IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. 22 of 1983 ) ) INDUSTRIAL DIVISION IN THE MATTER of the Conciliation and Arbitration Act 1904 AND IN THE MATTER of an application under sections 140 and 141 of the said Act BETWEEN: PATRICK JOHN ROUGHAN Applicant AND: MAXWELL ROY COULSON, REX SMALL, ALLAN ADAMTHWAITE, ROBERT GARRETT, JOHN RUDDER, MURRAY BENNETT, NEVILLE PROUD, BARRY COLE, JAMES BENNETT, JOAN WATSON, LORRAINE EDWARDS, GRAHAM SHAW, JOSEPH VITULLO, KATHIE EVANS, LESLIE PARSONS and THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES' UNION Respondents ORDER JUDGE MAKING ORDER: Neaves J. DATE OF ORDER: 24 November 1983 WHERE MADE: Sydney THE COURT ORDERS THAT: 1. Paragraph 2 of the order made herein on 31 October 1983 be set aside. There be no order as to the costs of the proceedings commenced by rule to show cause granted to the appli- cant on 10 August 1983. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY INDUSTRIAL DIVISION CORAM: DATE: No. 22 of 1983 www ww IN THE MATTER of the Conciliation and Arbitration Act 1904 AND IN THE MATTER of an application under sections 140 and 141 of the said Act BETWEEN: | AND: Neaves J. 24 November 1983 PATRICK JOHN ROUGHAN Applicant MAXWELL ROY COULSON, REX SMALL, ALLAN ADAMTHWAITE, ROBERT GARRETT, JOHN RUDDER, MURRAY BENNETT, NEVILLE PROUD, BARRY COLE, JAMES BENNETT, JOAN WATSON, LORRAINE EDWARDS, GRAHAM SHAW, JOSEPH VITULLO, KATHIE EVANS, LESLIE PARSONS and THE AUSTRALASIAN MEAT INDUSTRY EMPLOYEES' UNION Respondents REASONS FOR JUDGMENT — On 31 October 1983 I gave judgment in this matter and discharged the rule granted on 10 August 1983 to Patrick John Roughan ("the applicant") calling upon The Australasian Meat Industry Employees' Union and the persons comprising the Committee of Management of the Newcastle and Northern Branch of that Union ("the respon- dents") to show cause why certain orders under sections 140 and 141 of the @nciliation and Arbitration Act 1904 ("the Act") should not be made. In making that order I also directed that the applicant pay the costs of the respondents, the costs of The Australasian Meat Industry Employees' Union ("the Union") to be those of a submitting party. That order was made consequentially upon the order discharging the rule to show cause. My attention was not directed to section 197A of the Act which, so far as material, provides - "197A. A party to - (a) woe (b) a proceeding, including an appeal, before the Gurt, or before a court of a State or Territory, in a matter arising under this Act; or (c) ... shall not be ordered to pay any costs incurred by any other party to that proceeding except where the party against whom the order is made instituted the proceeding vexatiously or without reasonable cause." Upon motion by the applicant heard on 18 November 1983 and in exercise of the power conferred by Order 35, rule 7 of the Federal Court Rules I set aside the order for costs and heard argument on an application on behalf of the respondents that an order for costs be made against the applicant on the ground referable to section 197A. of the Act that the applicant instituted the proceedings without reasonable cause. Qunsel for the respondents referred to the three areas of argument in the proceedings — (a) that the resolutions of the Committee of Manage~- ment at its meeting on 2 May 1983 for the employment of Mr. Murray Bennett as a temporary relief organiser were not within the powers conferred on the Committee by the Federal Rules of the Union properly construed; (b) that, in so far as the Federal Rules of the Union authorised the employment of Mr. Bennett as a temporary relief organiser, the rules were invalid; and (c) that the Committee in resolving to employ M. Bennett had not acted bona fide. The facts, he submitted, were not seriously in dispute and there was no substance in any of the propositions advanced on behalf of the applicant. The case made for the applicant was, so it was argued, essentially irreconcilable with the judgment of the Full Court of this QMurt in Roughan v. Coulson & Ors. (1982) 2 I.R. 145; 3 I.R. 393. T agree with the submission made on behalf of the respondents that, if the only issue in the case had been the question of the bona fides of the Committee of Management, a very strong case could be made for an order for costs guinder section 197A. of the Act on the ground that the proceedings had been instituted without reasonable "a. "eT = we. . cause. This;would be so because no material of any substance ~~: was put forward to support the submission and the applicant, in evidence,* expressly disclaimed any intention on his part to impute mala fides to the members of the Committee. However, the question of the bona fides of the Committee of Management was not the only issue in the case and, although I rejected each of the other submissions made on the applicant's behalf, that of itself is not sufficient to justify the conclusion that there was no reasonable basis for the institution of the proceedings: The Queen v. Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 C.L.R. 470 per Gibbs J. at p. 473. In Heidt v. Chrysler Australia Ltd. (1976) 26 F.L.R. 257 at p. 272 Northrop J. set out the policy of section 197A. of the Act in the following terms - "It is designed to free parties from the risk of having to pay the costs of an opposing party. At the same time the section provides a protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court." After referring to reported decisions where courts have - ®& considered the exercise of summary powers to terminate Fad & proceedings on the ground that they do not disclose a reasonablg or, prpbable cause of action, his Honour said at p. 274 °-7- " > "Section-197A is to be considered when proceedings in the court have been completed and dismissed. The principles set out above are to be applied at an early stage of the course of the proceedings. In my opinion, similar principles are to be applied when considering the matters raised by s. 197A. Great care must be exercised to ensure that in finding that a party has instituted pro- ceedings vexatiously or without reasonable cause, that party is not improperly deprived of his freedom from liability to pay costs to an opposing party. The test is a sub- stantial one." Such difficulty as the present case presented lay in the éonstruction of the relevant parts of the Federal Rules of the Union. That different conclusions are open as to their true meaning and effect is apparent from a consideration of the views expressed in Poughan v. Coulson & Ors. supra. That case was concerned with the meaning and effect of the rules relating to the termination \\ by the Gommittee of Management of the services of an elected organiser. The present case was concerned with a different question - the power of the Gmmittee of Management to employ a temporary relief organiser. Although much assistance was to be gained from a considera- tion of what was said in the judgments in the earlier case, Ido not think it is correct to regard that decision as being decisive of the matters which the applicant wished to raise in the present proceedings. In all the circumstances I think it is appropriate to make no order as to the costs of the proceedings. I certify that this and the five (5) preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice Neaves. Date: 24 November 1983 {.0 "Ca se Associate