Saddington, J.A. v Oliver, B

[1993] FCA 592

JOHN ALLAN SADDINGTON v. BILL OLIVER and OTHERS
No. VI30 of 1993
FED No. 592
Number of pages - 4
Industrial Law
(1993) 43 FCR 545
(1993) 121 ALR 601

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
INDUSTRIAL DIVISION
GRAY J

CATCHWORDS

Industrial law - organisation - rules - performance and observance - discontinuance of proceeding - costs - whether interim application a separate proceeding - whether proceeding instituted 'vexatiously or without reasonable cause' - whether more than one proceeding.

Words and phrases

'proceeding'

'vexatiously or without reasonable cause'.

Industrial Relations Act s. 347

Federal Court of Australia Act s. 4.

Geneff v. Peterson (1986) 19 IR 40.

Kanan v. Australian Postal and Telecommunications Union (1992) 43 IR 257.

Thompson v. Hodder (1989) 21 FCR 467.

HEARING

MELBOURNE, 2 August 1993

#DATE 2:8:1993

Solicitors for the Applicant: Gill, Kane and Brophy

Counsel for the Applicant: Mr. Perica

Solicitors for the Respondents: Holding Redlich

Counsel for the Respondents: Mr. Boronstein

JUDGE1

GRAY J On 5th May 1993, Ryan J granted a rule to show cause which commenced this proceeding. By that rule to show cause, the applicant sought orders that the respondents perform and observe the rules of the Construction, Forestry, Mining and Energy Union by:

(a) refraining from using the staff, funds or resources of the

Union or the Building Unions Division, Victorian Divisional Branch of the Union for the purpose of assisting or promoting certain candidates in the election currently being held in the Building Unions Division, Victorian Divisional Branch to the exclusion of other candidates;

(b) refraining from authorising, producing or distributing any

leaflet bearing the official logo of the Union or the official logo of one of the Union's predecessor organisations, the Building Workers Industrial Union of Australia, for the purpose of assisting or promoting certain candidates in the election currently being held in the Building Unions Division, Victorian Divisional Branch, to the exclusion of other candidates.

At the same time his Honour granted an interim order, substantially in the same terms as the rule to show cause, restraining the respondents from various activities, until 4.00 p.m. on 7th May 1993, or further order.

1. On 7th May 1993, the matter came before me for directions and for consideration whether the interim order granted by his Honour should continue in operation. After hearing evidence in the form of affidavits and submissions of counsel for the applicant and the respondents, I discharged the interim order made on 5th May 1993 and dismissed the application for interim orders. I pronounced reasons for judgment on that occasion, to which I do not need to refer in detail.

2. The matter has come on for further directions today. The applicant desires to discontinue the proceeding and the respondents are content to have the rule to show cause discharged today. The respondents have applied for an order that the applicant pay their costs of the proceeding. Alternatively, they have applied for an order that the applicant pay their costs of the application for interim orders.

3. Section 347 of the Industrial Relations Act 1988 provides, so far as is relevant:-
   

"A party to a proceeding .... 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."

Counsel for the respondents has argued that the rejection of the application for interim orders, and the material which was advanced in support of the interim orders, indicates that the proceeding was instituted vexatiously or without reasonable cause.

1. The first issue that arises is whether the application for interim orders can be regarded as a separate "proceeding" for the purposes of s. 347(1). In s. 4(1) of the Federal Court of Australia Act 1976, there is a specific definition of the word "proceeding", by which an application for interim or interlocutory orders is regarded as a proceeding. That definition, however, is not applicable directly to the terms of the Industrial Relations Act 1988. In my view, the intention of parliament in s. 347 of the latter Act is not to import a distinction between a procedural application and a substantive application and to label each of them as a proceeding. In my view it is clear from the terms of s. 347(1) that the word "proceeding" means the substantive proceeding in which other interlocutory applications may arise. Costs may, therefore, only be ordered in respect of the rule to show cause and all interlocutory proceedings brought under it if the rule to show cause was instituted vexatiously or without reasonable cause.

2. No issue arises on the question whether the rule to show cause was in a matter arising under the Industrial Relations Act 1988.

3. It should be noted that, upon the initial application being made to Ryan J, he was persuaded that he should grant not only a rule to show cause, but also an interim order without notice to the respondent. Such an ex parte interim order is a drastic remedy. The fact that a rule to show cause has been granted is not conclusive that a proceeding was brought with reasonable cause. See Geneff v. Peterson (1986) 19 IR 40 at p 89. It must, however, be a matter of considerable weight that a judge has taken the view that the applicant had a sufficient claim to found not only the institution of the proceeding, but also an order of a drastic nature, restraining the conduct of the respondents without any notice being given to them.

4. Counsel for the respondents has suggested that the application in paragraph (b) of the rule to show cause was doomed to failure because it involved the selection of the wrong respondents, and the failure to refer to any rule justifying the orders which were sought against them. I note that when I dismissed the application for interim orders, I was invited to discharge paragraph (b) of the rule to show cause. I then declined to do so, on the basis that the applicant ought to be allowed such opportunity as he might avail himself of to seek to amend the rule to show cause by adding parties, or otherwise, and to make his case good if he were able to do so. That reasoning suggests to me that I regarded it as possible that the applicant had a legitimate complaint which could have been pursued with the addition of some other parties.

5. Counsel for the respondents criticises the applicant for not having taken advantage of the possibility offered to pursue the claim in an amended form. It must be realised, however, that the claim was brought in the context of an election which was then in the process of being conducted, and, unless swift action were taken, it was unlikely that the applicant would desire to proceed with the matter. Perhaps it is possible to criticise the applicant for not having taken swift action, but, his failure to do so does not indicate to me that the proceeding lacked reasonable cause in its institution. Certainly, errors were made in the course taken, but the possibility remains that the applicant had a legitimate complaint which he might have pursued successfully.

6. The claim in paragraph (a) of the rule to show cause, is brought only against one of the respondents, Mr. Noonan. It depends entirely on a disputed question of fact. It is true that, on the evidence before me in the application for interim orders, such orders were not justified because of the state of the evidence. That is not to say that the evidence would have remained in that state had the matter proceeded to trial.

7. In a case involving disputed questions of fact, it is simply not possible to determine whether the proceeding was instituted vexatiously or without reasonable cause unless the matter is tried. I was referred to what Wilcox J said in Kanan v. Australian Postal and Telecommunications Union (1992) 43 IR 257 at pp 264 to 265. His Honour there said:-
   

"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."

In that case, his Honour was speaking in the context of a motion for summary dismissal of the proceeding. It is clear from the judgment that the respective contentions of fact of both sides were before the Court on the hearing of that motion. In the present case that is far from clear.

1. It is not apparent to me that the applicant would necessarily have been unable to advance the claim against Mr. Noonan factually to a greater degree than it is advanced in the affidavit that was before me on 7th May 1993. I was critical then of the lack of evidence of the circumstances of the incident referred to in the relevant passage in the affidavit. It may well have been the case, had the matter proceeded, that the applicant would have been able to give evidence of circumstances which would have persuaded me to accept his version. It may even have been the case that Mr. Noonan would have given evidence, or would have been interrogated, and might have admitted to the substance of the facts alleged against him. All of these questions are matters of speculation. As I have said, it is not possible to determine that the claim against Mr. Noonan was vexatious or without reasonable cause unless its correctness is determined in some way. This is not a case in which there is necessarily an absence of evidence about some crucial element of a cause of action.

2. I am therefore of the view that it cannot be said that the application was made vexatiously or without reasonable cause in respect of either of the causes of action raised in the rule to show cause. Even if it were the case that it was so brought with respect to one of those causes of action, the application for costs would be bound to fail. It is clear that the proceeding cannot be split into two proceedings for the purposes of s. 347. See Geneff v. Peterson at p 90 and Thompson v. Hodder (1989) 21 FCR 467 at p 471.

3. I am therefore of the view that the respondent's application for the costs of the proceeding must be dismissed. The order I make is as follows:-
   

1. By consent, the rule to show cause is discharged.

2. The respondent's application for costs is dismissed.