Industrial Relations Commission of New South Wales CITATION: Donavan and Blaze on Stage Pty Ltd [2005] NSWIRComm 1056 APPLICANT Mr Dee Donavan PARTIES: RESPONDENT Blaze on Stage Pty Ltd FILE NUMBER(S): 5385 of 2003 CORAM: Tabbaa C CATCHWORDS: Order for Costs - Frivolous - Vexatious - Unreasonable failure to agree to a settlement Industrial Relations Act 1991 LEGISLATION CITED: Industrial Relations Act 1996 Entertainment Industry Act 1989 Andrew Hugh Peden v. Lake Macquarie Refrigeration Pty. Limited [2004] NSWIRComm 66 General Steel Industries Inc v. Commissioner for Railways (NSW) 112 CLR 125 at 130 Stevens v. Brodribb Sawmilling Company Proprietary Limited (1986) 160 CLR 16 Hollis v. Vabu Pty Ltd [2001] HCA 44 Attorney General v. Wentworth (1998) 14 NSWLR 481 at 487 CASES CITED: Lance Adam Ogston v. Laurieton United Servicemen's Club [2001] NSWIRComm 1018 Bankstown City Council v. Peter John Paris (93 IR 209) Copperart Pty. Ltd v. Marie Rose Martin (68 IR 58) Justin Thomas v. Christie Direct Pty. Ltd [2003] NSWIRComm 25 Four Sons Pty Limited v. Sakchai Limsiripothong (No. 2) (2000) 100 IR 400 Burton v. Shire of Bairnsdale (1908) 7 CLR 76 at 92 HEARING DATES: 02/16/2005 DATE OF JUDGMENT: 05/06/2005 RESPONDENT Mr Rodney Hugh Berry, Solicitor Heazlewoods Bushby International, Lawyers DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: Commissioner Tabbaa 06 May, 2005 Matter No IRC 5385 of 2003 DEE DONOVAN and BLAZE ON STAGE PTY. LTD. Application for costs pursuant to s. 181 of the Industrial Relations Act 1996 DECISION [2005] NSWIRComm 1056 1 The Commission, as currently constituted, dismissed the above claim for want of jurisdiction on 20 December, 2004, having found that the Applicant was not an employee and had, in fact, been engaged as an independent contractor when performing promotion work at the Ryde-Eastwood Leagues Club. 2 On 08 February, 2005, the Respondent filed a notice of motion seeking orders that the Applicant pay the Respondent's costs of the proceedings on an indemnity basis and pay the Respondent's costs of this motion. 3 Mr. Rodney Hugh Berry, Solicitor, continued his appearance on behalf of the Respondent and spoke to an affidavit he had prepared and tendered in the proceedings. Mr. D. Callan, entered an appearance as a friend of the applicant and confined his submissions to the "frivolous and vexatious" aspect of the motion. The Applicant was absent as he had a contractual engagement to perform at the Canterbury-Hurlstone Park RSL Club that morning. Nevertheless, he had submitted a rebuttal and relevant associated documents in defence of the motion. SUBMISSION IN SUPPORT OF THE NOTICE OF MOTION 4 It was submitted that the Applicant was on notice regarding the risk of a costs order being sought against him. On 30 September, 2003, the day following the filing of the application by the Applicant, Mr. Berry forwarded correspondence to him pointing out that the Commission did not have jurisdiction to hear his claim because he was not an employee. The correspondence relevantly added that: ..... If you fail to withdraw such proceedings within 14 days, we will seek instructions from our client to vigorously defend this claim. We reserve the right to tender this letter in support of an application for costs if you proceed with the claim on the basis that the claim is frivolous and vexatious and clearly outside of the jurisdictional scope of the Commission. 5 That contention was further made known to the Applicant in the first paragraph of the employer's reply filed on 13 October, 2003 which read: The Respondent denies absolutely that it was the employer of the Applicant at any time. The Applicant at all times represented himself to the Respondent as an independent contractor, trading under the name of "Dee Donavan Enterprises". The Respondent is a licensed venue consultant and entertainment industry agent pursuant to the Entertainment Industry Act 1989.... 6 Mr. Berry recalled that during the conciliation conference held on 21 October, 2003, he had advised the Commission of the Respondent's intention to seek costs against the Applicant if the latter was unsuccessful in his claim. Following that conference, Mr. Berry wrote on a "without prejudice" basis to Mr. Donavan confirming that intention and indicating that the anticipated legal costs of the Respondent if the matter went to trial would be in the vicinity of $20,000. At that time it was anticipated that three issues may have to be arbitrated - the issue of the claim being out-of-time, whether or not the applicant was an employee or an independent contractor and the merits of the claim. As the Applicant had faxed that correspondence to the Commission on 24 October, 2003, the Respondent sought to rely on its contents. 7 The issue was debated at the further conciliation conference held on 07 November, 2003. On that occasion, the Commission had explained to Mr. Donavan: I have read the correspondence ... it appears to me that all he did was put what I would have told you myself, about your rights and the obligations and the outcomes; what can be expected at the end. So it may seem intimidatory because it's coming from the other side, but in the absence of you having ... anyone represent you from the legal fraternity, or an agent who is familiar with IR, ... it is important for the employer to put you on notice about how far they intend to go. 8 Correspondence dated 14 November, 2003, and headed "Without Prejudice Save as to Costs" was forwarded to the Applicant by Mr. Berry. The Applicant was advised that the Respondent was prepared to settle his claim on the basis that it would provide the applicant with a written reference and each party would bear its own costs of the proceedings provided the Applicant filed a Notice of Discontinuance by Friday, 28 November, 2003. The Applicant had rejected that offer. 9 The intention of the Respondent to seek costs against the Applicant was repeated at the conclusion of the arbitration proceedings on 30 March, 2004 and was acknowledged in the decision of the Commission on 30 December, 2004: The Respondent had, all through this case, repeatedly submitted that there was no merit and no basis to the application made by the Applicant. The Respondent had incurred significant costs which had impacted on her business. On that basis, should the Commission find in favour of the Respondent, then the Respondent wished to make a number of submissions on the issue of costs. 10 The application for costs was based on three grounds - firstly, that a settlement offer had been made which the Applicant unreasonably rejected, secondly, that the Applicant's claim had been frivolous and, thirdly, that the claim had also been vexatious. Conduct of the Applicant 11 The Respondent relied on the following incidents as indications of the manner in which the Applicant had conducted himself throughout the proceedings. 12 Firstly, in relation to the Respondent putting the Applicant on notice, in correspondence dated 21 October, 2003, as to the extent of legal fees the Respondent expected to expend on the proceedings should the matter proceed to conclusion, the Applicant had not only, on 24 October, 2003, disclosed the contents of a "without prejudice" communication from the Respondent but had made unfounded allegations which were not ultimately supported by the Commission. The Commission was reminded by the Respondent of those allegations made in the Applicant's letter, as follows: The letter is offensive and designed to intimidate me into calling off my claim for 'Unfair Dismissal' against his client "Blaze On Stage". I refer you to Paragraph 9 (marked) of the letter wherein a statement has been made by Mr. Berry that I could be up for legal costs amounting to $20,000 if my case against his client is not successful. These gutter tactics are uncalled for as the matter is before the Court. To attempt legal browbeating of this nature as we prepare for a further Hearing is quiet (sic) wrong and I intend to refer the matter to the appropriate authorities. In the meantime, I feel that because Mr. Berry has resorted to this ploy to effect a favourable result for his Client through coercion it is important that this letter be immediately viewed by Commissioner Tabbaa. 13 Mr. Donavan sent a facsimile to Mr. Berry dated 29 October, 2003 advising of what he had done. That had prompted Mr. Berry to write back, on 30 October, 2003, explaining the "without prejudice" rule and seeking a written undertaking that the applicant would not breach that rule in relation to any future communication marked as being "without prejudice". Mr. Donavan's response was to write back on 31 October, 2003 making further allegations which were also not borne out by the proceedings: ... In fact it appears that you could be in breach of the Crimes Act NSW 1900 by attempting to defer a party from exercising their legal rights. May I suggest that you do not insult my intelligence further by resorting to this form of legal blackmail. I am getting a little weary of the harassing nature of your letters and suggest that you conduct yourself, from now on, in a manner that does not bring discredit to both your client and yourself. 14 Secondly, despite the Respondent's communication of 14 November, 2003 setting out an offer of settlement, the Applicant had written to the Commission on 25 November, 2003 making an allegation against the Respondent that was not borne out by the result of the proceedings: I hereby state that I have, since the last Conciliation Hearing, attempted to negotiate a settlement with the Respondent but have found her to be an unwilling party to any form of compromise. 15 Thirdly, the Applicant had made unsubstantiated allegations against the Respondent during the proceedings all of which he had been invited to withdraw but had not done so. At the hearing on 03 February, 2004, he had relied upon a statement he had prepared for the conciliation hearing (on 21 October, 2003): I later found out that the reason I was taken out of these promotions had little to do with management concern but more to do with providing extra work for a male entertainer that M/s Sullivan is personally managing. This was achieved at my expense and I was not happy with the callous way in which it was handled. M/s Sullivan has had a hidden agenda designed to benefit her personally in relation to my loss of previous promotions and my recent dismissal. It is to do with providing employment for persons she is personally managing and providing extra employment at Ryde-Eastwood Leagues Club for a member of her family. This family member has now been installed in what was hitherto my position at the Club. I suggest that M/s Sullivan's statement that my work at the Club was of a poor standard was a ploy to further her own ends. It is offensive to me as a professional person who has always taken a pride in his work to find that she has resorted to gutter tactics to cover her misdeeds.... 16 Fourthly, the Applicant had, in correspondence to the Commission dated 15 January, 2004, made unsubstantiated allegations against the persons who had filed statements in the proceedings in support of the Respondent's case. Once again he had declined an invitation to withdraw those comments: All signatories to these documents have a vested interest in not wanting my application before you for "Unfair Dismissal" to be successful and this is not surprising. What is surprising and extremely disappointing to me is the length that they are prepared to go to win this case and the unsavoury way in which they are attempting to do this. A lot of the comments contained in these statements as to my character are to all intent and purpose slanderous.... Now they are trying to discredit me by painting a picture of incompetence in relation to my work and defaming me in the eyes of the Commission. One can view this manoeuvre as a desperate attempt by a worried Respondent who realises that she has not done the right thing ethically and morally and is now resorting to collusion. 17 The Applicant made unsubstantiated allegations of collusion in the evidence of Mr. John Bogie and Ms Sullivan which he also declined to withdraw: The statement of Mr. John Bogie leaves a lot to be desired. His comments, whilst unfounded, are to be expected when one considers that he and M/s Sullivan have an arrangement that they entered into to their mutual benefit when he retired as Entertainment Manager. In view of this it is not surprising that he should go to bat for her! In presenting his Witness Statement he has set out to discredit me as a respected Professional Entertainer.... 18 Whilst it was conceded that the evidence may show that Mr. Bogie confused Sunday with Saturday, the allegation that Mr. Bogie had made up the following conversation was unsubstantiated and, in fact, the evidence of Mr. McCarthy supported Mr. Bogie's evidence in that respect. The Applicant refused to withdraw the following allegation: He has implicated the General Manager, Mr. Chris McCarthy, in a lie by untruthfully stating that he was told by him to get rid of me from Sunday pm promotions. I was never employed to run Sunday pm promotions at Ryde-Eastwood Leagues Club at any time so all that is contained in this Paragraph has been fabricated by Mr Bogie. 19 Finally, the Applicant did not lead any evidence to support the allegation of defamation and an opportunity to withdraw the allegation was again rejected by the Applicant: Ms Sullivan of Blaze on Stage has surrounded herself with persons who have a vested interest in making sure that the case against her for "unfair dismissal" is overturned. They are endeavouring to achieve this by attempting to defame me in the eyes of the Commission. 20 The Applicant also made unsubstantiated assertions regarding the evidence of Mr. Greg Hayes which he neither proved nor withdrew: Therefore, it doesn't seem in character for him to utter the words contained in his Witness Statement. That is of course unless his Statement was worded for him, which is what I suspect has happened. 21 In relation to the evidence of Margaret McHutcheon, although the evidence showed that there were many complaints against the Applicant, the Applicant refused to withdraw the assertions he had made about her evidence. In particular, he asserted: One must question the inability of Management to produce other written complaints about my work at this Club. The Club's "Suggestion & Complaints Form" is in place specifically for that purpose but no other written complaints have been furnished. Why? Because there were no complaints. 22 Finally, the Applicant also made assertions regarding the statement of Harlan Bestwick about which he neither led any evidence in their support nor agreed to their withdrawal. In particular, He would, unfortunately be under pressure to make the statement he has presented. He would be required to back up the other Witness Statements for fear of losing his job. 23 Fifthly, the Applicant had made certain allegations in the said correspondence regarding the intentions of Ms Sullivan and/or her legal representatives which ultimately were not supported by the outcome of the proceedings: .... The offer by her was not a serious attempt to settle this case but appeared to me a ploy by her Legal Representative to show the Commission that she had made an attempt towards settlement. 24 Despite the fact that the Applicant had not led any evidence to dispute the veracity of the Respondent's evidence, he had refused to withdraw the following assertions: We have always worked in harmony and there is no doubt in my mind that the so-called complaints are a fabrication.... Soon after my dismissal I found that M/s Sullivan had placed her Mother in the positions that I had occupied at the Club. I realise now that the real purpose behind my dismissal was fuelled by self- interest!.... M/s Sullivan's statement referring to her concern about her reputation being tarnished is highly amusing as she herself, through unfair dealings, has brought this about. The Entertainment Industry in this City of hours (sic) is a closely nit (sic) Society. Mutual respect exists between working Professional Performers. It does not sit well with people in the Profession when an Agency such as "Blaze on Stage" tries to assassinate the character of a member of the Profession. A number of well-known entertainers are currently appalled at the treatment that I have received at the hands of M/s Sullivan and the Management of Ryde-Eastwood Leagues Club and if her reputation has been affected it is because of her unfair dealings and she has only herself to blame for that. 25 Finally, it was pointed out that the evidence led from the Applicant's three witnesses bore no relevance to the proceedings. Costs incurred by the Respondent 26 Mr. Berry set out in his affidavit details of the invoices received by the Respondent with respect to legal services provided to it by his firm in defending the applicant's claim. 27 Those invoices amounted to a total of $22,667.65 not including the further expenses incurred, unbilled to date, in relation to reading of the judgement and the present application with respect to costs. Recent Conduct of the Applicant 28 Mr. Berry attached correspondence exchanged between the parties post the decision of 30 December, 2004. In correspondence dated 20 January, 2005, Mr. Berry repeated the Respondent's intention to seek costs against the Applicant. Mr. Donavan was made aware of what the Respondent viewed as errors in the grounds for his Appeal application. He was urged to seek legal advice in relation to that matter as "Significant additional costs will be incurred by our client in defending the appeal and our client will be seeking a costs order against you in relation to those further costs incurred at the conclusion of the appeal". 29 The response from Mr. Donavan, dated 28 January, 2005, referred to a recent telephone call to his home by Mr. Berry. The Applicant indicated that he would be taking the matter up with the Law Society of New South Wales as he considered Mr. Berry's comments to be intimidatory. The Applicant obviously considered that he had not made any errors in the grounds set out in his appeal application indicating that it was a matter for consideration by the designated Full Bench of the Commission. In relation to alleged irregularities in the transcript of the proceedings, the Applicant indicated that he was communicating directly with the Attorney-General's Department in that regard. 30 Mr. Berry had considered the Applicant's response as containing serious allegations prompting him to write to the Applicant on 03 February, 2005 setting out his recollection of the conversation between them as it related to the issue of costs. Once again, Mr. Berry urged the Applicant to seek legal advice so that he may better understand the issues being raised with him. It was pointed out to Mr. Donavan that, absent legal representation, it was considered to be his firm's professional obligation to make him aware of the potential liability he was exposing himself to by his current course of conduct. As had been requested by the Applicant, details of the legal costs expended by the Respondent were provided. Mr. Donavan was put on notice that the Respondent intended to seek costs in relation to the on-going proceedings. 31 On 04 February, 2005, Mr. Donavan wrote to Mr. Berry advising that he had written to the Industrial Registrar on the same day informing him of his decision to withdraw his appeal application. The Applicant had stated that he was hopeful of the gesture being viewed in a favourable light in view of the fact that it would avoid both parties further loss of time and expense. He had attached a copy of his letter to the Industrial Registrar. The Applicant made the point that no serious offer to resolve the matter had been made to him by the Respondent. For his part, he had, on at least three occasions, endeavoured to settle the issue amicably in order to avoid both parties unnecessary time and expense. He alleged that the Respondent had refused to consider settlement on each occasion. Was the Claim Frivolous? 32 The Respondent referred to the decision of the Full Bench of the Industrial Relations Commission of New South Wales in Andrew Hugh Peden v. Lake Macquarie Refrigeration Pty. Limited ([2004] NSWIRComm 66) which establishes the principles relating to the concept of "frivolous": 20 In light of the well established line of authority, and the ordinary meaning of the word "frivolous", we are satisfied that an application under s84 will be frivolous if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter. 21 When those principles are applied to the present case, there is an insufficient foundation for a finding that the application for relief under s84 of the Act was frivolous. So much so is clear from the decision in the substantive matter, where Harrison DP considered firstly, that there had existed an employment relationship which ended at the initiative of the employer; secondly that there was a claim, within jurisdiction, pursuant to s84 of the Act; thirdly, that a "family and friends" policy existed as between the respondent and the appellant; and fourthly, that the policy did not apply to the work performed by the appellant for Mr. Chapman; and consequently, that the application must fail. 33 It was emphasised that the first of the issues to be considered was the existence of an employment relationship. In Peden, the applicant had been found to be an employee. In the decision of the Commission in the present matter, the finding made was far more fundamental in its basic elements because a determination was made that the Applicant had been engaged as an independent contractor when performing promotion work at the Ryde-Eastwood Leagues Club. 34 The Full Bench in Peden had referred to the decision of Barwick FJ in General Steel Industries Inc. v. Commissioner for Railways (NSW) (112 CLR 125 at 130): On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. 35 There was considerable legal argument in the present case but it had nothing to do with the merits of the claim. It related to the Applicant's status which ultimately determined that the Commission had no jurisdiction to hear the claim at all. 36 Mr. Berry referred to the Applicant's written submissions in the original proceedings to demonstrate "the utter futility or the manifest groundlessness" of the Applicant's case. In referring to particular sections of that submission, Mr. Berry pointed out that the Applicant was arguing concepts of fairness and justice but was not relying on any recognised legal principle that the Commission could apply and find in his favour. 37 It was submitted that the Applicant lacked an understanding of the current state of the law. He was relying purely and simply on the Common Law control test. The current state of the law is best set out by the High Court of Australia in Hollis v. Vabu Pty. Ltd. ([2001] HCA 44), and prior to that, in Stevens v. Brodribb Sawmilling Company Proprietary Limited ((1986) 160 CLR 16), both of which clearly indicate that, since 1986, the control test is but one of a range of tests which determine whether a person is an employee or a contractor. 38 The Applicant responded to all of the Respondent's witness statements with a statement to the effect that he had never been approached about the standard of his work, had never been afforded the entitlements of an employee, had been subject to control over every aspect of his work and had received training at the Club arranged by the Respondent. It was pointed out that the summary was not factually correct and the evidence that had been put before the Commission had not supported it. It was submitted that the claim was manifestly groundless and was brought frivolously. 39 His various attempts at putting the Applicant on notice about his position were considered by the Applicant to be intimidation. Nevertheless, he had been put on notice about the issue of costs and he had blatantly continued with the claim which, had he obtained legal advice, he would have realised that it was without foundation. Was the claim Vexatious? 40 The Respondent relied on the decision of Roden J. in Attorney General v. Wentworth (((1988) 14 NSWLR 481 at 487) as authority for the definition of "vexatious": It seems then that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the test may be expressed in the following terms: 1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought. 2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues for which they give rise. 3 They are also properly to be regarded as vexatious if, irrespective of a motive of a litigant they are so obviously untenable or manifestly groundless as to be utterly hopeless. 41 It was submitted on behalf of the Respondent that the issues raised earlier in the affidavit of Mr. Berry revealed that the assertions made by the Applicant were unsupported by the evidence, were without foundation and the only purpose they could have achieved was to discredit or embarrass the Respondent. The Applicant had made assertions about the Respondent being callous, using gutter tactics, covering up her misdeeds, engaging in collusive activity, engaging in conspiracy, and engaging in the fabrication of evidence - in other words, a very serious allegation of perjury. The Applicant had been provided with an opportunity to withdraw all of those assertions and he had refused to do so. 42 The Applicant had referred to the reaction of other members of the profession to the treatment he had received from the Respondent. It was submitted that it was a clear attempt by the Applicant to both discredit and embarrass the Respondent in ways that he had no foundation for. 43 It was submitted that the actions of the Applicant were much more than those of an Applicant presenting a case in a strident manner. Without any evidence whatsoever, the Applicant was in fact slandering, attempting to embarrass and questioning in a most serious way the conduct of the Respondent. The Applicant had not only refused to withdraw those allegations, he has continued to make them. He was displaying an ongoing conduct of a vexatious variety designed specifically to embarrass the Respondent. 44 It was further submitted that, even if the Commission is to find that there was no deliberate intent, it is still required to consider whether objectively this was a case that was obviously untenable. 45 Despite the Applicant's views as to the motive for doing so, Mr. Berry had written to him and duly warned him about the issue of costs. The Applicant had continued with his conduct in full knowledge of what the consequences might be. Unreasonable Failure to agree to a Settlement 46 The Respondent relied on the decision in Lance Adam Ogston v. Laurieton United Servicemen's Club ([2001] NSWIRComm. 1018) in which it was held that - 62. Section 181 of the Act and Part 27 of the Rules should not operate so as to permit conduct on the part of any representative appearing before the Commission to be immune from prosecution for established acts of wrongdoing. In this instance, the conduct of the Liquor Union was undeniably vexatious, and plainly wrong. It ensured that costs were incurred improperly and without reasonable cause, and should therefore be the subject of penalty in respect to such costs. 47 Although the original offer made to the Applicant on 14 November, 2003 was not strictly in accordance with the rules at s. 168 in that it was not left open for the requisite time, it was, nevertheless, an offer that was reasonably made and unreasonably rejected. It had been made after the second conciliation conference after the Respondent had made it clear on both occasions that the Commission had no jurisdiction to deal with the claim. 48 The Respondent considered that the claim was entirely without merit and had made known its intention to seek costs because of the legal costs it was incurring in defending it. For that reason, despite the fact that the offer did not include a payment of money, there was real consideration in that it contained an escape clause for the Applicant in relation to the payment of costs. 49 In Ogston, the Full Bench cited with approval the decision of the Full Bench of this Commission in Bankstown City Council and Peter John Paris (93 IR 209) as not only authoritative support for a logical and practical interpretation of the provisions of s. 181(2)(c) of the Act but also for its "consideration of the reluctance that the Commission would logically apply before granting any award for costs against a Party to unfair dismissal proceedings...": Construing the relevant part of s 181 (2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of the party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonable to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181 (1) are available for exercise. 50 Mr. Berry contended that the first paragraph meant that s. 181(2)(c) was enlivened not only where an offer has been made and has been rejected, but also where no offer has been made but there is an attempt to conciliate and the conduct of the other party demonstrates an unwillingness to participate in discussions. 51 Mr. Berry further contended that the second paragraph meant that the legislature intended for caution to be exercised when considering applications for costs orders. However, where the circumstances are appropriate, there should be no fear or tendency for caution to make appropriate costs orders. It was submitted that the present case would be the clearest example of circumstances in which costs orders were appropriate. It was further submitted that it would be unfair to expect the Respondent to bear the considerable costs incurred in defending a claim where the Applicant "was simply impervious to reason. He refused to listen and he did so at his own peril...". 52 In summary, it was submitted that there were reasonable grounds for making the application for costs on all three bases - that the application was brought frivolously, vexatiously and the Applicant had failed to agree to an offer of settlement. SUBMISSION IN DEFENCE OF THE NOTICE OF MOTION 53 Mr. Donavan forwarded to the Commission a statement dated 13 February 2005 and headed "Rebuttal of Affidavit of Mr. Rodney Hugh Berry in support of his application for costs before Commissioner Tabbaa on 16th February 2005". Attached to it was an annexure dated 18 November, 2003 which evidenced a settlement offer made by the Applicant to the Respondent. 54 Mr. Donavan pointed out that at no time had the Commissioner ruled during the first two conciliation conferences that his claim had been in any way frivolous or vexatious. If the Commission considered that it was so, then reason would suggest that the matter would not have been allowed to proceed further. 55 It was submitted that there was not the slightest shred of evidence to support Mr. Berry's claim that it was so! Whilst it was appreciated that he had the right to make such an application, the manner in which the Respondent's representative had gone about it left a lot to be desired. It was pointed out that when his affidavit is eventually considered by a higher Court, it will become blatantly obvious that there were no grounds for such a claim. The Applicant pointed out that despite his Honour, Mr. Justice Walton, issuing Mr. Berry with a caution as the question of costs, he has insisted on pursuing that course of action. The Respondent's own actions could therefore be viewed as being vexatious. 56 Mr. Donavan argued that the correspondence to him dated 30 September, 2003 was irrelevant for two reasons. Firstly, the Commission had not determined whether or not he had been an employee of the Respondent firm and, secondly, Mr. Berry had not furnished him with any evidence in support of the contention that he had not been an employee. He had therefore considered the issue of costs raised in that correspondence as a "veiled threat" to induce him to abandon his claim. For those reasons, his response in that regard could not be viewed as frivolous or vexatious. 57 It was submitted that the contents of the Employer's Reply relating to his trading name and to the contention that he had represented himself to the Respondent firm as an independent contractor were irrelevant to the present application. 58 Putting the Applicant on notice at the first conciliation conference that the Respondent intended to seek costs against him was viewed as premature. 59 The Applicant submitted that forwarding correspondence to him providing an estimate of the Respondent's legal costs was considered to be both a ploy to intimidate him and out of order. 60 In response to the submission that he had divulged the contents of correspondence marked "without prejudice", the Applicant referred the Commission to his response in which he had advised Mr. Berry that he "could be in breach of the Crimes Act NSW 1900 by attempting to defer a party from exercising their legal rights". He had suggested that Mr. Berry was resorting to "legal blackmail" and drew his attention to the reference to the term "without prejudice" in the current Butterworths Legal Dictionary. Mr. Donavan argued that, in the circumstances, he had a right to reply as he had not appreciated the tone of that letter. In any event, Mr. Donavan submitted that he had obtained legal advice and the issue was not relevant to the current proceedings. Mr. Donavan further submitted that the statement made by the Commission assuring him that Mr. Berry had an obligation to put him on notice as to the Respondent's intentions should the claim fail was of no relevance to the current application. 61 The repeated reference during closing submissions to the Respondent's intention to seek costs was, it was contended, intimidatory and should not have been allowed. 62 The so-called settlement offer made in correspondence dated 14 November, 2003 could not be regarded in any way as a serious attempt to reach a settlement. In his reply of 18 November, 2003, he had rejected the offer on the basis that no mention had been made of monetary compensation. He had countered with an offer he would have been prepared to settle on. 63 Mr. Berry had attached correspondence to him from the Applicant dated 25 November, 2003 in support of the application for a costs order. The correspondence had not been marked as being "Without Prejudice". Mr. Donavan's reply to that part of the Respondent's submission was, to say the least, perplexing: Paragraph 14: This is of concern to me! Copies of letters sent to the respondent verifying my willingness to settle were forwarded to the Commission and the originals were read out at hearing and handed to the Commissioner. It would now appear that only a number of transcript files are missing but Documents as well! 64 Mr. Donavan insisted that his dismissal had been fuelled by self-interest and refused to withdraw what he described as statements of fact. He submitted that most of the statements submitted by the witnesses for the Respondent had not been supported by evidence. He contended that Mr. Bogie had knowingly committed perjury in relation to the evidence that he had lost the Club a sum of money during a Sunday promotion. Ms Sullivan had been unable to produce an invoice in support of that evidence. Mr. Hayes had later given evidence that it was he who had been engaged for the Sunday promotions. He did not accept Mr. Berry's submission that Mr. Bogie had confused Sunday with Saturday. 65 The Applicant stood by his statement that he had been dismissed from his position to provide employment for Ms Sullivan's mother. He questioned how he can be classed as an independent contractor when his replacement had been deemed to be an employee. He insisted that the method of invoicing had been at the request of the Respondent and should not have been a factor in determining whether or not he was an Independent Contractor. 66 He further stood by his statement that Mr. Hayes had not written his own statement. He concluded that Mr. Hayes must have signed a statement prepared for him by someone else because he and Mr. Hayes had a mutual professional respect for each other and it was out of character for him to write the words expressed in his Statement. 67 Mr. Donavan was perplexed as to why Margaret McHutcheon featured in Mr. Berry's affidavit as there was no mention of her at the hearings nor had she tendered a statement in the proceedings. 68 Once again, the Applicant insisted that he would not withdraw his comments that Mr. Bestwick had been under threat of losing his job if he did not back up the statements of other witnesses of the Respondent. Mr. Donavan pointed out that, at the time of his dismissal, Mr. Bestwick had been newly appointed as a Functions Manager and therefore was not in a position to make comments about his work ethic over the period of the 18 months that he had been engaged at the Club. 69 He submitted that the evidence of Mr. David Callan, Mrs. Pamela Miller and Mr. Phillip Miller had relevance to the proceedings not only in attesting to his character but, more importantly, in providing confirmation of his performance whilst engaged at the Club over the 18 month period. 70 In relation to the legal costs allegedly expended by the Respondent, the Applicant submitted that Mr. Berry had failed to comply with his request for the production of evidence of such payments to his law firm. 71 In conclusion, the Applicant pointed out that he had, on three separate occasions, demonstrated to the Respondent a willingness to settle the claim in a reasonable manner. On each occasion, the Respondent had not been prepared to negotiate. The Applicant alleged that he had suffered both financial hardship and, to a certain degree, health issues as a result of his dismissal. Frivolous and Vexatious 72 Mr. Callan submitted that Mr. Berry was confusing precedent with statutory interpretation. It was submitted that the authorities cited related to whether those individual cases were frivolous or vexatious. It was pointed out that the courts adopt the ordinary or common meaning of the relevant terms and, for that reason, he had confined himself to the latest editions of Websters Dictionary, the Oxford English Dictionary and Macquarie English Dictionary which "closely synonymously define frivolous as being without foundation, without substance and vexatious as intended to annoy". 73 Mr. Callan questioned how one can classify an attempt to recover substantial lost income due to breach of contract as being without substance? It was alleged that Mr. Donavan had declined several engagements as he had expected to remain with the Respondent firm over the following six months. 74 It was submitted that every defendant would find court proceedings uncomfortable or annoying but that did not make the proceedings frivolous or vexatious. Pending the outcome of the appeal proceedings before his Honour, Mr. Justice Walton, it was still undecided as to whether Mr. Donavan had been an employee or an Independent Contractor. CONSIDERATION 75 The Commission's power to award costs in Part 6, Ch.2 proceedings is set out in s. 181 of the Industrial Relations Act 1996 which relevantly reads: 181 (1) Subject to the rules of the Commission and any other Act or law: (a) the Commission may award costs, and (b) costs are in the discretion of the Commission, and (c) the Commission may determine by whom and to what extent costs are to be paid, and (d) the Commission may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis. 181 (2) However, the Commission when it is not in Court Session may award costs only in the following cases: (a) .....; or (b) .....; or (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair Dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or (d) ..... 181 (3) …. 181 (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Commission, and (b) …… 76 The above provisions make it clear that in order for a costs application to succeed pursuant to the above provisions, one or more of the following requirements needs to be met. The Commission must be satisfied, firstly, that the application was frivolous or, secondly, that the application was vexatious or, thirdly, that a party had unreasonably failed to agree to a settlement. The Commission has been asked by the Respondent to determine that the claim by Mr. Donovan met each of those requirements. 77 A Full Bench of the Industrial Relations Commission of New South Wales, in Copperart Pty. Ltd. v. Marie Rose Martin (68 IR 58), considered the parallel provisions to s. 181 contained in the Industrial Relations Act 1991 and concluded: .....It is clear that, in a scheme where costs are not the usual regime, the part of the Act contemplates and apprehends two distinct propositions: · that costs are not the automatic outcome of a refusal to settle; · that under certain circumstances costs are appropriate. …settlement is a dynamic question which must be pressed on the opposing party if the submission that there has been an unreasonable failure to settle is to be used to ground an application for costs. Unreasonable Failure to agree to a Settlement 78 The Appeal Bench in Bankstown City Council v. Paris discussed the relevant provisions in detail and held that the legislative intention of ss. 181(2)(c) of the Act is to encourage the settlement of unfair dismissal claims: Section 181 (2)(c) on its face is a provision which is designed to apply only to unfair dismissal proceedings. It is the only provision designed to be applied specifically in that context. Also, when read in terms of the other provisions in the Act as to costs, it is one of only three provisions which may have application to unfair dismissal proceedings. The other provisions are paragraphs (a) and (b) of s 181 (2). However, those provisions apply to many other proceedings before the Commission and, unlike the particular limb of s 181 (2)(c) relied on in this application, they are designed to operate where the Commission considers either the application itself, or the institution of the proceedings, was affected by considerations which made it manifestly inappropriate for the proceedings to have been commenced. The relevant part of s. 181 (2)(c), on the other hand, does not require the Commission to focus upon the circumstances of the commencement of the proceedings, or to consider only the situation of the applicant. Instead the Commission is required to consider in a more general way, the conduct of the party in respect of which an application for costs is made; and, in that regard, to consider the conduct of the party in relation to the question of settlement of the claim. An understanding of the meaning and purpose of s. 181 (2)(c) is assisted by reference to the particular provisions in Part 6, Unfair Dismissals, of Chapter 2 of the Act, which relate to conciliation or settlement of unfair dismissal applications. Section 86 for example, provides: The Commission must endeavour, by all means it considers properly necessary, to settle the applicant's claim by conciliation. Section 87 (1) is also relevant. Its effect is to preclude the Commission from proceeding to determine the claim by arbitration until "all reasonable attempts to settle the applicant's claim by conciliation have been made but have been unsuccessful". Section 87 (2) continues the statutory emphasis upon conciliation by specifying that the earlier provisions do not prevent further conciliation from being attempted at any time before the Commission makes an order in the proceeding. Construing the relevant part of s 181 (2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed unreasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad power and discretions under s. 181 (1) are available for exercise. 79 Thus, in relation to an alleged failure to agree to a settlement, a positive finding needs to be made by the Commission that a party to the proceedings had rejected a reasonable settlement of the claim and/or the conduct of a party could be said to be inconsistent with an intention to settle the claim. In addition, the Bench in Paris acknowledged that the legislature intended for caution to be exercised when considering applications for costs orders except where circumstances were appropriate in which case the power should be exercised without fear or tendency for caution. 80 The Applicant has been on notice from the Respondent, since 30 September, 2003, that a costs application would be made on the basis that the claim is frivolous and vexatious and outside the jurisdictional scope of the Commission. 81 Further clarification of the Respondent's position was provided in the Employer's Reply to the Application which was filed on 13 October, 2003. The Respondent had pointed out that the Applicant was an independent contractor and had traded under the name of Dee Donovan Enterprises and the Respondent was a licensed venue consultant and Entertainment Industry Agent pursuant to the Entertainment Industry Act 1989. 82 During the conciliation conference on 21 October, 2003, the Respondent had once again repeated its intention to seek costs against the Applicant if the claim was unsuccessful. The applicant offered to settle his claim for $1200 and that was rejected by the Respondent. 83 The Respondent's Solicitor wrote to the Applicant on the same day on a "without prejudice" basis confirming the filing schedule, setting out an estimate of the Respondent's costs should the matter proceed to arbitration on the merit argument and the preceding threshold issues, and referred the Applicant to the website where he could obtain further information on the Entertainment Industry Act. The Applicant had disclosed the contents of that communication to the Commission and had taken offence at being put on notice in regard to costs as he considered such action to be intimidatory. 84 The issues raised in that correspondence were debated before the Commission on 07 November, 2003 and once again the claim was unable to be resolved. 85 The Respondent made a written offer on 14 November, 2003 to settle the claim by providing the Applicant with a written reference and agreeing to each party bearing its own costs of the proceedings provided the Applicant filed a Notice of Discontinuance by no later than 4 pm on 28 November, 2003. 86 Mr. Donovan responded on 18 November, 2003 rejecting the offer but proposing that a payment to him of $1200, representing the payment of one month's notice of termination of employment, would settle his claim. The Applicant gave the Respondent 48 hours in which to respond to the offer. 87 Rule 168 (3) of the Commission's Rules provides that the time an offer is left open to be accepted must not be less than 28 days after it is made. Both parties had failed to comply with the Rules in that regard. The Respondent acknowledged that it had not complied with the Rules and further acknowledged that the offer had not included a payment of money. It was submitted by the Respondent, nevertheless, that the decision in Paris meant that s. 181(c) was enlivened whenever any attempt has been made by a party to conciliate and the other party demonstrates an unwillingness to participate in discussions. The Respondent's offer, it was submitted, was reasonably made and unreasonably rejected. It had been preceded by two conciliation conferences during which the Respondent had quite clearly indicated that the position it adopted was that the Commission had no jurisdiction to deal with the claim. The Respondent had also made it known that the claim was entirely without merit and it would be seeking the legal costs incurred in defending it. Therefore, it was concluded that the element of consideration was present in that the offer contained an escape clause for the Applicant in relation to the payment of costs. Despite the Respondent's offer of 14 November, the Applicant wrote to the Commission on 25 November pointing out that he had, since the last conciliation hearing on 21 October, attempted to negotiate a settlement with the Respondent but had found her to be an unwilling party to any form of compromise. 88 His Honour, Sams DP, in Justin Thomas v.Christie Direct Pty. Ltd. [2003] NSWIRComm 25, quoted with approval the judgement of the Full Bench of the Commission in Four Sons Pty. Limited v. Sakchai Limsiripothong (No. 2) (2000) 100 IR 400 which discussed the obligations imposed on parties to s. 84 proceedings: The obligations imposed on parties to proceedings under s 84 of the Act, as identified in the Full Bench judgment in Bankstown City Council v. Paris requires parties to such proceedings to undertake a responsible and careful assessment of the prospects of the litigation, in the absence of which an unsuccessful party may realistically face the prospects of a costs order being made against it. In those circumstances, it may often be appropriate for a party to consider making an offer to settle, even if the offer could be seen, either with the benefit of hindsight or otherwise, to be at a rather low level. However, the making of such an offer on "the low side" does not exhaust the responsibilities of a party to reasonably attempt to settle the claim. .... 89 Mr. Donovan did not demonstrate to the Commission or indeed to the Respondent that he had made any attempt to undertake a responsible and careful assessment of the prospects of the litigation, particularly as he had been given ample notice of the Respondent's intention to pursue its costs should it succeed in its defence of the claim. He had not addressed the Commission on the impact on his claim of the relevant provisions of the Entertainment Industry Act. He had been advised by the Commission, during the conference on 21 October, 2003, that he needed to address that issue. 90 Mr. Donavan had been in receipt of the Respondent's witness statements since 19 December, 2003, just under three months prior to the hearing. He was therefore aware of the evidence that had been gathered against him. The witnesses called by Mr. Donovan provided character references only. He made assertions from the bar table on matters which he did not put to the Respondent's witnesses. In one instance, he made assertions that a statement had been written out for the witness by a third party but declined an opportunity to cross-examine that witness. 91 The Commission is required to provide an Applicant with redress in the form of either reinstatement, or re-employment or compensation in the event of a successful arbitration of a claim. However, during conciliation, the parties may settle a claim by agreeing to a package of terms which may, or may not, include monetary compensation. For example, the parties may agree on a mutual non-disparagement undertaking, on the withdrawal of the termination and the subsequent tender of a resignation by the Applicant, on the provision of outplacement services, on the tender of an apology by a Respondent, on re-instatement, or re-employment or on monetary compensation, and so on. 92 In the present case, the question as to whether the Applicant had been unfairly dismissed turned on the issue as to whether he had been engaged as an independent contractor or as an employee. It was made clear from the outset that the Respondent was reticent to enter into any form of monetary compensation as a matter of principle. The Respondent had 3000 entertainers on its database, of who between 100 and 200 are regularly placed. Such payment would be considered to be akin to an acknowledgement that they were all employees, a precedent which it intended to vehemently oppose. As there had been an issue with the Club as to the Applicant's performance, the Respondent offered to provide the Applicant with a written reference and to bear its own costs. The Applicant had made it abundantly clear during the conciliation proceedings on 21 October, 2003 that he was seeking to clear up the accusations about his work as he was concerned about his professional standing. 93 In view of the above and the finding I made earlier that the Applicant had been engaged as an Independent Contractor, I find the Respondent's offer demonstrates a reasonable attempt to settle the claim. Was the Claim Vexatious 94 As to what constitutes a frivolous or vexatious claim, those terms were discussed by the High Court in detail in General Steel Inc. v. Commissioner for Railways (NSW) and ors.: The test to be applied has been variously expressed: "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; so to speak apparent at a glance. .......... On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. 95 Although the then Chief Justice was referring to the initiating documents filed in those proceedings, the judgement provides a guide as to the stringent assessment of a claim of vexatiousness in the conduct of any litigant. 96 The Applicant admitted, during cross-examination in the earlier proceedings, that Ms Sullivan had advised him on every occasion that she relieved him of a promotion that management of the Club was not happy with his work. He had been relieved of three such promotions. 97 Mr. Bogie, previous Entertainment Manager with the Club, gave evidence in the earlier proceedings that he had received several complaints from patrons and Entertainers about the Applicant. In addition, the General Manager and several Directors of the Club and their wives had requested the Applicant's removal. 98 Mr. Hayes gave evidence in the previous proceedings that he was an Entertainer who, like the Applicant, also undertook promotional work. He had sometimes swapped shifts with Mr. Donovan yet he considered himself to be a sole trader. He, too, had knowledge of the complaints being made against the Applicant by patrons and fellow Entertainers. 99 Ms McHutchison gave evidence, also in the earlier proceedings, that patrons would comment to her with relief about his absence on days when the Applicant was not working. 100 Mr. McCarthy, former Secretary/Manager of the host Club gave express evidence that he had instructed the Respondent to relieve the Applicant from the promotion work at the Club because of the complaints he had received about him. 101 Mr. Bestwick, Secretary/Manager of the host Club, confirmed in the earlier proceedings that he had spoken to the Applicant about deficiencies in his performance. He described the applicant's behaviour as unco-operative, overbearing, refused to accept any blame for errors, talked over people and refused to listen. 102 Despite all of the above, and despite the fact that he had been unable to dispute the veracity of the evidence of those witnesses whom he had an opportunity to cross-examine, Mr. Donovan continued to make unsubstantiated assertions against the Respondent of perjury, bias, collusion and defamation. 103 Mr. Hayes, another Entertainer/Promoter who had given evidence in the earlier proceedings, was alleged by the Applicant to have signed a witness statement prepared and put in front of him by a third party. The assertion of fabrication of evidence was put down to the fact that it was out of character for Mr. Hayes to write the words expressed in his Statement and apart from that, Mr. Donovan and Mr. Hayes had a mutual professional respect for one another. It is interesting to note that Mr. Donovan did not cross-examine Mr. Hayes whatsoever and certainly did not take the opportunity, despite being in possession of his statement for approximately three months prior to the hearing, to clarify its authenticity. On that basis, I refute completely the allegations made by the Applicant against Mr. Haye. 104 The Applicant asserted that Mr. Bestwick was under threat of losing his job if he failed to back up the Respondent's witnesses. That assertion was made because the Applicant was of the belief that Mr. Bestwick was not qualified to give evidence against him considering he had been newly appointed at the Club when his dismissal occurred. Mr. Bestwick was employed by the Club in May 2003 and the Applicant was dismissed in September 2003. As Entertainment Manager, he dealt directly with the Applicant and gave evidence of discussions he had with the Applicant regarding deficiencies in his work. Mr. Donovan had an opportunity to put such an assertion to him during cross-examination and did not do so. On that basis, I reject the applicant's assertions in relation to Mr. Bestwick. 105 Opportunity after opportunity were provided by the Respondent to the Applicant to withdraw those unsubstantiated assertions but the Applicant chose to stand by his statements. 106 Mr. Donavan insisted that part of his promotions had been given to the Applicant's mother. Yet Mr. Donovan made no attempt to provide the Commission with any evidence as to that so-called employment relationship except to make submissions from the bar table. 107 Mr. Donovan was aware, nearly three months prior to the hearing, of the evidence to be given against him. He had a choice - either agree to a reasonable settlement of the claim in the circumstances or prepare to draw from the Respondent's witnesses evidence of the assertions he intended to make from the bar table. He did neither. One can only come to the conclusion that he could not refute that evidence and, from the extremely offensive assertions made from the bar table, that the conduct of the Applicant was vexatious. Was the Claim Frivolous? 108 In Peden, the Full Bench noted the term "frivolous" was defined in the Oxford English Dictionary as "of little or no weight, value, or importance; paltry, trumpery; not worthy of serious attention: having no reasonable ground or purpose". The Bench went on to add that it was satisfied that an application under s 84 will be frivolous if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter. 109 The general principle is that every litigant has a right to have his or her claim heard and determined unless it is so obviously untenable that it cannot possibly succeed (per Barton, O'Connor, Isaacs and Higgins JJ in Burton v. Shire of Bairnsdale (1908) 7 CLR 76 at 92): Prima facie, every litigant has a right to have matters of law as well as of fact decided according to the ordinary rules of procedure, which give him full time and opportunity for the presentation of his case to the ordinary tribunals, and the inherent jurisdiction of the Court to protect its process from abuse by depriving a litigant of these rights and summarily disposing of an action as frivolous and vexatious in point of law will never be exercised unless the plaintiff's claim is so obviously untenable that it cannot possibly succeed. 110 Mr. Berry, in correspondence dated 13 October, 2003, referred the Applicant to the provisions of the Entertainment Industry Act 1989, drawing his attention particularly to the definitions of "entertainment industry employer" and "Venue Consultant". The Applicant had ample notice that he had to consider the relevant provisions of that Act carefully and address them in arbitration proceedings. Mr. Donavan considered all the Respondent's approaches to him as intimidation. He did not make any submissions in relation to the provisions of that Act during the earlier proceedings that would assist the Commission in reaching a contrary interpretation to that offered by Mr. Berry. I do not consider the actions of the Respondent as intimidatory - it was within the ambit of normal exchange of correspondence between parties during negotiations. 111 The Applicant referred, on a number of occasions, to consultations with his Solicitor regarding the claim. Yet, in attempting to make out a case before the Commission, Mr. Donovan relied solely on the Common Law control test and on definitions in a Legal Dictionary to support his arguments. 112 The Applicant had an opportunity to test the assertions that his performance was substandard and he did not take it either in the effective cross-examination of the Respondent's witnesses or by the provision of his own witnesses. His failure to do so leads to the conclusion that his claim was without foundation and therefore frivolous. 113 Had the Applicant's claim not failed for want of jurisdiction, it would have failed on the grounds that he had not made out his claim. I am satisfied that despite the Applicant's stated belief that he was an employee, there were no grounds on which he might have realistically expected his claim to succeed. DECISION 114 Having considered the totality of the evidence before the Commission, both in the substantive matter and the Notice of Motion, I am disposed to the view that not only was the application brought frivolously and vexatiously, but the Applicant had "unreasonably refused to settle the claim". 115 The Commission therefore determines to award costs against the applicant. In determining the quantum of costs to be awarded, the Commission has borne in mind the following: Firstly, the Applicant has no expertise in the field of industrial relations or the law and secondly, the Applicant needed to satisfy himself, when preparing for his case that reliance on the Common Law was not enough and that he needed to address the Commission on the provisions of the Entertainment Industry Act. 116 If the Applicant was not convinced of the futility of his case by that time, he ought to have become aware of it when he received the Respondent's statements. Costs will commence to apply, therefore, from 19 December, 2003 when those statements were available to him. ORDER Pursuant to s. 181(2)(c) and s 181(1) of the Industrial Relations Act 1996, the Commission makes the following Orders: 1. The Applicant, Mr. Dee Donavan, shall pay to the Respondent, costs on a party to party basis in respect of all proceedings in Matter No. IRC 5385 of 2003 commencing after 19 December, 2003, including the costs associated with this Notice of Motion. 2. The costs are to be paid by Mr. Donavan to the Respondent within 28 days from the date of this decision. 3. In the absence of agreement as to quantum, those costs shall be assessed in accordance with Rules 204 and 205 of the Commission's Rules. 4. The proceedings are concluded. I. Tabbaa COMMISSIONER DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.