Shackley v The Australian Croation Club Ltd
[1997] IRCA 134
•24 April 1996
DECISION NO:134/97
CATCHWORDS
INDUSTRIAL LAW - Costs in application for review - Matter remitted by Full Court to single Judge - Whether review instituted vexatiously or without reasonable cause
Workplace Relations Act 1996
Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233
Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257
Wyndham Lodge Nursing Home Inc v Reader (no 2) (1996) 65 IR 253
Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council (1995) 58 IR 275
Imogen Pty Ltd v Anthony Sangwin (unreported, Full Court, Industrial Relations Court of Australia, 20 December 1996)
NO. AI 1012 of 1996
SHACKLEY v THE AUSTRALIAN CROATIAN CLUB LTD
MOORE J
CANBERRA
24 APRIL 1997
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI 1012 of 1996
)
ACT DISTRICT REGISTRY )
BETWEEN: JANICE SHACKLEY
Applicant
AND: THE AUSTRALIAN CROATIAN CLUB LTD
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 24 April 1997
ORDER OF THE COURT
THE COURT ORDERS THAT:
The application for costs is dismissed.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI 1012 of 1996 )
ACT DISTRICT REGISTRY )
BETWEEN: JANICE SHACKLEY
Applicant
AND: THE AUSTRALIAN CROATIAN CLUB LTD
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 24 April 1997
REASONS FOR JUDGMENT
This judgment deals with costs in an application for review brought by the Australian Croatian Club Ltd ("the Club") under s 377 of what is now entitled the Workplace Relations Act 1996 (Cth) ("the Act"). The matter has been remitted by an order of 17 December 1996 of a Full Court which decided the application for review was a proceeding in a matter: see (1996) 141 ALR 736. Wilcox CJ, with whose reasons von Doussa J agreed, made it plain that in determining whether costs might be awarded, I should determine whether the application for review was instituted vexatiously or without reasonable cause. The application for review arose from a judgment of a Judicial Registrar of 27 February 1995.
In order to deal with the threshold question of whether, for the purposes of s 347 of the Act, the application for review was brought vexatiously or without reasonable cause, it is necessary to recount something of the matter's history. Ms Janice Shackley was engaged as a secretary-manager of the Club in January 1994. Her employment was terminated in May 1994 giving rise to an application under s 170EA of the Act. The Judicial Registrar heard that application and determined that the termination of Ms Shackley's employment by the Club has been in contravention of the Act though, in the orders she made, the Judicial Registrar did not specify which provisions had been contravened. However in the Judicial Registrar's reasons, contravention of two sections only were discussed, namely ss 170DF(1)(f) and 170DC. No mention was made of s 170DE(1) in her reasons and nothing was said that suggested a finding had been made that this section had been contravened. The finding that s 170DF(1)(f) had been contravened was based on the acceptance by the Judicial Registrar of evidence of Ms Shackley that she was told by the President of the Club, Mr Bajic, that the real reason for her dismissal was that she was not a person of Croatian descent. Mr Bajic denied the conversation. The Judicial Registrar said: "There is a direct clash between the two main witnesses as to the terms of the conversation".
The Judicial Registrar explained in her reasons why she preferred the evidence of Ms Shackley. She said it was based on a weighing of the evidence in relation to the particular conversation, the overall demeanour of both the witnesses, the details with which they gave their evidence and the surrounding circumstances of the employment. The last mentioned matter appears to have been a reference to Ms Shackley's probationary employment, the terms of a reference she was given, a request that she return to employment with the Club after the termination of her employment and the replacement of Ms Shackley by another employee of Croatian descent the following day. The Judicial Registrar's conclusion was expressed in the following terms:
"The respondent faces breaches of two sections of the act on the evidence, as I find it. The first of those sections is section 170DC, which requires the employer not to terminate any employee's employment for reasons related to conduct or performance, unless the employee has been given the opportunity to defend herself against the allegations made. There was some attempt in the evidence put for the respondent, to show that that section had been complied.
The comments made by Wilcox CJ of this Court in Nicolson v Heaven and Earth Gallery Pty Limited (1994) 126 ALR 233 leave no doubt, in my view, that the evidence in this case falls short of the standard required by Section 170DC, and I find the respondent in breach of that Section.
I also find that the respondent is in breach of 170DF(f)(sic), in that I find that the employer terminated the employment for a reason relating to race. I make that finding with some hesitation as I appreciate the consequences which will flow in that finding for the respondent. Nevertheless, having found that I accept the applicant's evidence as to the termination conversation, and being met with a denial of her version of the conversation by the witness for the respondent, it flows from those findings that there is a breach of 170DF(f)(sic)."
Three things emerge from the Judicial Registrar’s reasons for judgment which, in my opinion, are material in considering the operation of s 347. The first is that the critical question of whether there had been a contravention of s 170DF(1)(f) depended upon which account of a conversation was accepted. The second is that the Judicial Registrar recognised, in my view correctly, that a finding that a club representing a group from a particular ethnic background had terminated an employee because she was not of the background, was a serious matter that might impact significantly on the club's reputation and standing in the broader community.
The third is that the consideration of what compensation should be awarded appears to have been based on the contravention of s 170DF(1)(f) only. There was no reference to the special considerations arising if contravention of s 170DC is established, namely what might have been the result if Ms Shackley had been afforded the procedural fairness required by that section: see Nicolson v Heaven and Earth Gallery Pty Ltd (1994) 126 ALR 233 at 246-247. This is understandable. There was, as earlier noted, no consideration of whether, having regard to the conduct of Ms Shackley, there was a valid reason for her termination: see s 170DE(1). The finding of a contravention of s 170DC really added nothing of substance to the assessment of compensation in the face of a finding of contravention of s 170DF(1)(f).
It was against this background that the review was sought. As it transpired, I found a contravention of s 170DE(1) as submitted by counsel for Ms Shackley, as well as contravention of ss 170DF(1)(f) and 170DC. I also accepted the evidence of Ms Shackley as to what was said in the conversation between her and Mr Bajic. My acceptance of her evidence was, unlike the Judicial Registrar’s, in part influenced by evidence given by Ms Shackley's boyfriend about a conversation he had with her shortly after the termination.
However the question posed by s 347 is whether the proceeding, in this case the application for review, was instituted vexatiously or without reasonable cause. The word "instituted" in s 347 directs attention to the time at which the application for review was lodged: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264. Can it therefore be said that the application for review was instituted either vexatiously or without reasonable cause?
It is to be remembered that the finding of contravention of s 170DF(1)(f) depended upon the acceptance of the evidence of one witness and the rejection of another based, in part, on their overall demeanour and the detail with which they gave their evidence. It is also to be borne in mind the nature of a review. It was discussed by a Full Court in Wyndham Lodge Nursing Home Inc v Reader (No 2) (1996) 65 IR 253. The Full Court said, at 258:
"Because the possible attitude of parties spans a wide spectrum, so does the significance on review of the judicial registrar's findings of fact. If all the evidence is tendered anew, the judicial registrar's findings of fact will be of no assistance. The evidence being different, the judge will ignore the judicial registrar's findings and to make his or her own findings on the basis of the evidence adduced on the review. On the other hand, to the extent that the parties agree to accept the judicial registrar's findings of fact, the judicial registrar's statement of findings will be the foundation upon which the review is argued.
Where contested ultimate findings of fact depend on what conclusions ought to be drawn from primary facts that are uncontested at the review stage, the judge conducting the review is as well able to make those findings as was the judicial registrar. In such a case, no difficulty arises from the fact that the judge is considering the case "on the papers", without seeing and hearing the witnesses. The task involves an analysis of the primary facts and the exercise of a judgment. However, where there is a dispute as to primary facts, it will usually be impossible for the judge to resolve it "on the papers". Determination of a dispute about primary facts involves choosing between conflicting elements of the evidence. This almost always involves an assessment of the witnesses, not only as to their truthfulness but also as their characters and personalities and the likelihood that they acted in a particular way. Without seeing and hearing the witnesses, a judge has no basis for substituting his or her opinion on such matters for that of the judicial registrar. The judge will be bound to hold that the party who bears the onus of proof on the disputed issue has failed to discharge that onus. It is important that parties understand this in determining how they wish a review to be conducted."
The statutory right to seek the review of a determination of a Judicial Registrar by a Judge is a fundamental one underpinning the legislative scheme authorising the delegation of judicial power. In a passage from Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council (1995) 58 IR 275, quoted with approval by the Full Court in Reader (supra), the following was said at 283:
"However, it is plain from Harris and Brandy that the maintenance of the integrity of the separation of powers arising from the application of the provisions of Ch III of the Constitution, requires s 377 to be construed so as to treat the review as a hearing de novo. In such a hearing the parties are not bound to or limited by the evidence before the Judicial Registrar and may adduce evidence that was not put to the Judicial Registrar because either a party neglected to call it or it concerns events occurring after the hearing. The judge must decide the matter by reference to evidence led in the review and independently of the decision of Judicial Registrar."
The word “vexatious” would rarely, if ever, be an apt description of an application for review when the original proceeding was a genuine contest on issues of law and fact, or fact alone. The right to seek a review, as earlier discussed, derives indirectly from the Constitution and, in my opinion, it would generally be entirely incompatible with the right conferred by s 377 to stigmatise its exercise as vexatious. It is a right of a special character that has been conferred to ensure the validity of a legislative scheme authorising the delegation of the exercise of judicial power. In the present case, the exercise of the right to seek a review was not vexatious.
This leads to a consideration of whether the application for review was made without reasonable cause. While the Judicial Registrar expressed a preference for the evidence of Ms Shackley, she did not describe the evidence of Mr Bajic in language that suggested that he was an unmitigated liar. The acceptance of the evidence of Ms Shackley by the Judicial Registrar had involved a scrutiny of the evidence as a whole and balancing various considerations against the denial of Mr Bajic that he had said the termination was because Ms Shackley was not Croatian.
In relation to an appeal, Wilcox CJ posits the following test as to whether it was brought without reasonable cause in Imogen Pty Ltd v Anthony Sangwin (unreported, Full Court, Industrial Relations Court of Australia, 20 December 1996):
"Only minor modifications of that test are necessary to cover the situation of an appeal. The question would be whether, having regard to the arguments available to the appellant at the time of instituting the appeal, there was no substantial prospect of success. The prospect must be evaluated in the light of the facts of the case, the judgment appealed from the points taken in the notice of appeal. If, having regard to those matters, there was a not insubstantial prospect of the appeal achieving some success, albeit not necessarily complete success, then it seems to me it cannot fairly be described as having been instituted "without reasonable cause". This is so even if, in the result, the appeal proved unsuccessful.
A fortiori, these remarks apply, as a minimum standard, to an application for review having regard to the character of such an application.
In my opinion, the Club, when applying for a review, was entitled to proceed on the basis that the Judge hearing the review might not take the same view about the evidence of Mr Bajic and Ms Shackley. Indeed the evidence upon which the review would be decided, in the absence of agreement to hear the review by reference to the evidence called before the Judicial Registrar, would be different evidence in the sense that the evidence would be given afresh. Real and material differences could emerge in the details of the evidence given and the manner in which it was given. My approach to the evaluation of the oral evidence differed from the of the Judicial Registrar and was, in part, based on submissions made by the Club in the review. That such submissions could be made and might, in part, bear fruit, would have been a matter that the Club was entitled to act upon when deciding to institute the review proceeding. In my opinion, there was not an insubstantial prospect of the Club persuading a Judge that the facts were otherwise than as found by the Judicial Registrar.
As to the contravention of s 170DC that the Judicial Registrar found, I accept that at the time the review proceeding was instituted, there was no real prospect that the Club would succeed in establishing in the review there had been no contravention of s 170DC if the matter was approached in the review in the way it had been by the Judicial Registrar. As it turned out, it was decided in the same way. However it must be said, and this is not a matter adverted to in my judgment nor that of the Judicial Registrar, nor was it the subject of submissions in the review, that if the only operative reason why Ms Shackley had been dismissed was the reason identified in s 170DF(1)(f), then s 170DC would have had no application as the termination would not have been for a reason related to the employee's conduct or performance. Section 170DC only applies in those circumstances.
Nonetheless, submissions and findings were made about contravention of s 170DC. But contravention of S 170DC was very much a subsidiary issue. As earlier discussed, the compensation awarded by the Judicial Registrar either entirely or in substantial part flowed from contravention of s 170DF(1)(f) and not s 170DC. Moreover, the issue that concerned the Club, and this it made plain, was the finding of a contravention of s 170DF(1)(f). It was, in my opinion, entitled to have the finding of contravention of that section reviewed. The judgment of the Judicial Registrar depended on findings of fact that would not inevitably or even highly probably be made again by the Judge hearing the review. Accordingly the application for review cannot be characterised as having been instituted without reasonable cause.
Section 347 precludes any award of costs. I dismiss the application for costs.
I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.
Associate:
Alexandra George
Date: 24 April 1997
APPEARANCES
Counsel for the Applicant: Mr Sheils
Solicitor for the Applicant: Messrs Scott Sheils & Glover
Counsel for the Respondent: Mr B Collaery
Solicitor for the Respondent: Bernard Collaery & Associates
Date of Hearing: 28 February 1997
Date of Judgment: 24 April 1997
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