Dimitrios Jim Giannakenas v Ajax Fasteners [1995] IRCA 530

INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 3571 of 1995 B E T W E E N : DIMITRIOS JIM GIANNAKENAS Applicant AND AJAX FASTENERS Respondent Before: Judicial Registrar Millane Place: Melbourne Date: REASONS FOR JUDGMENT By an application made on 29 June 1995 the Applicant sought compensation and "a better reference and a sworn statement not to breach the contents of the reference" from his former employer, the Respondent, (the June 1995 Application). This is not the first application made by the Applicant in connection with the alleged termination of his employment by the Respondent as a despatcher on 15 December 1994. In proceeding number VI 1268 of 1995 the Applicant sought, in an application filed by his then solicitor Ryan Carlisle Thomas on 25 January 1995, reinstatement and compensation from the same Respondent for the alleged unlawful termination of his employment as a despatcher on 15 December 1994 (the January 1995 application). The January 1995 application was discontinued on the filing by the Applicant of a consent notice of discontinuance on 9 March 1995. The June 1995 application was not resolved before the Australian Industrial Relations Commission at a conciliation conference conducted on 20 July 1995 and was fixed for hearing before the Court on 25 September 1995. The Applicant appeared in person at hearing and gave evidence in support of his June 1995 application. At hearing it was argued by Mr McNab of counsel on behalf of the Respondent that the June 1995 application should be dismissed with an order for costs being made in favour of the Respondent because that application had been commenced without reasonable cause. The matters relied upon by the Respondent to support its opposition to the June 1995 application included:- 1. An allegation that on or about 20 February 1995 during the course of the conciliation conference conducted by a commissioner of the Australian Industrial Relations Commission the January 1995 application was the subject of a binding agreement entered into between the Applicant and the Respondent to settle the s.170EA claim by:- (a) the payment to the Applicant by the Respondent of his superannuation contributions; and (b) the provision by the Respondent of a written reference the contents of which were the subject of negotiation and agreement before the commissioner and were subsequently incorporated in the written reference provided to the Applicant shortly after the agreement to settle (see Exhibit R1). The notice of discontinuance signed by both parties and filed with the Court on 9 March 1995 brought the January 1995 application to an end. Moreover, it was alleged by the Respondent that the terms of settlement were met on the payment of the Applicant's superannuation contributions and the provision of the reference to the Applicant alluding to the matters agreed to by the parties for inclusion in the written document. 2. An allegation in the alternative that pursuant to Section 170EA(3)(a) the Respondent was well out of time for bringing any application to extend the time to make an application in respect of any alleged termination of his employment by the Respondent on 15 December 1994. Because of my findings concerning the settlement agreement and the satisfaction of its terms it has not been necessary to deal with the extension of time issue. On oath the Applicant conceded that there had indeed been a settlement agreement entered into in the terms alleged on or about 20 February 1995 and, with the assistance of the commissioner, the parties had agreed on the matters to be included in the reference, which reference the Applicant received shortly after settlement together with the agreed superannuation payments. Nevertheless, the Applicant alleges that subsequent to these matters occurring and, presumably the consensual filing of the notice of discontinuance, he came to the realisation that the Respondent had not in his view honoured part of the agreement; namely, an alleged undertaking not to do or say anything to prejudice his chances of gaining employment elsewhere. There was no evidence given of any express undertaking to this effect. He referred to no less than 10 job applications which were unsuccessful. The Applicant agreed in evidence that he had no "tangible proof" that the Respondent and, in particular, the Respondent's human resources services manager, Wayne Humphrey Otter (Otter) who was the Respondent's signatory to the reference, had actively or passively prejudiced his employment opportunities with any of the employers to whom he has applied. Apart from his "gut feelings" on the subject the Applicant called no further evidence to establish that the settlement agreement had been breached or had not been entirely satisfied. Otter was the only witness called by the Respondent and as one of the participants in the settlement negotiations as well as the person who arranged for the preparation and forwarding of the reference to the Applicant he was able to confirm the express terms of settlement and the satisfaction of those terms earlier this year. Whilst I am prepared to go so far as to say that a Court should imply a term in the agreement to the effect that the Respondent not speak against the contents of the agreed and written reference if an enquiry is directed to the former employer by a prospective employer, there is no evidence to support the implication of a further term requiring the employer giving the reference to recommend the Applicant or go beyond the statements in the agreed reference on receiving any enquiry from a prospective employer. Even if I am wrong on the abovementioned matters I am satisfied on the evidence before the Court that Otter and the Respondent have not communicated either in writing or orally with any prospective employers of the Applicant; nor has Otter received any messages from such employers which remain unanswered. Otter did tell the Court that it was not his habit to give references for people who did not work directly for him. However, on his evidence that policy so far as the Applicant is concerned has not been put to the test because he has not received any enquiries. Order 22, rule 7 of the Industrial Relation Court Rules says:- "A discontinuance under this Order as to any cause of action shall not, subject to the terms of any leave to discontinue, be a defence to a proceeding for the same, or substantially the same, cause of action." It was not contested that the discontinuance of the January 1995 application was a discontinuance under Order 22 of the Industrial Relations Court Rules. In my view the seeking of compensation in the June 1995 application permits the conclusion that that application is a proceeding for substantially the same cause of action as the January 1995 application particularly where the Applicant sought to re-open the matters surrounding the termination of his employment in December 1994. Clearly Order 22, rule 7 contemplates that Applicants may discontinue proceedings and reissue in certain circumstances without fear of being met with the defence that discontinuance of itself disposes of the cause of action. One of the difficulties arising from this proceeding was whether the Applicant's remedy, if any, really lay in an application to reinstate the January 1995 application because on his evidence the settlement had not been fully satisfied and therefore there was no binding agreement in existence between the parties entitling him to litigate his original claim for unlawful termination of his employment (see Purdue and AWU - FIME v Brown and Hatton Rural Pty Ltd NI 0531 of 1994 and Paul Ellison v Woodlands Piggery NI 0533 of 1995 and Peter Jackson and AWU - FIME v Woodlands Piggery NI 0534 of 1994, all unreported, Wilcox CJ 30 June 1995) (the Piggery cases). On the other hand, the Applicant's claim as set out in his June 1995 application and elaborated on by him at hearing was that apart from compensation for the alleged unlawful termination of his employment he sought to enforce at least one of the alleged terms of the settlement agreement. If such a course of enforcement was adopted it could only be by reference to the Court's accrued jurisdiction. In Watson v Royal Selangor (Aust) Pty Ltd (unreported Parkinson JR, VI 2054 of 1995, 4 July 1995) the Applicant sought to enforce the alleged terms of settlement entered into by the parties in respect to proceedings issued pursuant to Section 170EA of the Industrial Relations Act 1988 (the Act). It was the finding of the Court in that case that the contractual claim arising out of the alleged terms of settlement was not one that it was convenient or appropriate for the Court to hear in its accrued or inherent jurisdiction pursuant to Section 430 of the Act because it did not "...arise out of the same substratum of facts which found the original jurisdiction of the Court pursuant to Section 170EA of the Act." (See page 9 of the unreported decision). Accepting as I do the Judicial Registrar's findings in Watson's case on these matters it seems that any accrued or associated jurisdiction contractual claim which may be the subject of the June 1995 application is not one that should be entertained by this Court. Insofar as any claim exists pursuant to Section 170EA of the Act and could be the subject of an application to reinstate the January 1995 application or, in the alternative, a fresh application as it appears in the June 1995 application, both of which potential applications were dealt with at hearing to dispose of all matters between the parties, the evidence before the Court supports a finding that there was a binding agreement between the parties to settle the January 1995 application and such express terms as there were agreed to were met by the Respondent well before the filing of the June 1995 application. Even if allowance is made for implied terms as far reaching as the Applicant seemed to suggest in his evidence and his oral submissions to the Court there is no evidence to indicate a breach or failure to meet such terms. In the Piggery cases the Respondent failed to pay the settlement sums within a reasonable time (where there was no express term as to the time for performance by payment of the settlement sums) and the failure of the Respondent to pay after some five weeks was on the facts of those cases a breach of the agreement, entitling the Applicants to act on the basis that there was no longer any binding agreements to preclude them from restoring their respective cases to the Court lists for hearing. There is simply no evidence of any breach of the terms of settlement which in this case might entitle the Applicant to act as though there is no binding settlement and re-activate the s170EA claim in this Court or make a fresh application under s.170EA of the Act. Accordingly, the June 1995 application is dismissed and any alternative application for reinstatement of the January 1995 application is also refused. Costs The Respondent argues that it is entitled to costs in respect to the June 1995 application pursuant to Section 347(1) of the Act which provides "A party to a proceeding (including an appeal) in a matter 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." Accepting that the June 1995 application is a proceeding in the sense referred to in Section 347 of the Act (see Gray J's discussion on the meaning of this word in the context of s.347 in Andrews v Uniting Church in Australia Frontier Services trading as Old Timers unreported, 19 September 1995 No D1 198 of 1994) it was argued by the Respondent that the June 1995 application was made without reasonable cause. The test relied upon for determining whether the proceeding was instituted by the Applicant without reasonable cause is that suggested by Chief Justice Wilcox in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 where he says at pages 264 to 265:- "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". The abovementioned test is an objective one and although the unrepresented Applicant expressed a strong belief that the Respondent had in some way prejudiced his chances of obtaining employment with a series of employers to whom he had applied after settlement and presumably after submitting the written reference drafted in accordance with his requirements, he had at the time of instituting his application no more than what he described both from the bar table and in evidence as a "gut feeling" that Otter had in some way prejudiced his chances. This is a Court where the tradition of awarding costs against an unsuccessful party in a proceeding has been expressly overridden by Section 347 of the Act subject to the very limited circumstances already described above. It is with some reluctance that I have concluded that this is an application which was entirely misconceived (see Foxcroft v The Ink Group Pty Ltd 57 IR 65). It is particularly disturbing to note that the Applicant, by his own admissions, knew at all times that he had no factual basis for his assertions and despite this instituted the June 1995 application when there was certainly no prospect of success on those facts. In considering the application for the payment of costs I have also taken into account a letter dated 1 September 1995 forwarded to the Applicant by the Respondent's solicitors giving notice of the Respondent's application for costs. The Applicant was dismissive of both the letter and the application for costs without any attempt to address the question of whether or not he should pay the Respondent's costs of the proceeding. Relying on the abovementioned matters I propose to make an order for costs on the June application in favour of the Respondent. MINUTES OF ORDERS THE COURT ORDERS: 1. That proceeding number VI 3571 of 1995 is dismissed. 2. That the Applicant pay the costs incurred by the Respondent arising out of proceeding number VI 3571 of 1995. AND THE COURT FURTHER ORDERS AND DIRECTS: 3. That the Registrar determine the amount of costs in accordance with the procedure set out in rule 42 of Order 62 of the Federal Court Rules. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding ten (10) pages are a true copy of the reasons for judgment of Judicial Registrar Millane. Associate: Dated: 29 September 1995 Applicant in person. Representative for the Respondent: Fiona Field from MTIA Date of hearing: 25 September 1995 Date of judgment: 29 September 1995