IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1707R of 1996 BETWEEN ANDREW FRANK RABEL Applicant AND: WHITEHORSE CITY COUNCIL Respondent JUDGE(S): NORTH J DATE OF ORDER: 22 JUNE 1998 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The applicant is to pay the respondent's costs of and incidental to this application for review. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1707R of 1996 BETWEEN ANDREW FRANK RABEL Applicant AND: WHITEHORSE CITY COUNCIL Respondent JUDGE(S): NORTH J DATE: 22 JUNE 1998 PLACE: MELBOURNE EX TEMPORE REASONS FOR JUDGMENT COSTS On 16 June 1998, the Court dismissed Mr Rabel's application, in which he alleged that his dismissal by the Whitehorse City Council (the Council) was unlawful. These reasons should be read in conjunction with the reasons for the decision to dismiss the application delivered on 16 June 1998. The application was by way of a review of the exercise of power by a Judicial Registrar who had also dismissed Mr Rabel's application. The Council now claims its costs of the review. The Council relies primarily on s 347(1) of the Workplace Relations Act 1996, which provides: "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 proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause." The Council submitted that the review was instituted without reasonable cause. In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 274, Northrop J said, in relation to a predecessor of s 347: "Great care must be exercised to ensure that in finding that a party has instituted proceedings 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 substantial one." In Thompson v Hodder (1989) 21 FCR 467, at 470, the Full Court of the Federal Court said: "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." In relation to the meaning of "without reasonable cause", in R v Moore; Ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 Gibbs J said, at 473: ".... 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." In Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 157, at 264-265, Wilcox CJ 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." There is a clear policy behind s 347(1) that an applicant should not generally be ordered to pay the costs of a failed proceeding. The case for payment of costs must be clear. The power to order costs will be exercised rarely. The mere fact that an argument fails does not mean that the application was instituted without reasonable cause. Where there is a doubt that the applicant has acted without reasonable cause, no order for costs against the applicant should be made: Nilsen v Loyal Orange Trust (1997) 76 IR 180. I approach the question of making an order for costs against Mr Rabel with the reluctance which the policy of s 347 requires. But, in my view, this case is a clear case. On the facts apparent to Mr Rabel at the time of instituting the review, there was no substantial prospect of success. The essential facts were known to Mr Rabel. Indeed, most of these facts were admitted. The conclusion that these facts justified the dismissal was almost beyond argument. It was only Mr Rabel's preoccupation with continuing to challenge the authority of the Council on any ground whatever which caused him to institute the review. In my view, when Mr Rabel instituted the application, it was bound to fail. Mr Rabel contended that it was reasonable for him to institute the review in the belief that he could persuade the Court that his conduct did not warrant dismissal. From observing Mr Rabel in the witness box and in conducting his case in person, I doubt that Mr Rabel had that belief. If he did, it was not a reasonable belief in all the circumstances. The case was heard over about ten days. The evidence was detailed and comprehensive. However, the mere fact that the evidence took a long time to emerge does not mean that it provided a reasonable basis for bringing the proceedings. Once the evidence of Mr Rabel's conduct was exposed, it was plain that the conduct justified the termination. Mr Rabel argued that the Court retained a residual discretion to refuse an order for costs even if the review was instituted without reasonable cause. Even if that discretion exists, there is no reason in this case to exercise the discretion in Mr Rabel's favour. Iwould be a grave injustice to the Council if it were not to receive the costs of this review. The Council also relied upon s 170EHA(1) in order to claim its costs of the review. In the light of the conclusion that the Council should have its costs under s 347(1), it is not necessary to consider this further basis. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice North Associate: Dated: 22 June 1998 The Applicant appeared in person. Solicitor for the Respondent: Mr G. Katz Date of Hearing: 22 June 1998 Date of Judgment: 22 June 1998