Millan v Burswood Resort (Management) Ltd [2000] FCA 9

FEDERAL COURT OF AUSTRALIA

Millan v Burswood Resort (Management) Ltd [2000] FCA 9 INDUSTRIAL LAW – costs – whether proceeding for interim injunction instituted without reasonable cause – a claim that statement made was false or misleading – whether applicant entitled to rely on his belief of effect of material – whether issue of law concerning scope of section raised – relevance of delay Workplace Relations Act 1996 (Cth) s 347 Heidt v Chrysler Australia Ltd (1975) 26 FLR 257 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Hatchett v Bowater Tutt Industries Pty Ltd (No.2) (1991) 39 IR 31 DANIEL MILLAN v BURSWOOD RESORT (MANAGEMENT) LIMITED W 148 OF 1999 R D NICHOLSON J 19 JANUARY 2000 PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W 148 OF 1999

BETWEEN: DANIEL MILLAN

Applicant

AND: BURSWOOD RESORT (MANAGEMENT) LIMITED

Respondent

JUDGE: R D NICHOLSON J

DATE OF ORDER: 19 JANUARY 2000

WHERE MADE: PERTH

THE COURT ORDERS THAT: The applicant pay the respondent's costs to be taxed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY W 148 OF 1999

BETWEEN: DANIEL MILLAN

Applicant

AND: BURSWOOD RESORT (MANAGEMENT) LIMITED

Respondent

JUDGE: R D NICHOLSON J

DATE: 19 JANUARY 2000

PLACE: PERTH

REASONS FOR JUDGMENT 1 When reasons were delivered on 26 November 1999 it was also ordered that costs be reserved. A written submission has now been received on behalf of the respondent seeking costs pursuant to s 347 of the Workplace Relations Act 1996 (Cth) ("the Act"). That section reads: "347 (1) A party to a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 170CP) 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. (2) In subsection (1): costs includes all legal and professional costs and disbursements and expenses of witnesses." 2 The application is made on the basis that the applicant instituted the proceeding "without reasonable cause". 3 In support of that submission it is contended for the respondent that the applicant's own version of the facts relied heavily on the contents of the letter of 26 October 1999 set out in the prior reasons. It is submitted that on a plain reading of the contents of that letter it is clear that the applicant had no substantial prospect of success. Further, it is submitted the applicant failed to explain his delay in instituting the proceedings and that only served to further diminish the prospects of success of the application. 4 For the applicant it is submitted that mere failure to succeed cannot be equated with a failure to establish reasonable cause. It is said that the respondent cannot suggest that the applicant did not "genuinely believe" that the circular published by the respondent was designed to mislead employees regarding the true facts of the industrial situation. It is submitted for the applicant that the applicant's case also advanced a construction of the published material which on no view was beyond argument. 5 Furthermore, it is argued that the cases where costs have been awarded under the section are relatively few. Here it is said that the case raised significant and arguable matters namely: "(a) The case raised for the first time, the issue of the scope of section 170WG(2) of the WRA; (b) There has been no suggestion that the applicant did not genuinely believe that the material published was intended by the respondent to falsely state the true position so far as the applicant was concerned; (c) It is not able to be suggested that the applicant at the trial could not bring evidence from his work colleagues that they conscientiously believed that the circular bore the meaning contended by the applicant in the interlocutory proceedings. In this respect, the case resembles many false and/or misleading representation cases. Simply because the claim fails, it is submitted that it cannot be said that the case was unmeritorious in the sense required by the authorities." 6 In relation to the issue of the alleged delay it is said this is explained by the affidavit of David Kelly, union official. Essentially, the evidence in that affidavit is that it was only after the applicant had exhausted the usual channels for dispute resolution open to the Union through the Commission that the Union decided to instigate proceedings in the Federal Court in an attempt to seek relief. On this submission, it is said for the respondent in reply that the affidavit does not explain the delay instituting the proceedings because the application made to the Commission did not relate to allegations of false or misleading statements concerning Australian Workplace Agreements, the issue in this proceeding. 7 Also in reply it is submitted that it is significant the applicant did not proceed with his claim for a correcting statement or for his claims for relief other than injunctive relief to prevent the respondent from closing its offer of Australian Workplace Agreements. The failure to pursue a remedy to cure the alleged false or misleading statement, it is submitted, demonstrated that the applicant's construction of the facts lacked any substantial prospects of success. 8 In relation to that claim it is said that the Court should view it as one which "no sensible man would have brought": Heidt v Chrysler Australia Ltd (1975) 26 FLR 257 at 274 per Northrop J. 9 Furthermore, it is contended that the applicant has wrongly placed reliance on a passage of Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257. There Wilcox J said at 264: "It seems to be 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 … 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." 10 Further, Wilcox J stated at 265: "The rationale for making a costs order is that a measure of indemnity should be conferred upon the respondent for the costs it has been obliged to incur in responding to the unreasonably instituted proceeding" 11 The error of the applicant is said to be in considering that it is the applicant's interpretation of the facts which is important. It is submitted what is required, on the other hand, are facts which support an argument on the law rather than a subjective belief in their existence. Reliance is placed on the reasons for judgment delivered on 26 November 1999 to make clear that those facts did not exist. 12 Finally, it is said for the respondent that what was in dispute was the interpretation of the facts which were undisputed between the parties. It is argued the Court should review the interpretation contended for by the appellant as so obviously untenable that it could not possibly succeed: Hatchett v Bowater Tutt Industries Pty Ltd (No.2) (1991) 39 IR 31. 13 In the reasons for judgment I said: "For the applicant's case to raise a serious question to be tried, it is necessary for the first passage in the letter of 26 October 1999 to be able to be read in the manner contended for on behalf of the applicant. In my view, that construction is simply not open. It seeks to draw far too much out of the simple reference in the first paragraph to the fact that in the past, on 12 October 1999, the letter had been written. I accept the submission for the respondent that the sentences in the first paragraph are simply statements of historical fact. I am unable to see any strength in the contention that there can be extracted from that passage the impressions for which the applicant's case contends." I followed that with two further paragraphs in the same vein. 14 In my opinion those findings of fact do more than say that the applicant was unsuccessful in establishing a serious question to be tried. Rather they show that the applicants argument had "no substantial prospect of success" and that "on the applicants own version of the facts, it is clear that the proceeding must fail": Kanan at 264. 15 In the consideration of the balance of convenience, I was unable to infer that the applicant had chosen to delay but concluded that as the application had not been brought as expeditiously as possible that alone weighed in the respondent's favour in circumstances where the application was brought on the eve of the closing of the backpay incentive offer. I accept the respondent's submission that the delay is not explained by the affidavit of Mr Kelly. 16 I do not accept the submission for the applicant that the case raised the scope of s 170WG(2) for the first time. As reference to the reasons makes apparent, there was no dispute between the applicant and the respondent concerning the approach to that subsection. 17 It follows from what I have said that I do not accept that the applicant's genuine belief in his interpretation of the material published will assist him. That belief was found by me to have no substantiation in the material relied upon. 18 The result is that I consider this is a case where it can be properly concluded that the proceeding lacked a reasonable cause. 19 It follows that I consider that the second limb of the exception to subs 347(1) is applicable and allows an award of costs to be made in favour of the successful respondent. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson J.