KAGIYAMA v SOUTHERN CROSS LIMOUSINE PTY LTD [1997] IRCA 65

DECISION NO:65/97 CATCHWORDS INDUSTRIAL LAW - COSTS - application for costs of review and proceeding before Judicial Registrar - whether proceedings commenced without reasonable cause Workplace Relations Act 1996 ss 170DE, 170DC, 170EA, 347 Imogen Pty Ltd v Anthony Sangwin (unreported, IRCA, Full Court, 20 December 1996). Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Kenji Kagiyama v Southern Cross Limousine Pty Ltd (unreported, IRCA, Marshall J, 6 January 1997) Shackley v Australian Croatian Club (1996) 141 ALR 736 Victoria v Commonwealth (1996) 138 ALR 129 KENJI KAGIYAMA v SOUTHERN CROSS LIMOUSINE PTY LTD No. NI 3562 of 1995

Before: MARSHALL J Place: SYDNEY Date of hearing: 11 MARCH 1997 Date of judgment: 13 MARCH 1997 IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NI 3562 of 1995 B E T W E E N : KENJI KAGIYAMA Applicant A N D SOUTHERN CROSS LIMOUSINE PTY LTD Respondent BEFORE: MARSHALL J PLACE: SYDNEY DATE: 13 MARCH 1997 MINUTES OF ORDERS

THE COURT ORDERS THAT:

1. The applicant pay the respondent the sum of $3200 on or before 4.00 pm on 11 April 1997. Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. NI 3562 of 1995 B E T W E E N : KENJI KAGIYAMA Applicant A N D SOUTHERN CROSS LIMOUSINE PTY LTD Respondent BEFORE: MARSHALL J PLACE: SYDNEY DATE: 13 MARCH 1997 REASONS FOR JUDGMENT On 6 January 1997, I delivered my reasons for judgment concerning the application by Mr Kagiyama to review the exercise of power of Judicial Registrar Locke in which she dismissed his application under s170EA Workplace Relations Act 1996 ("the Act"). I gave my reasons for dismissing the review application but reserved the question of costs. On 11 March 1997, I heard submissions of counsel for each party on the topic of costs. Mr Moore, for Southern Cross Limousine Pty Ltd ("Southern Cross"), submitted that the Court should order that Mr Kagiyama pay Southern Cross' costs of the review and of the application before the Judicial Registrar on the basis that the review and the original application were commenced without reasonable cause. Mr Walsh, for Mr Kagiyama, submitted that the application before the Judicial Registrar and the review were not commenced without reasonable cause. Both counsel referred to s347(1) of the Act which provides as follows: "(1)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." It was not in dispute that the Court has the power to grant costs in respect of the review application. See Shackley v Australian Croatian Club ("Shackley") (1996) 141 ALR 736. It was also not in dispute that the Court has the power, on review, to make a costs order in respect of the proceedings before the Judicial Registrar. See Shackley per North J at 748-749. Further, in the event that the Court determined that a costs order should be made, it was not in dispute that the appropriate amounts were as submitted by Mr Moore; that is $3200 in respect of the review and $4300 referable to the application before the Judicial Registrar. Additionally, there was no dispute as to the appropriate test to be applied to determine whether or not the original application and the review application were each instituted without reasonable cause. That test may be stated as "whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success" such that "where on the applicant's own version of the facts, it is clear that the proceeding must fail". See Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257, 264-265 and Imogen Pty Ltd v Anthony Sangwin (unreported, IRCA, Full Court, 20 December 1996, per Wilcox CJ at 8-9). Mr Moore conceded that prior to the making of the application under s170EA of the Act, Mr Kagiyama had available to him s170DE(2) of the Act which permitted him to submit that although his termination may have been effected for a valid reason, it nonetheless may have been arguably considered harsh, unjust or unreasonable having regard to its effect upon him. By the time of the making of the review application that argument was no longer available to Mr Kagiyama as a result of the judgment of the High Court in Victoria v Commonwealth (1996) 138 ALR 129 in which s170DE(2) of the Act was found to be beyond the constitutional power of the Commonwealth Parliament. At the time of the institution of proceeding under s170EA of the Act, on the facts then apparent to Mr Kagiyama, I do not believe that there was no substantial prospect of him successfully relying upon s170DE(2) of the Act. That is not to say that I believe the Judicial Registrar to have been incorrect in ultimately not finding in his favour in reliance on that sub-section. Rather, prior to the hearing before Judicial Registrar Locke it was not unreasonable, in my view, for Mr Kagiyama to proceed upon an assumption that the submissions made on his behalf in reliance on s170DE(2) of the Act might be accepted. I therefore reject the application of Southern Cross for the costs of the proceeding before Judicial Registrar Locke. When the review application was instituted, the only live issues before the Court were the applicability or otherwise of ss170DE(1) and 170DC of the Act and then, if necessary, the matter of the appropriate remedy. Mr Walsh submitted that it was not unreasonable to institute the review proceeding, even though the relevant facts were not in issue, because the substance of Mr Kagiyama's wrongdoing had been conveyed to his superior, Mr Yura, some two days before the termination and that it was therefore arguable to contend that the termination was not for a valid reason. See Kenji Kagiyama v Southern Cross Limousine Pty Ltd (unreported, IRCA, Marshall J, 6 January 1997 at 5-9). I reject that submission. In my view, if Mr Yura had known the full extent of Mr Kagiyama's wrongdoing, i.e., the identity of the proprietor of the business rival of Southern Cross who had been assisted by Mr Kagiyama, Mr Kagiyama's employment would have been terminated two days earlier and validly so. I am therefore of the opinion that at the time the application for review was instituted, on the basis of the facts then apparent to Mr Kagiyama and essentially not disputed by Southern Cross, there was no substantial prospect of Mr Kagiyama succeeding on the review. Consequently, the Court will order that Mr Kagiyama pay Southern Cross the sum of $3200 constituting the agreed sum referred to earlier in these reasons.