Industrial Relations Commission of New South Wales CITATION : Bonaccorso and General Forest Tree Surgeons Pty Limited [2003] NSWIRComm 220 APPLICANT: PARTIES : Anthony Bonaccorso (Respondent on the motion) RESPONDENT: General Forest Tree Surgeons Pty Ltd (Applicant on the motion) FILE NUMBER: 6175 of 2002 CORAM: Sams DP Notice of motion - application for costs - whether applicant's claim frivolous or vexatious - s181(2)(c) of the Act - general principles. CATCHWORDS : Held, applicant's claim not designed to cause annoyance or embarrassment to employer - applicant's claim not manifestly groundless - unrepresented litigant - applicant with intellectual disability - costs refused - notice of motion dismissed. LEGISLATION CITED : Industrial Relations Act 1996 Legal Profession Act 1987 Attorney General v Wentworth (1988) 14 NSWLR 481 Burton v Shire of Bairnsdale (1909) 7 CLR 76 CASES CITED : General Steel Inc v Commissioner for Railways (NSW) and others (1964) 112 CLR 125 Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 Nilsen v Loyal Orange Trust (ACN 004 425 694) (unreported AIRC, North J, Vl 2875R of 1995) Raisanen v Special Broadcasting Services Corporation, (unreported, McKenna, C. NSWIRC 97/756) HEARING DATES: 05/14/2003; 06/04/2003; 06/18/2003 DATE OF JUDGMENT: 07/18/2003 APPLICANT: Mr M Bonaccorso appeared for his son LEGAL REPRESENTATIVES: RESPONDENT: Mr R Bartalesi (Solicitor) JUDGMENT: - 5 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: SAMS DP 18 July 2003 Matter No IRC02/6175 Anthony Bonaccorso and General Forest Tree Surgeons Pty Limited Application by Anthony Bonaccorso re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION ON COSTS [2003] NSWIRComm 220 1 In a decision published on 25 March 2003, [2003] NSWIRComm 70 the Commission dismissed an application, filed by Anthony Bonaccorso ('the applicant') in which he claimed to have been unfairly dismissed by General Forest Tree Surgeons Pty Ltd ('the respondent') on 8 August 2002. 2 The application was dismissed on the basis that the Commission declined to exercise it's discretion, pursuant to s85(3) of the Industrial Relations Act 1996 ('the Act') such as to permit the applicant's claim to be accepted outside the 21 day time period set by s85(1) of the Act. 3 On 7 April 2003 the respondent filed a notice of motion in the following terms: (1) The applicant in the substantive proceedings pay the respondent's costs of and incidental to the application filed on 4 November 2002 pursuant to s181 of the Industrial Relations Act 1996. (2) Any further or other order this Honourable Commission deems fit. 4 The notice of motion was accompanied by an affidavit sworn on 4 April 2003 by Mr Richard Bartalesi, the respondent's solicitor. Attached to the affidavit were two schedules of costs totalling $6508.48. The notice of motion was listed on 7 May 2003 and directions were issued for the filing and service of submissions. This decision now deals with the submissions filed by the parties. Submissions of the respondent 5 The respondent, through Mr Bartalesi submitted that the applicant's claim of unfair dismissal was frivolous and/or vexatious pursuant to s181(2)(a) of the Act. It was said that the applicant's resignation letter and the coincidence of his obtaining employment on the same day as he resigned, meant that there was no merit to the unfair dismissal claim and it was advanced purely as a device to embarrass the respondent. 6 Further, Mr Bartalesi said the claim was unmeritorious and improper. It could be categorised as exceptional. Reference was made to the Dictionary definition of "frivolous" and to the judgment of the High Court in General Steel Inc v Commission for Railways (NSW) and others (1964) 112 CLR 125. 7 It was further submitted that the unfair dismissal claim was instigated by third parties (family and friends), who had told the applicant to lodge a claim. 8 Mr Bartalesi relied on various passages in the Commission's substantive decision which were critical of the applicant's conduct of the case and questioned the merits of the claim. I need not elaborate on the cited passages. Evidence and submissions for the applicant 9 The applicant filed a short affidavit and deposed as follows: a. Since 20 September 2002 I have been unemployed. b. I have been told by a representative of Centrelink that I am entitled to receive a disability pension on account of my learning difficulties. I have not applied for a disability pension because of pride. c. I own no substantial assets and I have no independent source of income. The only assets I own are minor personal affects. d. I did not commence these proceedings as part of a mischievous campaign against the Respondent. e. I have no capacity to pay the Respondent's costs if this Commission orders that I pay such costs. 10 The applicant referred to the tests to be applied in cases where costs are awarded on the grounds that a claim was frivolous or vexatious (see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257, Nilsen v Loyal Orange Trust (ACN 004 245 694) (unreported AIRC, North J, Vl 2875R of 1995), Attorney General v Wentworth (1988) 14 NSWLR 481, General Steel Inc v Commissioner for Railways (NSW) and others). It was submitted that there was no evidence that the applicant's claim was instituted as part of a habitual and/or persistent campaign against the respondent. 11 The applicant's case had been dismissed in the exercise of the Commission's discretion. Where a subjective discretion is exercised, it is impossible for a claim to be overridden by an objective test of being frivolous. 12 In any event, the unrepresented status of the applicant meant that the weaknesses in his case did not amount to the case being "so obviously untenable that it cannot possibly succeed." At all times, the applicant was not legally represented. 13 In the exercise of the discretion as whether to award costs, the Commission is able to have regard to: a. personal characteristics of the applicant; b. carriage of the claim; c. applicant's capacity to pay costs; d. respondent's capacity to pay costs; e. extent of the delay in filing the claim; 14 The evidence of both parties recognised the learning and intellectual difficulties of the applicant. This created serious problems in the carriage of the case, providing proper instructions and providing proper articulation of the facts. Awarding costs in this case would act as a deterrent to any intellectually challenged litigant in accessing the New South Wales industrial jurisdiction. 15 It was put that the applicant has not worked since 30 September 2002. He resides with his parents, has no significant assets and no independent income. He could not pay a costs order and would be exposed to bankruptcy if ordered to do so (See Raisanen v Special Broadcasting Services Corporation; (unreported, McKenna, C. NSWIRC 97/756)). In Reply 16 Mr Bartelasi observed that relying on an intellectual disability and a lack of funds should have alerted the applicant, more so than any ordinary litigant, of the need for proper advice and representation. CONSIDERATION 17 Neither party directed their submissions to the discrete provisions in s181(2)(c) of the Act for costs applications in unfair dismissal proceedings. That section is expressed as follows: (c) the Commission may award costs against a party to proceedings under Part 6 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. 18 If a positive finding is made under this section, the Commission may then move to the general discretionary powers to award costs available in s181(1): 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 Commision 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. 19 That being so, I am not called upon to determine whether either party unreasonably failed to agree to a settlement of the claim. The respondent's case was argued on the grounds that the applicant's claim was frivolous or vexatious, or both. 20 A seminal authority for what constitutes frivolous or vexatious is to be found in General Steel Inc v Commissioner for Railways (NSW) and Others, where the High Court said at p129: 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'. 21 This line of authority might be traced to a case in 1908 where O'Connor J of the High Court, in Burton v Shire of Bairnsdale (1909), 7 CLR 76 at 92) neatly expressed the general principle of the right of every litigant to have his/her case heard and determined, unless such a claim is so obviously untenable that it cannot possibly succeed: 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. 22 Having regard for the findings in the substantive proceedings, and in view of my observations of both the applicant and his father during the proceedings, I am satisfied that the applicant's claim could not be characterised as being frivolous or vexatious. 23 The fact that the applicant was unrepresented and could not afford proper (or any at all) legal advice is a further consideration in the case. I note that the substantive proceedings did not involve lengthy preparation or wasted court time. The original case was presented and argued succinctly in less than an hour. It seems to me that, if there was any desire to cause annoyance or embarrassment to the employer, then it would have been open for the applicant, or his father, to have embarked on a completely different and time consuming exercise. 24 I would also note that the fact the Commission makes adverse findings against a party in a contested litigation does not take the case "over the line" as it were, to being one that is "manifestly groundless". I do not believe that this case falls into such a category. Nor does it fall within a category of exceptional. 25 The Commission has also had regard for the acknowledgment by the respondent of the applicant's learning and/or intellectual disabilities. It was perfectly understandable that his father would mount a vigorous and unquestioning defence of his son in those circumstances. I conclude that these considerations are relevant factors in exercising my discretion to refuse the respondent's application for costs. 26 Accordingly, the respondent's notice of motion for costs in these proceedings is dismissed. 27 The matter is now concluded. Peter Sams Deputy President 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.