Steven Thomas McKee v Kingmill Pty Ltd trading as Thrifty Car Rental [1995] IRCA 371

CATCHWORDS INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - RESIGNATION - COSTS Industrial Relations Act 1988 ss 170EA Woller -v- Transport Superannuation Board (1989) 4 VIR 353. Canceri -v- Taylor (1994) 55 IR 31 Kanan -v- Australian Postal Telecommunications Union (1992) 43 IR 257 STEVEN THOMAS MCKEE -V- KINGMILL PTY LTD TRADING AS THRIFTY CAR RENTAL No. NI 1398 of 1994 COURT: LOCKE JR PLACE: SYDNEY DATES: 16 AUGUST 1995 INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES REGISTRY No. 1398 of 1994 BETWEEN: Steven Thomas McKee Applicant AND: Kingmill Pty Ltd Trading as Thrifty Car Rental Respondent BEFORE: Locke JR PLACE: Sydney DATE: 26, 27 April, 20 June 1995 REASONS FOR JUDGMENT The Application Steven Thomas McKee, the applicant seeks compensation. He alleges he resigned from a secure full-time position because of the intolerable treatment meted out to him by the respondent's Managing Director, Mr Bernard Bruning and indeed this person so behaved so as to bring about the resignation. This allegation is vigorously contested by the respondent and it is the respondent's case that the applicant abandoned his employment. Thus, the first issue to decide is whether or not the Court had jurisdiction to hear and determine the matter - did the applicant resign simplicitor or was his act of resignation caused either directly or indirectly by the employer? Determination of this issue entails a reference to the facts. The applicant's contention of facts: It is the applicant's case that, over a considerable period of time Mr Bruning treated him in an increasingly intolerable manner using abusive and offensive language when speaking with him, as well as making requests of him which he regarded as unreasonable, such as the sacking of staff which the applicant considered inappropriate. It is to be noted that the applicant was employed by the respondent as New South Wales State Manager from January 1993 until he relinquished this position on 18 November 1994. Upon termination the applicant received four week's pay in lieu of notice in addition to statutory entitlements. At the time of his resignation he requested the continued use (for a month) of two subsidised company vehicles which formed part of his remuneration package. Mr Jeffrey de Ridder, the respondent's General Manager - Financial and Administration, from whom this permission was sort, allowed the applicant to have the use of one car for a fortnight. Presently the applicant works as a consultant with an establishment trading as Man Phone Rentals. In his evidence in chief, the applicant stated that he met the Managing Director of Man Phone Rentals in early December and as a result; "I have worked a few days prior to Christmas and I have worked a lot of days since, but it is on a consulting basis." He went on to say he met the Managing Director, he believed around December. I would not have started doing anything there until late December. This is contrary to what is revealed in documents produced under subpoena from Man Phone Rentals. Not only did the applicant commence his consulting work on 8 December 1994 but worked a further eight days in that month at a daily rate of $225.00 per hour. Returning to the facts and circumstances of the applicant's departure from the respondent company, he contends on 17 November 1994, during a meeting he describes as "most unpleasant", he was told by Mr Bruning to terminate the employment of one Ms Zappia and if he were not prepared to do so, he should resign. It is alleged the words used by the Managing Director were: "Resign, resign, resign. Go out and write it now you gutless prick." This command was refuted by Mr Bruning. On Friday 18 November the applicant tendered his resignation. (Annexure "E" to Mr Burning's undated affidavit). He asked to reconsider his decision over the week-end. On 21 November 1994, the applicant sent a memorandum to "All N.S.W. Staff" (Annexure "F" to Mr Bruning's undated affidavit) which read: "It is with regret that I am informing you of my resignation. I have decided to move on to something new. Working with such a great team of people over the past 18 months has been a great experience. I thank you all for your enthusiasm and wish you all the best in the future. Signed." In addition, to giving the applicant no other choice but to resign, Mr Brunings treatment also was responsible for causing him some ill health, so it is alleged. The applicant's evidence on this point was very abbreviated: I'd been working hard. You see its a stressful industry anyway without the badgering and difficult meetings on a continuous basis which had been going on for so long. My health was sinus problems.... was feeling very unwell." When asked if he had ever seen a doctor about any of "these ailments", the applicant replied: "Throughout 1994 (without being more specific). They related that most of them were stress related." No evidence was given of any treatment recommended. In the entire period (21 months) the applicant was in the employ of the respondent he only availed himself of two days sick leave. Indeed he could not even remember the surname of the doctor - "Her first name is Masski and she is in Victoria Street." No evidence was given by the medical practitioner in question and the evidence remains silent on the actual cause and extent of the problem. One must query: Was it the industry or Mr Bruning? On the balance of probabilities I am not satisfied on the evidence, that the applicant's health was significantly affected or that Mr Bruning brought about this condition. Indubitably there were tensions between the two men, but again one must doubt that they had existed "for so long" as the applicant urges. Having commenced employment with the respondent in November 1993, the first incident raised by the applicant is on 26 April 1994, over an allegation of sexual harassment (not involving the applicant, but another employee). June and July saw contretemps between the two in what can only be described as clash of perspective. For a few months equilibrium was restored to the work place so far as these two protagonists were concerned, (paragraph 35 of the applicant's affidavit sworn 20 April 1995). Remembrance Day of 1994, saw a flare up on tension between the two, culminating in the applicant's departure. The Respondent's Contention of the Facts The respondent submits that on no view can the end of the instant employment relationship be regarded as a termination at the initiative of the respondent. It is a situation where the applicant resigned of his own volition and the "incontrovertible evidence" is that the employer did not wish the employer to leave. Mr de Meyrick for the applicant submits that the respondent gave the applicant the week end to consider his resignation is totally irrelevant as by then his position was untenable. Subjectively this may have been the case but not supported by objective criteria and does fly in the face of Mr de Meyrick's submission that the alleged unfair pressure was placed on his client so as to effect his resignation. Continuing his submission Mr Christie, counsel for the respondent, said that the evidence supports a finding that the applicant was unhappy working for the respondent based on a number of possible sources, including the legitimate managerial expectations of Mr Bruning, with which he was in conflict. One such expectation being the proper investigation of sexual harassment allegation. Assessment of Evidence and Witnesses Persons called in the applicants case: i. The applicant, Steven Thomas McKee; ii. Kristina Leila Reynolds, former National Sales Manager of the respondent company; iii. Mr Tony Harris, sometime Operations Manager of Kingmill Pty Ltd. Giving evidence in the respondent's case were: a. Bernard John Bruning, Managing Director; b. Eugenie Bruning, his spouse; c. Jeffrey Art De Ridder, General Manager - Finance and Administration. An affidavit of Peter Grace was tendered and became exhibit "E" in the proceedings. Mr Grace, the National Sales Manager - Corporate, was unable to attend to give oral evidence. His deposition embraced a very narrow compass. He had never had a conversation with the applicant alleging he had heard Mr Bruning yelling at him the other day. He further denied ever having heard the Managing Director raise his voice "to Mr McKee". A further negation was to the allegation of the applicant that he said he was in an adjoining room on 17 November when the meeting between Messrs Bruning and McKee took place. At the outset, it must be said I found the applicant an unreliable, unimpressive and inconsistent witness. He exaggerated situations to buttress his own case. One such incident is when he swore in his affidavit that Mr Bruning was frothing at the mouth. When pressed, this was conceded not to be the case. It would appear the main point of contention surrounded an allegation by a former employee, Karen Eccles, against a company employee, Steve Turner of sexual harassment. On 26 April, Mr Bruning invited the applicant together with his female partner to his residence at Manly. Upon arrival at about 6.30pm, drinks were served and Mrs Bruning said words to the following effect: "I was interviewing an employee, Karen Eccles, who resigned on the basis she was going overseas. She would like to work with Thrifty again, but couldn't work at the same place as Steven Turner because he has been sexually harassing her for twelve months." The applicant in paragraph 3 of his affidavit says he responded thus: "I knew about the accusation, because I had spoken with Karen." What Mr Bruning swore the applicant said was: "Karen Eccles has never made any claims of sexual harassment to me. She is just a trouble maker now she is leaving the company..... I have never spoken to her about any sexual harassment claims." The applicant denied saying Karen Eccles was a trouble maker. In giving evidence subsequently the applicant conceded this was not true and the fact was he had lied to his Managing Direction. He had spoken with Miss Eccles, who he says complained, so he said, of one act of sexual harassment some twelve months previously. Miss Eccles was not called to give evidence so the actual extent of what occurred shall remain in the mists of time. However, I am satisfied that she did tell Mrs Bruning exactly what that witness said she was told. Some time the next day, Mr McKee admitted to Mr Bruning that he had misrepresented the situation the evening previously. In his conversation with Mr Bruning he said: "I didn't think it was worth taking the matter any further". An indication of his state of mind on this subject. Not so, Mr Bruning. He took any allegations of this nature most seriously as any responsible employer would. He expected a proper investigation of the allegations. Harking back to the meeting held at the Manly residence on 26 April, the applicant in paragraph 2 of his affidavit deposed: "The following paragraphs support many hostile and unbearable meetings with Mr Bruning". The applicant then went on to recite what occurred at the Bruning home that evening, categorising what occurred at Manly as falling into the above description. When cross examined by Mr Christie on whether this soiree was hostile and unbearable, the applicant conceded it was "cordial". Drinks were served but still the applicant found it "not very comfortable and intimidating". On any view of the evidence I fail to see how this could have related to the Brunings. It could be inferred that the conditions to which the applicant adverted were as a result of his mendacious statement to this superior and his attitude in general to the "Eccles affair" - "I didn't think it was worth taking any further." It is a matter of concern that this misrepresentation is replicated in the applicant's affidavit. Indeed in paragraph 5 thereof is set out the applicant's version of what occurred at the meeting of 27 April (and not in accord with his diary note). It makes no reference to the apology the applicant made to Mr Bruning when he confessed to the true state of his knowledge. Whilst I accept that his solicitor drafted his affidavit, I have no reason to believe that the contentions reflect anything other than the applicant's instructions to his solicitor. He swore the affidavit and for reasons best known to himself changed his mind yet again. He contacted his solicitor the next day, 23 March 1994, and the faux pa was rectified. This fact was not known to the Court until the next day of the hearing. As corroboration of his allegations of hostile and unbearable conducts, the applicant deposed: "I kept a consistent diary of my encounters with Mr Bern Bruning that I still have in my possession." When questioned in relation to certain events it became clear that the contents of the diary were highly abbreviated and contained significant omissions. When asked who initiated the meeting of 27 April 1994, when he revealed to Mr Bruning the actual knowledge he had of Ms Eccles allegations, the applicant gave this evidence: "I instigated the meeting - I am sorry .... I haven't put it in the affidavit whether it was myself or Mr Bruning. I can't remember at the moment. I'd have to refer to my diary, it would be there." Little comfort was obtained from the diary. The entry read: "Met with Mr Bruning for an hour re Steven Turner wants all our airport staff interviewed and report back to him. I didn't have an option." Nothing about having lied previously: nothing about who instigated the meeting: nothing about the meeting being either hostile or unbearable. Paragraph 33 of the applicant's affidavit sets out a conversation by telephone between Messrs Bruning and McKee on 26 July 1994, yet the diary note is brief: "Bern phone conversation..... there was no reply." Just how that note assisted the applicant's recollection some eight months later beggars belief. Over half the applicant's affidavit evidence deals with the sexual harassment issue and the stresses that saga together with Mr Bruning's alleged attitude placed upon him. Whilst Mr Bruning presented as a forceful forthright person, there was nothing in his demeanour which would suggest he would contrive evidence for the purpose of succeeding in his case. As he said in his evidence: " I mean, all I've done is tried to put down the points addressed in McKee's affidavit. I haven't tried to expand and make trouble for the man." There was certainly a divergence in approach between the two gentlemen which would have been a mutual source of irritation. The versions of fact given by both parties differ and on balance I am inclined to accept that evidence given by the Managing Director. Neither Mr Tony Harris nor Ms Reynolds, in giving evidence did not impress me. They certainly were not independent. Both had axes to grind. Ms Reynolds left the respondent organisation of her own accord after a contretemps with Mr Bruning as to the suitability of her dress on an important company occasion inter alia. "Initially I found him cordial.... obviously his height and stature, he was quite imposing in terms of his physical appearance. After working there for a while I felt absolutely intimidated by him.... I did like Mr Bruning." Then she resiles from this at a stance saying: "As a manager/employee, I did not like Mr Bruning." Apart from the criticism of her clothing, the only additional disagreement, Ms Reynolds had with Mr Bruning was the position of her secretary, Deborah Heap, who she brought with her to the respondent company. Ms Reynolds also expressed he disapprobation of the Managing Directors attitude to other personnel and instanced but one example in her evidence. Again I find there existed a divergence of approach between the two persons under discussion. Her judgment was impugned: ergo she bore a grievance against her former superior. Whilst accepting Mr Brunings imposing presence, authority and a loud voice caused by quite a significant hearing impairment, may have discomforted and disconcerted those who were not willing to take his wishes, as managing director, into account. Overall I cannot accept Mr Bruning was the termagant, the three witnesses for the applicant would have. On the evening prior to giving evidence in these proceedings, Ms Reynolds telephoned an executive of the respondent company and told him she had been subpoenaed to give evidence - "forced to come to court." When asked: "So you did not tell him the truth?" Her reply was: "Well, no, I suppose not." Of course the fact was Ms Reynolds came to court of her own volition despite "being forced", despite not being happy about it "because she had let the matter drop 14 months ago when I went though it all and got on with my life." This evidence must and did diminish her credit. Mr Anthony Harris was the final witness called by the applicant. Reading the submissions made by counsel for the respondent on how the Court should view this witness, I concur with what he had to say. One must doubt Mr Harris' bona fides, in light of the evidence he gave in relation to the entries in his diary. Again selective and abbreviated. Doubt must be that on the contemporaneity of the alleged records. Indeed, I regard this evidence as having limited significance. Among other things, the applicant alleged (in paragraph 27 of his affidavit") that he believed Mr Bruning was harming the company. This is against the weight of the evidence. On a reading of the evidence, it is hard to resist concluding that: (1) Mr Bruning had restored the business' viability and provided employment for a great many persons. Only three malcontents came forward at the hearing. (2) The respondent has legal responsibilities to ensure sexual harassment is prevented. The evidence supports a proposition that Mr Bruning viewed his duties in this regard most seriously. It would appear the applicant did not share this opinion and therein lay the genesis what became a long and drawn out battle of wills between the two. (3) The car rental industry is extremely competitive and requires high standard of service to maintain its market share. It was precisely this lack of service that led to further a dissidence between Messrs Bruning and McKee - the Ms Zappia matter. Complaints had been received from customers about this employee and she had been issued with three warnings. Mr Bruning deemed that she ought be terminated. Mr McKee disagreed and thus began another saga involving the clash of wills. It is difficult to resist a conclusion that Mr Bruning was justified in his view of this episode. (4) High standards are to be expected from the Federal Airports Corporation from whom there is no guarantee that the respondent's contract at Sydney Airport will be renewed. Strict criteria apply in order that a contract be renewed or entered into as exhibit "C" reveals. The applicant again equivocated, dissembled and then changed his evidence when asked whether service an important consideration. Thus it can be seen that both the interests of shareholders and employees alike depend on a high performance from senior personnel. Should they be found wanting the viability of the enterprise would be at stake. It must be said that the foregoing is not an exhaustive list of instances where the applicant's evidence was unsatisfactory to say the least. The versions of fact given by both parties and their witness are markedly different - the evidence is constantly in conflict. I found the respondent and his witnesses to be straight forward and direct. Their evidence stands in some respects in stark contrast to that of the applicant. As previously stated, whenever there were occasions of conflict between the two I preferred that evidence led by the respondent. Mr Bruning was the principal witness for the respondent, giving evidence on two of the three days of the hearing. He also swore various affidavits, the most pertinent one being that deposed on an unknown date. This document effectively denies the allegations made by the applicant that he was treated by him "in an increasingly intolerable manner, including the regular use of abusive and offensive language and unreasonable request including requests to sack staff whom, in his discretion as State Manager, he believed should not be sacked". As Mr Christie submitted, unlike the applicant, he was unshaken in cross examination and was not forced to change his evidence when confronted with compelling evidence to the contrary. He denied harassment. He said generally he would abide by any decision staff would make, but this did not preclude him from proferring his own opinion on the subject. However, if he absolutely disagreed, he would tell the relevant decision maker. It depended on the situation whether he merely voiced an opinion or would abrogate that decision. Conceding he was unhappy with the investigation of the sexual harassment investigation conducted by the applicant, he called upon the Human Resources unit from Mitsubishi to investigate the matter further. He did this on the basis of the legal consequences which could flow to the applicant, in particular, if a formal complaint were made by Miss Eccles. He had this to say on the matter: "I was concerned. He lied about this, we had information from Esplins (Solicitors) which said that anybody who hides sexual harassment is up for a $40,000.00 fine and to me he just didn't seem to be going at it to get the information that was obviously there. If you look at the words that are written in the report and if someone else had come along and made another allegation I saw that McKee was in big trouble." From this portion of the evidence it can be gleaned the Managing Director expected sexual harassment claims to be investigated punctiliously, consistent with legal standards. On another occasion when a complaint of this nature came to his notice, the young male employee was transferred to a branch where there were no females on the staff. Initially, the applicant denied having received guidance in the investigation of these matters, then changed his evidence to have being given "informal guidelines." When asked what guidance he had given the applicant Mr Bruning responded as follows: ".....early May last year - if I remember correctly I actually told him what questions to ask.......well you should ask whether anybody's had any reason to think that Steven Turner has harassed you or anybody at all, as a matter of fact, has harassed or made suggestions that were uncomfortable with in a sexual manner or any sort. So yes I did instruct him..... I gave him my advice." Mr Bruning went on to add that the applicant did not do what he had been told to do. In denying that he was furious with the applicant because he had recommended a former employee to a franchisee, the Managing Director conceded he was not happy. Indeed in his affidavit he deposed. "This was the only heated or angry conversation I ever had with Mr McKee in the period of approximately two years, which he worked for Kingmill." This conversation took place at a meeting on 17 November 1994. Continuing, Mr Bruning added: "Well, I don't believe I ever had a really angry frothing at the mouth with Mr McKee." By way of background: Carla Hillary, the former employee, had left the respondent's company because she was not prepared to work to the standard required by Margaret Turrell, the Airport Manager. In her employment with the Franchisee, Ms Hillary would have had daily contact with Ms Turrell, the respondent's Airport Manager. She felt, among other things, the applicant's recommendation indicated lack of support for her position. Mr Bruning supported this assertion. In response to the allegation by the applicant that Mr Bruning endeavoured "to get rid of valuable employees on no real basis", he denied this was so. When Steve Turner was cautioned in respect of some outstanding and unauthorised IOU's, he had a chance to sack him, but because this conduct was out of character he refrained from so doing. Three weeks later Mr Turner departed for greener pastures - Budget at Sutherland. It is interesting to note the views of the applicant and those of Mr Bruning conflicted as to the extent of this matter. Mr Bruning taking a more moderate approach. At the invitation of Mr Bruning, the two men met in a coffee shop at the Boulevard Hotel on the 18 November. It was his intention to calm the waters after the Carla Hillary reprimand of the previous day. Mr Bruning "didn't want him (the applicant) to dwell on this mistake" and "my reprimand of the previous afternoon." This is how the respondent's witness described the conversation that took place. Bruning: "I just wanted to have a cup of coffee with you today to discuss yesterday afternoon's meeting because I think it is a very important lesson in management skills. I was angry with you yesterday because it is very important that you learn to back your staff just like I have backed you on countless occasions in the past." McKee: "I was unhappy with yesterday's conversation. I didn't like it and I thought it was uncalled for." Bruning: "The way that you treated Margaret Turrell was a serious breach of management etiquette. Hillary had been Margaret's' staff member and had resigned from working with Margaret so you should have consulted with Margaret before recommending Hillary to a Thrifty franchisee who would deal with Margaret and her staff at the airport on a daily basis. McKee: I don't think of it that way but I didn't like the way you treated me anyway. I think it was uncalled for and I'm resigning. Here is my letter of resignation." At this time Mr McKee handed me a sealed envelope which I did not open until Monday, 21 November whereupon I discovered it contained his letter or resignation dated 18 November 1994, a copy of which is annexed hereto and marked "E". After being handed the envelope a conversation to the following effect ensued: Bruning: "Why are you resigning?" McKee: "I do not think I can do the job." Bruning: "Why? Is it because I was angry with you yesterday?" McKee: "No, it is just everything in general." Bruning: "You should consider your future with us. After all you no longer have Tony Harris and Steve Turner interfering with your operations or staff. You can take the kudos from the good job Margaret Turrell is doing for you. Under her management the airport will only get better." McKee: "I know Margaret is doing a good job and will continue to do a good job but I want to move on to bigger and better things. Here is my resignation letter." Bruning: "I will give you time to reconsider your resignation over the weekend. I don't want you to resign. I have spent a hell of a lot of time assisting you to try and get you to the level required to run our operations in New South Wales. I'll tell you what I'm going to do, I will keep the envelope until Monday to allow you to think it over on the weekend." McKee: "I've definitely made up my mind." Bruning: "I'll still keep the envelope until Monday. You may change your mind over the weekend. If you change your mind let me know Monday morning and I'll tear up the envelope and you can continue on as State Manager as though nothing happened." McKee: "Thanks for doing that Bern, but I really don't think I'll change my mind. I'll think about it anyway over the weekend and talk to Laura about it but I don't think anything will change as I know what I'm going to do." Bruning: "What are you going to do?" McKee: "At this point of time I want to keep my plans to myself." Bruning: "Well I'll be sorry to see you go. I believe you had a great chance to make a career with us and you've worked hard over the last two years to get the difficult job of New South Wales State Manager under control but if you have better things to go to, that's your decision." McKee: Well thanks for taking the time to talk to me about it. I'll give you a call on Monday." Deposing in paragraph 42 of his affidavit the applicant described the events of 18 November this way: "On 18 November 1994 I gave one months notice and put my resignation in writing to Bern Bruning. He accepted it with little comment." When cross-examined on Mr Bruning's version of what was said in the coffee shop that day, the applicant's responses consisted of denials, admissions, lack of real recollection plus variations. He said, contrary to what Mr Bruning said and contrary to what was written in his farewell memorandum, that he had no job to go to. The explanation for "something new" in this latter document was "Something new was no job." On the balance of probabilities, I accept the discussion as related by the Managing Director particularly as on the applicant's own evidence the meeting spanned "half an hour or so" and it is just not consistent with the applicant's rendition of events that this period of time would have expired. This is despite the applicant adding, as an afterthought, that one other matter was discussed. As to his allegation that the respondent's representative took the news of his resignation with little comment, the applicant's defence to the evidence given by Mr Bruning: "That's how I saw it as little comment." The final salvo fired by the applicant was that he was not permitted to work out his period of notice. He failed to mention that he received four weeks salary in lieu of notice, the use of the car for two weeks and other monetary entitlements. Mr Jeffrey De Ridder was asked by Mr de Meryick: "Was it normal practice to pay someone out rather than let them perform a period of notice that they had been given?" The witness responded: Yes, we do have a policy that in most circumstances we pay people out. We give them a reasonable pay out figure because that is the nature of our business. It is very competitive. They have access to computer information and in our industry a number of people go to related companies (the applicant came from Avis) so we do try to come to an arrangement where we pay people out." Quite different from the sinister connotation the applicant placed on this circumstance. Scattered throughout the evidence there is a plethora of instances, where the respondent reiterates he had no complaints about the applicant's performance of his duties generally. Mr Bruning's attitude to the applicant's performance can be best summed up in the evidence he gave as follows: "I was unhappy with this particular thing he had done. Just because he has done one thing wrong doesn't mean that you discard a person and I wasn't discarding this person." Findings It must be concluded the applicant resigned not because of the treatment meted out to him by the Managing Director. I find as a fact that he was in conflict with what I regard, as the legitimate management style of his superior. Other factors, I find, inferentially, which led to the applicant's resignation were the stressfulness of the industry and he wished to put into place plans of his own, working as a consultant. He commenced this undertaking but twenty days after he departed from "Thrifty". Should his health have been undermined to the extent he would have the Court believe it might be, a reasonable expectation, he would have taken more time away from the workplace in an effort to regain his equilibrium. He had four weeks salary upon which to support himself for a period in excess of twenty days. To reiterate, the evidence does not support a finding that the situation in which the applicant found himself, applying objective criteria, was not one where the intolerable behaviour of his employer forced him to resign and which at common law would be regarded as a constructive dismissal. There is no evidence that the voluntariness of the resignation was initiated by duress as occurred in Woller -v- Transport Superannuation Board (1989) 4 VIR 353. Finally, there is no evidence that the respondent repudiated the applicant's contract of employment thereby entitling the applicant to treat it as discharged. Nor was there any evidentiary support for a finding that the applicant was placed in a position whereby his choice was between involuntary resignation and dismissal. It is abundantly clear, Mr Bruning did no wish the applicant to resign contrary to Mr de Meyrick's submission. An opportunity presented itself to Mr Bruning to terminate the applicant when he lied as to the state of his knowledge regarding Ms Eccles allegations. That he did not avail himself of this opening is some evidence that Mr de Meyrick's submission has little merit. Mr Bruning gave acceptable evidence on this point. Just shortly before his departure the applicant received a significant pay rise, which was the maximum increase given to any employee under Mr Bruning's control. Another example of this person's good will towards the applicant was the tolerance and understanding he exhibited when the applicant caused considerable damage to his expensive vehicle in a motor accident and in respect of which he was culpable. It thus follows that what occurred instantly was not a termination but a resignation and I so dismiss the application accordingly. Costs Mr Christie, on behalf of the respondent made the following submission: "It is respectfully submitted that costs should be awarded against the Applicant. His allegations which have in most material respects proved baseless and his lies contained in his Affidavit have put the Respondent to considerable expense. It is open to the Court to conclude that the application was made in an attempt to utilise the Industrial Relations Act to obtain some gratuitous payment from the Respondent comparable to the settlement payment made to Mr T Harris on his resignation from the Respondent (see T178.8 and T180.4) so that the Respondent would not have to bear the costs and expenses of defending the application." I reject this submission. However, on the question of costs, Moore J in the case of Canceri -v- Taylor (1994) 55 IR 31 found that this Court has power to award costs subject to the limitations contained in s347 of the Act - that is in a situation where an applicant instituted proceedings vexatiously or without reasonable cause. In considering whether or not the applicant in seeking remedy for termination of employment pursuant to section 170EA be ordered to pay the costs of the respondent on the basis the proceedings were instituted vexatiously or without reasonable cause, I have looked at various authorities on the point. Having worked through this exercise, I am not prepared to find on any version of the facts that the proceeding could be stigmatised as being vexatious. Then it fell for consideration whether or not the application was initiated without reasonable cause. On reflection this was thought not to be so instantly and I was much comforted by what fell from Wilcox J (as he then was) in Kanan -v- Australian Postal Telecommunications Union (1992) 43 IR 257: "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 proceedings as being without reasonable cause........" The application for costs is dismissed. I certify that this and the preceding twenty-six (26) pages are a true copy of the reasons for judgment of Judicial Registrar Locke. Associate: Caroline Sternberg August 1995 Appearances: Counsel for applicant: Mr Rohan de Meyrick Counsel for Respondent: Mr Michael Christie