Thomas Raymond Scott v Access Industries for the Disabled Limited
[1994] IRCA 157
•16 December 1994
CATCHWORDS
COSTS - application to set aside costs order - whether application for costs instituted vexatiously or without reasonable cause: Industrial Relations Act 1988(Cth): s 170EA; s 347
Industrial Relations Act 1988
Industrial Relations Act 1991 (NSW)
Commercial Travellers' (State) Award
Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257
Foxcroft v The Ink Group Pty Limited (unreported, Wilcox CJ, 14 October 1994)
Heidt v Chrysler Australia Limited (1976) 26 FCR 257
THOMAS RAYMOND SCOTT v ACCESS INDUSTRIES FOR THE DISABLED LIMITED
No. NI 284 of 1994
Beazley J
16 December 1994
Sydney
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
) No. NI 284 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:THOMAS RAYMOND SCOTT
Applicant
AND:ACCESS INDUSTRIES FOR THE DISABLED LIMITED
Respondent
CORAM:BEAZLEY J
PLACE: SYDNEY
DATE: 16 DECEMBER 1994
SHORT MINUTES OF ORDER
The Court orders that:
The order for costs made on 14 July 1994 be set aside.
The respondent to pay the applicant's costs of the application for costs contained in the notice of motion filed 7 July 1994.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE INDUSTRIAL RELATIONS COURT )
OF AUSTRALIA )
) No. NI 284 of 1994
NEW SOUTH WALES DISTRICT REGISTRY )
)
GENERAL DIVISION )
BETWEEN:THOMAS RAYMOND SCOTT
Applicant
AND:ACCESS INDUSTRIES FOR THE DISABLED LIMITED
Respondent
CORAM:BEAZLEY J
PLACE: SYDNEY
DATE: 16 DECEMBER 1994
REASONS FOR JUDGMENT
BEAZLEY J: On 20 May 1994, the applicant filed an application under section 170EA of the Industrial Relations Act 1988 (Cth) (the "Act") seeking a declaration that the termination of his employment with the respondent contravened Division 3 of Part VIA of the Act, reinstatement and compensation.
In compliance with Order 75 of the Industrial Relations Court Rules, the applicant's solicitor provided the following information in support of the application: that the applicant commenced employment with the respondent on 29 February 1988 as a sales manager; that his employment was terminated on 11 April 1994; that the reason given for termination was the applicant's failure:
"to agree to an ultimatum issued by a superior who sought the applicant's support in respect of certain organisational changes;
and that he was not employed under an award or enterprise agreement, but there was "some possibility" that the New South Wales Commercial Travellers' (State) Award may apply."
Between the date of filing the application and 14 July 1994, the matter was listed for directions on three occasions. It will be necessary to deal with the details of those directions hearings in due course.
On 7 July 1994, the respondent filed a notice of motion seeking a declaration that the application was vexatious and/or an abuse of process of the Court; an order that the action be stayed permanently; and an order that the applicant pay the respondent's costs of the notice of motion and the proceedings to date. The notice of motion was supported by an affidavit of John Roger, sworn 6 July 1994. Mr Roger is a partner in the firm of solicitors engaged by the respondent and had the care and conduct of the matter on its behalf.
The matter was listed before me for directions on 14 July 1994. On that occasion, the applicant filed a notice of discontinuance. Notwithstanding the filing of the notice of discontinuance, the respondent sought the order for costs claimed in the notice of motion. The affidavit of John Roger sworn 6 July 1994 was read in support of the application for costs. After hearing the submissions of the legal representatives for each party, I made an order for costs in the respondent's favour pursuant to s 347 of the Industrial Relations Act 1988. Section 347 provides:
"(1)A party to a proceeding (including an appeal) in a matter arising under this Act shall not be ordered to pay costs incurred by any other party to the proceedings unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.
(2)In subsection (1):
'Costs' includes all legal and professional costs and disbursements and expenses of witnesses."
Later that day, the applicant's solicitor made an ex parte application that I order that the order made as to costs not be entered until further order of the Court. The basis of the application was that all relevant matters had not been put before me at the time that I made the order for costs. I granted the application and ordered that the costs order made earlier that day not be entered until further order.
The matter now comes before me upon the applicant's application to set aside the costs order pursuant to O 35 r 7. The applicant also seeks an order for costs of the respondent's application for costs. As I am asked to vary or set aside the order made on 14 July 1994 on the basis that I was not provided with all relevant material, it is necessary to examine the evidence which was before me on that occasion, and the evidence which is now before me.
Evidence on original costs application
The affidavit of John Roger sworn 6 July 1994, which was read in support of the costs application stated:
"1.I am a partner in the firm of Connah, Steed & Co., and have the care and conduct of this matter on behalf of the Respondent.
By letter dated 9th May, 1994 from McNeil, James, Solicitors, the Respondent was advised that the Applicant had initiated a claim for relief relating to unfair dismissal under the Industrial Relations Act (NSW) 1991. Annexed hereto and marked with the letter "A" is a copy of this letter. (The application under the Industrial Relations Act was also annexed.)
On 16th May, 1994, the application under the Industrial Relations Act (NSW) 1991 was conciliated before Commissioner Harrison. I am informed and verily believe that Commissioner Harrison requested the Respondent and the Applicant to confer.
On 7th June, 1994, representatives of the Respondent and the Applicant conferred in Newcastle. I am instructed and verily believe that a verbal agreement was reached at that time in settlement of the Application under the Industrial Relations Act (NSW) 1991.
On 8th June, 1994, the Applicant [sic] under the Industrial Relations Act (NSW) 1991 was mentioned before Commissioner Harrison. I am instructed and verily believe that the Agreement reached between the Respondent and the Applicant was reported to Commissioner Harrison. Commissioner Harrison noted the private agreement and gave 14 days for the parties to finalise such matters and notify the Industrial Relations Commission (NSW).
It is respectfully requested that the Court grant the orders sought in the Notice of Motion on the grounds that the proceedings are vexatious and/or an abuse of the process of the Court because the Applicant is bringing an action in the Industrial Relations Commission (NSW) against the same parties seeking the same relief in respect of the same factual circumstances."
During the course of his submissions in support of the application for costs, counsel for the respondent stated that when the matter was before the Registrar on 7 July 1994, the solicitor for the applicant had sought to have the matter referred to conciliation. After having an opportunity to obtain instructions, the solicitor appearing for the applicant on 14 July 1994 did not contest that matter.
Counsel for the respondent handed up written submissions in support of the application for costs. Those written submissions were as follows:
"1.Notwithstanding the filing of Notice of Discontinuance, the Respondent may make application for an order for payment of costs pursuant to section 347 of the Act (see Order 22, Rule 3).
Having regard to the factual basis set out in the affidavit of John Roger dated 7 July 1994, the Respondent makes application for costs on the basis that the Applicant initiated the proceedings vexatiously.
Where two actions are brought by the same person against the same person in different Courts or Tribunals and where the same remedies are sought it is prima facie vexatious to bring two actions where one will lie. Moore v Ingliss [sic] (1976) 9 ALR 509 at 515; and on appeal (1977) 51 ALJR 207.
The conduct of the Applicant indicates that both actions were being pursued. The action under section 246 of the Industrial Relations Act (NSW) was the subject of conciliation, negotiation and settlement offers. This application was sought to be referred to conciliation on 7 July 1994.
Other factors supporting the application are:
(a)the application under the New South Wales Industrial Relations Act and this application contains different factual assertions. In the application under the Industrial Relations Act (NSW) it was asserted that there was State Award coverage which is a pre condition of jurisdiction (see section 245(1)(a)). In this application it was asserted there was no award coverage merely the possibility of State Award coverage was noted;
(b)in the Application under the Industrial Relations Act (NSW) the Applicant did not sign the undertaking under section 245 not to proceed with other redress relating to the dismissal;
(c)The Applicant has instructed different solicitors in relation to each application."
In addition to the written submissions, Counsel for the respondent made the following oral submissions:
"Our submissions are simply these, that prima facie this has been, it is vexatious to bring the two concurrent actions.
"...perhaps it might not be unreasonable in the circumstances to initiate actions in both areas if there was some uncertainty but having said that it is certainly unreasonable then to proceed to have conciliation in one area and then to proceed to actively come up here and seek conciliation in the other area and it was the circumstances that arose last week when the matter was before the Registrar and it has been before the Registrar twice now that prompted the respondent to put on the notice of motion in relation to abuse of process and it may have been reasonable to initiate proceedings up here and to come up here and not even require the respondent to be present but to report to the court and say look, we think there may be some jurisdictional difficulties in the other court and these are protective and we do not want to incur costs one way or the other but that is not what happened; what happened was that these proceedings were actively sought to be kept going at the same time as proceedings were kept going below." (emphasis added)
Counsel for the respondent then addressed what had happened at the directions hearing on 7 July 1994 as follows:
"The applicants sought to have the matter go for conciliation and it was opposed and I think we filed the notice of motion on that same date but we served it on them the previous day and it was opposed on the basis that we took the view the notice of motion should be dealt with before we had to go up and be involved in conciliation in the Federal area having gone through that in the State area.
Can I say in relation to the point that was raised about the relevance of what occurs after the commencement of proceedings, can I simply say that the section refers to the institution of proceedings and the authority in relation to section 247 (sic) which is a case - and I apologise, I have not given your Honour a reference of this, I think Hodder v Thompson, I think it is found at 29 IR - said that proceedings of course refers to all the proceedings much in the same way as the same approach has been taken to the meaning of "matter" in the Federal Court Act. So essentially what the section deals with is not just the commencement of the proceedings but the totality of the proceedings.
So on that basis we press the application and as I have said I led this from the bar table and I have not got any further instructions but I understand it was again mentioned yesterday and the proposition was that it should be put. Both parties have agreed that in the State area it should be set down for hearing. Now whether it was set down for hearing, I don't know, by Commissioner Harrison."
The reference to "the relevance of what occurs after the commencement of proceedings" was a reference to the submissions of the applicant's solicitor which were as follows:
"It is our submission, your Honour, obviously that the proceedings were not commenced vexatiously here; it is our submission that we would have been remiss in not commencing proceedings here out of caution for the interests of our client who is a disabled employee dismissed from his employment and for the protection of his interests we consider that there was and remains a reasonable uncertainty as to the provisions of the new Industrial Relations Act and in fact the matter before your Honour earlier this morning discussed the test case I believe in early August dealing with the availability of an adequate alternative remedy.
We submit that there is no basis for saying the matter was brought vexatiously because of the reasonable uncertainty as to the availability of an adequate alternative remedy in New South Wales."
At the conclusion of submissions, I delivered the following ex tempore reasons for judgment:
"In this matter the applicant has filed today in court a notice of discontinuance. The respondent seeks an order for costs on the basis that the proceedings, as instituted, were vexatious and an abuse of process. In fact there had been listed for directions today a notice of motion filed on behalf of the respondent seeking an order that the commencement of the proceedings here, in this court, was vexatious or an abuse of process of the court and that the action be stayed permanently.
The basis for that application, which is also the basis of the application for costs, was that prior to the commencement of the proceedings in this court the applicant had commenced proceedings in the Industrial Commission of New South Wales under the provisions of the Industrial Relations Act New South Wales 1991, relating to his dismissal from the employment of the respondent, that being the substance of the proceedings also brought in this case.
It appears that the New South Wales proceedings have continued with steps being taken in relation to conciliation and conferring. Those active steps have been taken over the period from the commencement of the proceedings in early May 1994 up until the present time. The precise status of the New South Wales proceedings is not known. However, it appears that they have been active at least until this week and if they are no longer active it would appear that that is only so because they may have been settled as a result of the formal steps which have been taken in the New South Wales jurisdiction since the initiation of proceedings there-they being the matters referred to in the affidavit of Mr Roger of 6 July 1994.
The proceedings in this court were commenced on 20 May 1994. Since that time they have been before the court on a number of occasions. They first occasion was before his Honour, Justice Moore on 9 June 1994 on which occasion the parties were represented by legal representatives. The matter was adjourned until 23 June 1994. On that date, that is 23 June 1994, the matter was again listed for directions before Registrar Quinn. Again the parties were represented by legal representatives and on that occasion the proceedings were then adjourned to 7 July 1994 on which occasion the parties were again legally represented. On that occasion the matter was before Registrar Hagan who adjourned the matter by consent to today.
I am informed by Mr Pearce, for the respondent, that on 7 July 1994, an application was made on behalf of the applicant to have the matter referred to the Industrial Relations Commission for the purposes of conciliation in accordance with procedures under the federal legislation. Whilst there was no direct evidence before me to that effect, there is an agreement between the parties that I should act upon the basis that that is in fact what occurred before the registrar on 7 July 1994. It was submitted on behalf of the applicant that he was entitled to and indeed it would have been remiss for his solicitors who represent him in this jurisdiction not to have commenced proceedings in a protective sense because of the uncertainty of the jurisdictional issues between the State and Federal legislation.
There is a 14 day time period in which to bring an application in this court and I am told that there is also a time limit of somewhere between 21 days and 28 days for the commencement of proceedings in the State jurisdiction. It seems to me that that is a good reason why proceedings might be brought in both courts at the same time so that a party does not fall foul of the difficult jurisdictional questions which the legislation in both the State and the Federal sphere has posed. However, it seems to me that the actions which have been taken by the applicant in the New South Wales jurisdiction clearly indicate that that application has not been treated as a protective one only; active steps have been taken pursuant to and following the commencement of those proceedings. It also seems to me that the same can be said in relation to the proceedings here - that active steps have sought to have been taken in relation to these proceedings which take the matter beyond the commencement of them solely for the protective reasons which otherwise would be reasonable.
In those circumstances it seems to me that this case falls within that part of section 347 of the Industrial Relations Act which says that a cost order can be made in exceptional circumstances.
It seems to me however that a question does arise as to whether...there ought to be an order for costs in relation to the entirety of the proceedings or whether it ought only be in respect of the active steps which were taken thereafter. The problem is I am without evidence in relation to the question of whether the application as initially filed was filed in a protective sense or not. However, it seems to me that having regard to the fact that active steps were taken in the proceedings thereafter and there was no indication ever given to the court that these proceedings were protective only, having regard to the jurisdictional problems to which I have already referred, that I should infer that it was not intended that they be protective only but was always intended that they be actively pursued.
In those circumstances I think it is appropriate that an order for costs be made. Accordingly I order that the applicant pay the respondent's costs of the proceedings in this court. I do not consider it necessary for me to formally make an order that the proceedings be discontinued. The notice of discontinuance has been filed in accordance with the rules and the proceedings are thereby discontinued."
Evidence on application to set aside costs order
In the application to set aside the order for costs, I had the benefit of the transcript of all proceedings, both in the Industrial Relations Court and the New South Wales Industrial Relations Commission. Additional evidence was filed by both parties. It is necessary to refer to that evidence in detail.
Course of proceedings in Industrial Relations Commission of New South Wales
The applicant had filed his claim for relief relating to unfair dismissal pursuant to s 246 of the Industrial Relations Act 1991 (NSW) in the Industrial Relations Commission of New South Wales on 2 May 1994. In that application, he stated that he worked under the Commercial Travellers' (State) Award as a sales representative. It appears that the information as to that award coverage was obtained by the applicant when he made inquiries of the New South Wales Industrial Relations Commission in Newcastle. The applicant said, in relation to that inquiry, that after asking about the differences between a sales manager and a sales representative, he indicated to the officer with whom he spoke, whose name he did not record, that his job description fitted that of a sales representative and he asked what rights he had. He says he was informed that he was covered by the Commercial Travellers' (State) Award and that he could file for unfair dismissal by obtaining forms from the Industrial Relations Commission. The applicant obtained an application form and, in the meantime, consulted with a solicitor.
On 16 May 1994, the matter was listed in the Industrial Relations Commission of New South Wales for what, according to the transcript was a "Conciliation Hearing" before Commissioner Harrison. As I understand it, this was the first occasion that the matter was before the Commission. I note in passing that section 247 of the Industrial Relations Act 1991 (NSW) provides:
"The Commission must endeavour, by all means it considers proper and necessary, to settle the applicant's claim by conciliation."
When the matter was called on before Commissioner Harrison, and after the appearances and other formalities were dealt with, the respondent's solicitor said:
"Commissioner, the situation is that the substantive matters involved were only made known to my principals by fax last Wednesday. They don't feel that they've...they're in a position yet to fully deal with the matter but there is also an issue of jurisdiction that they wish to consider and that relates to the fact that the agreement under which the applicant was employed, was an agreement registered under the federal system.
I have not been briefed to make submissions to you in that regard only it's just that they wish to look into and the implications of it.
They don't wish to hide behind that and they are happy to involve themselves in any discussions in the meantime that might circumvent these proceedings.
I would submit that a proper course of action would be to put the matter over to some further date, not too far away, but I would submit, three or four weeks to allow the respondent to obtain advice about that matter and to also allow the parties to attend some sort of conference at which stage the respondent can make a properly measured response to the application."
The Commissioner stated:
"I'll put the matter in for report back and further
conference as required or further hearing as required. I'll direct the parties to confer in the meantime, to consider the issues of jurisdiction as well as substance. The matter is so adjourned. Thank you."
The adjourned date was 8 June 1994.
On 7 June 1994, a conference was held between the applicant and Mr Michael Smith, the Human Resources Manager of the respondent. The purpose of the conference was to consider settlement of Mr Scott's claim for unfair dismissal. Also present at the conference were the solicitors for the respective parties. During the course of the conference, the following conversation occurred:
Mr Humphreys: "I understand there is some question about jurisdiction. What is the Federal Award involved?"
Mr Smith:"It is not an award, it is a registered industrial agreement entitled "The Australian Liquor Hospitality and Miscellaneous Workers' Union Access Industries for the Disabled Limited Industrial Agreement, 1993."
Mr Humphreys: "Are you claiming that Mr Scott is covered by this agreement?"
Mr Smith:"It was possible that he may be covered by the Agreement but that was a matter which needed to be clarified."
Mr Humphreys: "Is there a provision in that Agreement to cover the actual position previously occupied by Mr Scott?"
Mr Smith:"There is no specific mention made of positions entitled either Sales Manager or Sales Representative but it could be argued that the position of Marketing Officer which is included in the Agreement might apply."
Mr Humphreys was provided with a copy of the Agreement and there was discussion as to which part referred to Mr Scott's position. However, before being given much of an opportunity to consider the document, the respondent's solicitor stated that the meeting was arranged in an attempt to settle the matter and it was not appropriate at this time to be considering jurisdiction matters.
On 8 June 1994, when the matter again came before Commissioner Harrison, Mr Scott appeared for himself and a Ms Connally appeared for the respondent. Mr Scott informed the Commission that he and the agent for the respondent had had a "conciliation meeting yesterday" and that:
"we've got the basis of a...settlement. It just needs to be formalised in writing which the agent is putting together to be sent to my solicitor and at that time they propose that, if everything [is] agreeable, that he just notify you we've come to a settlement".
Ms Connally confirmed this was the position. The Commissioner, noting that there was "agreement in principle" stated he would hold the matter open for a period of 14 days and would, on advice from the applicant, dispose of the proceedings "ex parte". The Commissioner then adjourned the matter.
Course of proceedings in Industrial Relations Court
The matter was first listed for directions before Moore J in the Industrial Relations Court on 9 June 1994. Mr Brown appeared on behalf of the respondent and mentioned the matter on behalf of the solicitor for the applicant. Mr Brown informed the Court that the matter had "settled in principle" and asked the matter to be stood over for 14 days "to enable terms to be prepared, filed and either a Notice of Discontinuance or those terms filed with the Court". The matter was adjourned to 23 June 1994. On that occasion, the matter was listed before a Registrar. Mr Roger advised the Registrar that "this matter is effectively settled except that the documents had not actually been exchanged". Ms Burrows, the solicitor for the applicant, asked for the matter to stand over for a further 2 weeks "pending finalisation of this settlement and I am instructed that we will be discontinuing at that time, subject to the finalisation of the settlement". The matter was thus stood over until 7 July 1994.
On 7 July 1994, the matter was again listed before a Registrar. On that occasion, Mr Humphreys, the solicitor for the applicant, informed the Registrar that the settlement which it had hoped to have been arrived at had fallen down and sought to have the matter referred to conciliation in accordance with the Act. Counsel for the applicant opposed that course and advised the Registrar that the respondent had filed a notice of motion that the matter be struck out as an abuse of process. He submitted:
"The circumstances are simply this, that on 9 May, the applicant made a similar application under Chapter 3, Part 8 of the New South Wales Industrial Relations Act. On 16 May, it was conciliated before Commissioner Harrison. On 30 May, we received this application. On 7 June, it was again conciliated before Commissioner Harrison where it was reported to Commissioner Harrison that we had an agreement and a settlement.
In those circumstances, we do not see that there is any purpose in going to conciliation in another tribunal, when we have had conciliation in the state tribunal. It is just running up costs. The applicant really has to elect where they want to run this case, if they want to run it in the State tribunal or in the Federal tribunal..."
Mr Humphreys, the solicitor for the applicant, informed the Registrar that the applicant proposed to pursue the matter in the Federal jurisdiction and would be withdrawing the proceedings in the State jurisdiction. He stated that it appeared that that had not yet formally been done. The Registrar stated that he was not prepared to refer the matter for conciliation at the Federal level until a decision had been made as to jurisdiction. Mr Humphreys reiterated that he understood a decision had been made but as yet the appropriate steps had not been taken to discontinue proceedings at the state level.
The parties, at the Registrar's invitation, then conferred, at which point counsel for the respondent said to Mr Humphreys, the solicitor for the applicant:
"You cannot pursue two applications in different jurisdictions. Access Industries intends to pursue the strike out motion if your (sic) persist in seeking conciliation of this matter. Your application in this jurisdiction is out of time.
If you proceed in this jurisdiction Access Industries will resist the extension of time and will probably seek to press the section 170EB point which will have to be argued.
If you pursue your application in the State jurisdiction Access Industries will not contest jurisdiction. This should not be seen as an admission by Access Industries that the Commercial Travellers' Award applied to Mr Scott's employment for any other purpose.
It is a matter for your client."
Mr Humphreys absented himself for a short time. When he returned he said:
"I cannot contact Tom Scott. I have to get instructions.
The parties thereafter agreed that the matter be stood over for mention in 7 days. Upon resumption in Court, counsel for the respondent stated to the Registrar:
"I understand it is now by consent that we stand this matter over into the list in a week's time at which time it should be clear as to which election the applicant's made."
The matter was thus stood over to 14 July 1994.
On 6 July 1994, the solicitors for the respondent had written to the Industrial Relations Commission of New South Wales, Newcastle Registry, advising that the applicant had failed to return an executed copy of the terms of settlement. The letter advised the Commissioner that they had been informed on 28 June 1994:
"...that the applicant did not wish to settle this matter pursuant to the agreed terms, but sought to pursue his claim for reinstatement.
In light of the above we request that this matter be relisted for further directions."
On 13 July 1994, the matter was again listed before Commissioner Harrison. On that occasion, Mr Scott appeared for himself and Mr Anthony, a solicitor, acted as agent for the solicitors for the respondent. Mr Scott informed the Commissioner:
"...we attempted to conciliate, we did not get to a decision on that. We had some discussion as to whether it was New South Wales jurisdiction or Federal. I understand Access Industries have agreed that its, that they won't contest that it is New South Wales. I ask you to set a date for a hearing."
Mr Anthony confirmed that the respondent would not dispute jurisdiction in the New South Wales Commission.
Were there omissions in the material before the court on 14 July 1994?
The present application arose because the applicant's solicitor approached the court on the afternoon of 14 July 1994 and alleged that the full facts had not been put before the court by the respondent when it made its costs application. Counsel for the respondent disputed that there had been any omission or to the extent that there were omissions in the material that those omissions were misleading. He submitted that there was no material omission in relation to the jurisdictional issues as there had been a reference to jurisdictional matters, albeit in a general way, before me on 14 July 1994 and that in any event the possibility of there being a state award was referred to in the application. However, it will be clear from the above that this was not a case where the applicant had failed to give any consideration to the question of jurisdiction. The correct position is that the respondent did not readily know whether the applicant's employment was governed by a state award or a federal agreement. Counsel for the respondent submitted that the applicant not only could have ascertained this information accurately by a search of the appropriate court registries but that it was not the respondent's function to be assisting the applicant in this regard. I do not agree with the latter submission. In my opinion, an employer should know the conditions under which persons are employed and make that information known to employees. However, even if that is not the case, the evidence before me on 14 July 1994 did not fully disclose the matters relating to jurisdiction which were clearly relevant to the costs application.
Another matter to which reference should be made is the question of the accuracy of Mr Roger's statement in his affidavit that the matter "was conciliated before Commissioner Harrison" on 16 May 1994. Counsel for the respondent denied that there was anything misleading or inaccurate about that statement. He submitted that the hearing on 16 May 1994 was a conciliation hearing and hence the matter was "conciliated". He referred to occasions when that terminology had been used by the applicant, personally, and also on one occasion by the applicant's solicitor. He referred to the provisions of ss 247 and 248 of the Industrial Relations Act (NSW) 1991 which provide:
"[s247]Conciliation
The Commission must endeavour, by all means it considers proper and necessary, to settle the applicant's claim by conciliation.
[s248] Arbitration
(1)When, in the opinion of the Commission, all reasonable attempts to settle the claim by conciliation have been made but have been unsuccessful, the Commission is to determine the claim by making an order under this Part.
(2)Nothing in this section prevents further conciliation from being attempted, or the parties from settling the claim, at any time before an order is made determining the claim."
Counsel for the respondent submitted that as the matter has now been heard by the New South Wales Industrial Commission, the matter must have been conciliated for the New South Wales tribunal to be invested with jurisdiction. Notwithstanding that the matter was listed as a conciliation hearing and the word "conciliation" was used by the applicant on one occasion and by one the solicitors who appeared for him on a directions hearing, I am of the opinion that it was inaccurate to state that the matter had been conciliated before Commissioner Harrison when what had happened was that the matter had been adjourned before Commissioner Harrison, with the parties being directed to confer. Thus, I do not consider that the unqualified statement in Mr Roger's affidavit accurately reflects what occurred in the New South Wales Industrial Commission on 16 May 1994.
Similarly, I consider it was inaccurate to state that a verbal agreement had been reached between the parties and that that agreement had been reported to Commissioner Harrison who "noted the private agreement", when clearly what had happened, as the Commissioner had been advised, was that there had been an agreement in principle reached between the parties. It was also inaccurate for the respondent to submit that different solicitors were used in each jurisdiction when there had been a change of solicitor, with the new solicitor acting for the applicant in respect of the whole claim.
It will be apparent from the above that on 14 July 1994, I was not informed:
that it was the respondent who had first raised the question of whether there might be a jurisdictional issue, when the matter was first listed before Commissioner Harrison on 16 May 1994;
that the respondent's solicitors informed Commissioner Harrison that it was possible the applicant was covered by a Federal Agreement, and that that was a matter which needed to be clarified;
(iii)that, knowing that there was a jurisdictional issue which needed to be clarified, the respondent consented to settlement negotiations proceeding and continued to so consent after the proceedings were commenced in this Court;
that the Industrial Relations Court proceedings were adjourned on two occasions to enable settlement negotiations to be finalised;
that the parties had been conferring and negotiating privately.
that there had been no formal conciliation under the auspices of the Industrial Relations Commission.
(vii)that an agreement had been reached in principle but that the settlement had broken down;
that it was only after settlement negotiations broke down that the solicitor for the applicant sought to pursue conciliation in the Federal sphere;
that the applicant's solicitor had informed the Registrar on 7 July 1994 that the applicant would be discontinuing in the State sphere;
it was only after the Registrar had been so advised that the respondent's counsel informed the applicant's solicitor that the respondent would not contest jurisdiction in the State sphere;
that it was after the respondent had advised that it would concede jurisdiction in the State sphere that the applicant had elected to discontinue the proceedings in the Federal sphere.
(xii)the applicant had changed solicitors.
The whole tenor of the respondent's case on 14 July 1994 was that the applicant had actively pursued the matter in both jurisdictions at the same time. In my opinion, that was a wholly inaccurate complexion to place upon the events which have now been recounted in full.
That of course does not mean that I should necessarily set aside the order for costs which I made on 14 July 1994. It is necessary to consider first whether, knowing the facts which I now know, I would have made an order under s 347 and secondly to determine whether in the exercise of my discretion, I should set aside or vary the order.
In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, Wilcox CJ at 264-265 stated:
"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."
See also Foxcroft v The Ink Group Pty Limited (unreported, Industrial Relations Court, Wilcox CJ, 14 October 1994) and Heidt v Chrysler Australia Limited (1976) 26 FLR 257, where Northrop J stated at 274-275:
"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 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 facts adverse to the party instituting the proceedings. Where the test is satisfied, having regard to the general policy of the section, the Court may, nevertheless, in the exercise of its discretion, make no order as to costs:
See also Geneff v Peterson & Ors (1986) 19 IR 40."
Had I been aware of the facts which are now before me, I am of the opinion that I could not have found that the applicant instituted proceedings in this Court 'vexatiously or without reasonable cause'. The applicant was in a state of uncertainty as to whether the appropriate jurisdiction was in the Federal Court or in the New South Wales Industrial Relations Commission. That uncertainty was engendered by statements made before the Industrial Relations Commission of New South Wales by the respondent's solicitor. Counsel for the respondent, in his submissions on 14 July 1994, acknowledged that it might not be unreasonable to initiate actions in both if there was some uncertainty as to jurisdiction. I not only consider this submission to be correct, I consider that an application instituted because of that uncertainty could not be said to be instituted vexatiously or without reasonable cause unless there was some other factor relevantly involved. The respondent sought to be make a case that the reason the proceedings were commenced in this court was because at the time he filed the application, there was potential for a higher award of damages in the federal jurisdiction. The applicant conceded that he was aware of this possibility and that was a factor in his decision in filing the application in this court. However, he also stated that this was not the reason why he had commenced an action in the Industrial Relations Court. He said:
"It was part of all the information that I had about Federal and State, but my main concern was which jurisdiction was I covered by and my solicitor at that time couldn't tell me and Access Industries through McKessar was saying that I was covered by the Federal, so at that stage I thought I'd better talk to somebody who knows what they're talking about and take some advice."
I accept this evidence. It is entirely consistent with the other evidence in the matter. There was no other relevant factor which would cause this case to fall outside the usual rule that to merely commence proceedings in this jurisdiction because of uncertainty as to jurisdiction does not mean those proceedings have been commenced vexatiously or without reasonable cause. Accordingly, I am of the opinion that on the facts as they are now before me, I an order under s 347 would not have been made.
That leaves the question whether as a matter of discretion I should set aside the costs order. Counsel for the respondent relied upon the fact that the proceedings were adversarial, that the transcript of the Industrial Commission proceedings was not available to the respondent's solicitors and that Mr Rogers's affidavit of 6 July 1994 was, for the most part, sworn on information and belief. It was submitted that the information in his affidavit was put to the Court in good faith, the applicant was legally represented, Mr Roger was not cross examined, and no adjournment was sought to permit an opportunity to deal with matters which were raised in the course of argument.
In my opinion, the mere fact that the proceedings were adversarial ought not, of itself, protect a party who has put material before the court which is inaccurate and misleading. The solicitor who represented the applicant on 14 July 1994 did not have the carriage of the matter. She informed the court that she had only become aware of the costs application half an hour before the matter was called on and that she had no instructions as to costs. Thus, whilst it is relevant that the applicant was legally represented on 14 July, the context, level and extent of that representation is also relevant to the question whether, as a matter of discretion, the order should be set aside. It is also in that context that the fact that Mr Roger's evidence was not challenged by cross examination must be considered. It must be remembered that the respondent's notice of motion was served on 6 July and filed on 7 July 1994. It was after it was filed that the respondent made its concession in relation to the State jurisdiction. The applicant acted upon that concession on the next appropriate occasion, by filing a notice of discontinuance on 14 July 1994. It was clear from the statements made by the applicant's solicitor on that occasion that it was not anticipated that the costs application would be made. The respondent's legal representatives had given no indication that they would pursue the costs order if the applicant discontinued the proceedings. In the circumstances, the applicant's solicitor's lack of anticipation was both understandable and reasonable.
The fact that Mr Rogers's affidavit was, for the most part on information and belief, does not take the matter further as the source of the information was not stated. More significantly however, as I state below, the respondent must be treated as being aware of the full facts. In relation to the submission that the transcripts were not available, there is no evidence as to why that was so. It could have been because the transcripts were not available. It also could have been because the respondent's solicitors had never tried to obtain them or there could have been other factors to explain their absence. Finally, I do not consider the fact that no adjournment was sought, assists the respondent. In my opinion, the Court is entitled to be accurately informed of relevant matters which, in this case, was the detail of the course of the proceedings in both this court and the Industrial Commission of New South Wales whether or not the other party is represented and regardless of the fact that such proceedings are adversarial. I consider that in this case, there were major omissions in that regard.
It follows therefore that the order which I made on 14 July 1994 ought not to remain on foot. The applicant's solicitor submitted that I should vary that order by substituting an order that the respondent pay the applicant's costs of and in relation to the costs application including the present application. However, the true nature of that application is not an application that the costs order be varied, but that the respondent pay the costs of the costs application and of this application. In this application I consider that the appropriate order is that I set aside the order for costs made on 14 July 1994.
That leaves the question whether I should make an order for costs against the respondent in respect of its costs application and the current application. The application for costs was a proceeding in a matter within s 347. As Wilcox CJ observed in Foxcroft:
"Within the one matter there may be a multiplicity of proceedings; for example, an appeal to a Full Court (see Marsh v Adamson (1985) 5 FCR 124), an application for leave to appeal (see Thompson v Hodder (1989) 29 IR 339 or a motion for punishment for contempt (see Gregory v Philip Morris Limited (1987) 74 ALR 300.
I have referred already to Wilcox CJ's statement in Kanan's case. That statement does not purport to be an exhaustive statement as to when it might be said a proceeding is instituted vexatiously or without reasonable cause. In my opinion, if an application is made on the basis of material which, because of the omission of other material, does not accurately reflect the matters which the court might take into account, it may be that such an application is instituted vexatiously or without reasonable cause. Whether it is so instituted will depend upon all the circumstances. If, for example, the omitted evidence was not and could not reasonably have been within the knowledge of the party instituting the proceedings, I doubt that it could be said that the application fell within s 347. However, if the omission arose because the party instituting proceedings deliberately chose not to make inquiries in respect of a relevant matter, that is a fact which might be sufficient to satisfy the Court that the proceedings were instituted vexatiously or without reasonable cause.
In the present case, there is no evidence as to whether Mr Rogers personally knew of all or any of the matters which are now in evidence on this application. However, whether he did or not, the position is that the respondent knew of all those matters, either because officers of the respondent knew them or because its solicitors or solicitors' agents knew them. In such circumstances, a party cannot hide behind the failure of communication, if that is what happened, between or from persons who represent its interests.
On the facts as they are now known, I am of the opinion that the costs application had "no substantial prospect of success". The commencement of the s 170EA application was clearly a protective application at the time it was filed. Counsel for the respondent conceded that in the case of a protective appeal, it usually could not be said that such an application was commenced vexatiously or without reasonable cause. In my opinion, this matter clearly fell into that category. I have earlier referred to the discretionary factors which arose for consideration in determining whether I should set aside the costs order made on 14 July 1994. Those same factors arise in relation to the exercise of my discretion in respect of the applicant's application for costs of the costs application. For the same reason as I have already expressed in relation to these discretionary factors, I do not consider that they are sufficient in to refuse the application for costs against the respondent on its costs application.
That leaves, finally, the question of the costs of this application. Section 347 only permits the recovery of costs against an applicant where a proceeding has been instituted vexatiously or without reasonable cause. It follows therefore that the applicant is not entitled to recover the costs of this application from the respondent, notwithstanding that the application was necessitated by the application for costs.
I certify that this and the preceding (31) pages are a true copy of the Reasons for Judgment of the Honourable Justice Beazley.
Associate:
Dated: 16 December 1994
APPEARANCES
Solicitors for the Applicant: Blake Dawson Waldron
Counsel for the Respondent: Mr Pearce
Solicitors for the Respondent: Connah Steed & Co
Date of hearing: 25 November 1994