent sought to have the matter summarily dismissed. However, at the first Court date I indicated that I would adjourn the matter for one month to allow the AIRC proceedings to be resolved prior to formulating a timetable in this matter. It is up to the individual parties to determine what applications they wish to make to this Court in respect of that process. I am satisfied that Ms Radha’s representative made appropriate offers to appear by consent and mention the appearance of ING Investment when subsequent adjournments were sought. As soon as the AIRC matter was determined and Ms Radha had decided or was in the process of deciding whether to further pursue this matter, the next hearing date was vacated.
In the circumstances, I am satisfied that Ms Radha and her representative had acted in an appropriate manner and did not cause ING Investment to incur unnecessary expense by appearing for directions when it was Ms Radha’s intention to seek a further adjournment to enable the AIRC processes to be complete. As the overriding intention of s.666 of the Act is a cost precluding provision which limits the award of costs, an applicant “will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances”: Crozier at [11]. I am satisfied that the exceptional circumstances as stipulated in the Act do not arise in this matter. Consequently, the application for costs is dismissed.

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM

Associate:

Date: 1 February 2008