DECISION NO:262/97 INDUSTRIAL RELATIONS COURT OF AUSTRALIA INDUSTRIAL LAW - termination of employment - COSTS - proceedings instituted without reasonable cause - order against Applicant - requests for discovery causing unnecessary costs - costs ordered against solicitor Workplace Relations Act 1996 s.347 CASES: Saddington v Oliver (1994) 121 ALR 601 Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62 Kanan and Australian Postal & Telecommunications Union (1992) 43 IR 257 Canceri v Taylor (1994) 1 IRCR 120 Foxcroft v The Ink Group Pty Limited (1994) 1 IRCR 215 Gasso v Foldway Industries Pty Ltd (unreported, IRCA, Parkinson JR, 29 March 1996) Geneff v Peterson & Others (1996) 19 IR 40 General Steel Industries v Commissioner for Railways (NSW) and Others (1964) 112 CLR 125 Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 Imogen Pty Ltd v Sangwin (1997) 70 IR 254. D'Antuano v Minister for Health, (unreported, IRCA, Ritter JR, 12 May 1997). Nicolson v Heaven and Earth Gallery Pty Limited (1994) 1 IRCR 199 Geros v Professional Steering & Suspension Centre (unreported, IRCA, Murphy JR, 12 December 1995) Bengtsson and AMU-FIME Amalgamated Union v Spikles Pty Ltd (unreported, IRCA, Tomlinson JR, 11 December 1995) Syme v Communitique Pty Ltd (unreported, IRCA, Murphy JR, 29 September 1995) Bagnara v Casino Canberra (unreported, IRCA, Patch JR, 6 July 1995) Sandhu and Ors v Pacific Dunlop Tyres Pty Ltd and Goodyear Tyres Pty Ltd, (unreported, IRCA, Parkinson JR, 2 June 1995) POPE -v- MONTEDEEN PTY LTD No. VI-1610 of 1996 Ryan JR Melbourne 20 August 1997 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI 1610 of 1996 B E T W E E N : DAVID JOHN POPE Applicant AND MONTEDEEN PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Ryan 20 August 1997 THE COURT ORDERS: 1. In respect of the claim of unlawful termination of employment heard on 15 and 16 August 1996, 9 September 1996 and 28 November 1996 and determined 4 August 1997 the Applicant is within 28 days to pay the Respondent costs in the sum of $9,433.50. 2. In respect of requests for discovery made by the solicitors for the Applicant on 19 November 1996 and 21 November 1996 and 28 November 1996 in circumstances outlined in the affidavit of Debra Foulkes sworn 1 August 1997 and in Exhibits DF1 to DF6 of that affidavit and in respect of non-attendance of the Applicant or the Applicant's solicitors at judgment on 4 August 1997, the Applicant's solicitor is within 28 days to pay costs to the Respondent in the sum of $906.00. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Court Rules FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1610 of 1996 B E T W E E N : DAVID JOHN POPE Applicant AND MONTEDEEN PTY LTD Respondent Ryan JR Melbourne 20 August 1997 REASONS FOR JUDGMENT On 4 August 1997 the Applicant's claim for a remedy in relation to alleged termination of employment by the Respondent was dismissed. The application had been heard over four days in August, September and November 1996. Mr Devries appeared as counsel for the Respondent and Mr Martin appeared as counsel for the Applicant on the first three days of the trial. Mr McDonald of McDonald Murholme, the Applicant's solicitors, appeared for the Applicant on the last day of the trial. At the commencement of the trial and at the commencement of the last day of the trial Mr Devries gave notice that the Respondent intended to apply for costs if the application was dismissed. On the final day of the trial he also gave notice of an intention to apply for costs against the solicitors for the Applicant in respect of certain additional demands for discovery made by the Applicant's solicitors on 19th, 21st, and 28 November 1996, that is after the third day of the trial and 1, 8 and 10 days before the last day of the trial. Mr Devries made his applications for costs on 4 August 1997 in the presence of Ms Capasso of McDonald Murholme. At the conclusion of the hearing I indicated that an initial assessment of the evidence suggested that the employment relationship was not that of employer/employee and that the employer did not initiate the ending of the relationship, whatever that relationship might have been. The final judgment stated that it was not necessary to make a finding on whether the Applicant acted as an employee or a consultant because of a finding that the Applicant had failed to demonstrate that the relationship with the Respondent, if it were a relationship of employer/employee, was ended by the Respondent at the initiative of the Respondent as employer. At that time I stated "the overwhelming weight of the evidence is that the Applicant brought the relationship to an end. In the circumstances, the Applicant's claim lacks jurisdiction and must be dismissed". Despite statements to that effect, that is statements that it was not necessary to make a finding for or against a relationship of employer and employee, and indeed it was not necessary, the Court did in effect find that the relationship lacked jurisdiction, not only because any purported employment was not terminated at the initiative of the employer but also because the Applicant was not an employee. In Saddington v Oliver (1994) 121 ALR 601 at 603, Gray J stated: "In a case involving disputed questions of fact, it is simply not possible to determine whether the proceeding was instituted vexatiously or without reasonable cause unless the matter is tried." Here the matters were tried and I have found the application lacked jurisdiction on one ground and indeed found without a formal finding that the application lacked jurisdiction on another ground. This is not a case like Dey v Victorian Railway Commissioners (1948-49) 78 CLR 62 at 91 where Dixson J stated: "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury." This is a case in which the matter was tried and determined. This is a case in which one should apply the test expounded by Wilcox J, as he then was, in Kanan and Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264, a test affirmed in this Court by Moore J in Canceri v Taylor (1994) 1 IRCR 120 at 129. In Kanan at 264, the learned judge 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". I have concluded that even on the Applicant's version of the facts, it is clear that the proceedings would or must fail, and that the proceedings were instituted without reasonable cause, and I note, although this not be necessary, that the proceedings appear to have been instituted with the assistance of the Applicant's solicitors, given the affixation in paragraph 15 to 18 of the application of the solicitors stamp denoting the name of the firm as it then was, the address and the telephone number, and including in handwriting under the stamp, a reference to Mr McDonald as the Applicant's authorised solicitor. I also consider a finding of institution of proceedings without reasonable cause as entirely consistent with Foxcroft v The Ink Group Pty Limited (1994) 1 IRCR 215, Gasso v Foldway Industries Pty Ltd (unreported, IRCA, Parkinson JR, 29 March 1996), Geneff v Peterson & Others (1996) 19 IR 40, General Steel Industries v Commissioner for Railways (NSW) and Others (1964) 112 CLR 125, Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 and a comparatively recent decision of the Full Court of the Industrial Relations Court of Australia Imogen Pty Ltd v Sangwin (1997) 70 IR 254. In respect of Imogen, I take the view, as did the Chief Justice, that if there is a differentiation between vexatious proceedings and proceedings without cause, that the proceedings here were without cause. If there be a difference, I do not find the proceedings vexatious although if they were instituted for a collateral purpose, they might well have been found to be vexatious. I make no such finding - I need not do so. I propose to order costs against the Applicant pursuant to section 347. I turn now to the submission that certain costs should be ordered against the Applicant's solicitors. The Court has a general power to order costs in circumstances where section 347 of the Workplace Relations Act does not prohibit an award of costs. See Canceri's case already cited, see also the analysis of Ritter JR in D'Antuano v Minister for Health, (unreported, IRCA, Ritter JR, 12 May 1997). I have carefully considered the affidavit of Debra Foulkes sworn 1 August 1997 and exhibits DF1 to DF6 of that affidavit. I have also considered the written response of Mr McDonald, both in respect of this submission and the request for costs under section 347. I accept the evidence of Ms Foulkes as deposed in her affidavit, and the confirmation of that evidence in correspondence between the solicitors appearing in exhibits DF1 to DF6. In particular I note and accept paragraph 10 of the affidavit which reads: "The various requests for discovery relevant to the above were made notwithstanding that similar application made during the proceedings were refused by the Court and no attempt was made on the last day of the hearing to use the documents so sought." I note paragraph 11 of the affidavit which reads: "No reason was given for the attempt to have Mr Salvo at court and I verily believe it was made without cause and vexatiously." I note that no reason was given for the attempt to have Mr Salvo at Court, and I note the belief expressed by Ms Foulkes that the request was made without cause and vexatiously. The action of the Applicant's solicitors in requesting further discovery as outlined above and notwithstanding a similar application refused by the Court during the proceeding caused the Respondent's solicitors unnecessary costs, and the solicitors for the Applicant should be ordered to pay those costs. In making such an order I rely on the inherent jurisdiction of the Court and on Canceri v Taylor already cited and on Nicolson v Heaven and Earth Gallery Pty Limited (1994) 1 IRCR 199 and on the following unreported decisions of Judicial Registrars of this Court, Geros v Professional Steering & Suspension Centre (unreported, IRCA, Murphy JR, 12 December 1995), Bengtsson and AMU-FIME Amalgamated Union v Spikles Pty Ltd (unreported, IRCA, Tomlinson JR, 11 December 1995), Syme v Communitique Pty Ltd (unreported, IRCA, Murphy JR, 29 September 1995), Bagnara v Casino Canberra (unreported, IRCA, Patch JR, 6 July 1995) and Sandhu and Ors v Pacific Dunlop Tyres Pty Ltd and Goodyear Tyres Pty Ltd, (unreported, IRCA, Parkinson JR, 2 June 1995). The orders I make today are as follows: (1) In respect of the claim of unlawful termination of employment heard on 15 and 16 August 1996, 9 September 1996 and 28 November 1996 and determined 4 August 1997, the Applicant is within 28 days to pay the Respondent costs in the sum of $9433.50; (2) In respect of requests for discovery made by the solicitors for the Applicant on 19 November 1996 and 21 November 1996, and 28 November 1996 in circumstances outlined in the affidavit of Debra Foulkes sworn 1 August 1997 and in exhibits DF1 to DF6 of the affidavit, the Applicant's solicitors are within 28 days to pay costs to the Respondent in the sum of $906. I think I perhaps ought to indicate how those costs are in fact made up. While this is not part of the order I think it should be part of the judgment. I will indicate that the costs against the Applicant have been determined in accordance with the figures set out in paragraph 12 of the affidavit of Debra Foulkes and the costs ordered against the Applicant's solicitors take account of the costs outlined in paragraph 13 of the affidavit which come to $298 and also take into account these additional costs: counsel's fees in the sum of $450, cost of the preparation of the affidavit $58 and costs of the attendance of the Applicant's instructing solicitor $100. That is how I get the figure of $906. MINUTES OF ORDERS THE COURT ORDERS: 1. In respect of the claim of unlawful termination of employment heard on 15 and 16 August 1996, 9 September 1996 and 28 November 1996 and determined 4 August 1997 the Applicant is within 28 days to pay the Respondent costs in the sum of $9,433.50. 2. In respect of requests for discovery made by the solicitors for the Applicant on 19 November 1996 and 21 November 1996 and 28 November 1996 in circumstances outlined in the affidavit of Debra Foulkes sworn 1 August 1997 and in Exhibits DF1 to DF6 of that affidavit and in respect of non-attendance of the Applicant or the Applicant's solicitors at judgment on 4 August 1997, the Applicant's solicitor is within 28 days to pay costs to the Respondent in the sum of $906.00. 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 4 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 27 August 1997 Solicitors for the Applicant: McDonald Murholme Counsel for the Applicant: Mr A McDonald Solicitors for the Respondent: Kempson & Co Counsel for the Respondent: Mr G Devries Date of judgment: 20 August 1997