Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. Sita Environmental Solutions [2004] NSWIRComm 1108 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Sita Environmental Solutions FILE NUMBER: IRC 1261 of 2004 CORAM: Connor C CATCHWORDS: costs - frivolous and vexatious claim - claims and counter-claims - delay in proceedings - small claims jurisdiction - what constitutes an "industrial court" - commencement of proceedings - settlement of disputes LEGISLATION CITED: Industrial Relations Act 1996 Latoudis v. Casey (1990) 170 CLR 534 CASES CITED: S and L Steel Dispute Case (unreported) Mavloudi v. Premier Cabs Pty Limited (unreported) Dryer v. Insurance Resources (Brokers) Pty Limited (unreported) HEARING DATES: 11/05/2004 DECISION DATE: 12/17/2004 APPLICANT Andrew Metcalfe REPRESENTATIVES: RESPONDENT Megan Wood DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 17 December, 2004 Matter No IRC 1261 of 2004 Transport Workers' Union of New South Wales and Sita Environmental Solutions Dispute notification under S.332 of the Industrial Relations Act, 1996 DECISION [2004] NSWIRComm 1108 Background 1 This matter has an extraordinarily complex history which, in my opinion, is out of all proportion to the issue left before me and, in my view, it has been kept alive unnecessarily. It commenced with a notification lodged pursuant to the provisions of Part 4, Dispute Resolution, of Chapter 6, Public Vehicles and Carriers, of the 1996 Industrial Relations Act [S.332] by the Transport Workers' Union of New South Wales. The TWU alleged that Sita Environmental Solutions had failed to pay its contract carriers the correct rates. The contract drivers were engaged by Sita under contracts which the TWU claimed provided for adjustments to reflect movements in the Consumer Price Index. The TWU also asserted that for the period of three months during 2003 they did not receive their correct rates. 2 The matter was allocated initially to Macdonald C and set down for a conference before him on Friday, 26 March, 2004. However, on Friday, 19 March, 2004 the TWU wrote to seek the reallocation of the matter to me as I already had before me another matter involving a dispute between the TWU and Sita. The proceedings before Macdonald C were vacated and the file allocated to me. I set it down for a mention on Tuesday, 27 April, 2004, Friday, 28 May, 2004 and Thursday, 10 June, 2004. Conciliation failed to settle the matter. I programmed it for arbitration. 3 The TWU had initially asserted that the contract drivers were covered by the terms of the Transport Industry - Waste Collection and Recycling Contract Determination but in correspondence dated Friday, 16 July, 2004 to Ms Wood who represented Sita in the proceedings, it amended its position, claiming that the relevant industrial instrument covering the contract drivers was either the Transport Industry - General Carriers Contract Determination or the BFI Waste Collection (RoRo) Contract Carriers Agreement. 4 The TWU claim, in fact, was based on Ss.379 and 380, ie it was a small claim for the recovery of allegedly unpaid entitlements up to a value of $10,000.00 which is the ceiling for such claims before me. By virtue of S.343(j) the small claims jurisdiction is extended to cover entitlements under contract determinations made under Chapter 6. If such a claim actually was processed to conclusion, I would constitute an "industrial court", which is defined in S.364(1)(b) to include: "…in the case of proceedings under S.380 (small claims during other Commission proceedings) - the Commission whether or not in Court Session..." But, in fact, the matter did not proceed to a hearing. On Monday, 6 September, 2004 the TWU wrote to me to inform me that it wished to discontinue the proceedings. 5 An application for leave to discontinue a matter is only available to a party before the commencement of the hearing. Rule 138(1) reads as follows: "A party may, before the beginning of the hearing of any proceedings , discontinue the proceedings so far as concerns the whole or any part of any application made by that party: (a) where the party or the party's solicitor certifies that the party does not represent any other person and all other parties having an address for service in the proceedings consent; or (b) with the leave of the tribunal." Whilst I had made directions for the filing of evidentiary material, I had not set a date for the hearing. In other words, the application from the TWU for discontinuance of the proceedings occurred "...before the beginning of the hearing..." and it was therefore not excluded from seeking the discontinuance of the proceedings. 6 In the TWU's correspondence to me, it was indicated that the discontinuance of the matter was with consent of Sita. In such circumstances, it is my customary procedure to grant leave for discontinue of the matter in chambers without the appearance of either party. That is recognised by Rule 138(2), viz: "Leave of the tribunal may be given in chambers without the appearance of any person." However, on Tuesday, 24 August, 2004 solicitors representing Sita had reserved their position as to costs and on Friday, 17 September, 2004 I received a further letter from those solicitors informing me that: "...contrary to the assertion in the TWU's letter, we did not consent to the applicant's discontinuance of the small claims proceedings. Rather, as was set out in our letter of Tuesday, 24 August, 2004, our client reserved its rights to make an application for a costs order pursuant to Ss.181 and 373 against the applicants. We are now instructed to press such an application. Accordingly, when the proceedings are listed for mention...on Tuesday, 21 September, 2004 we advise that we shall seek a date for the hearing of a costs application in this matter and a timetable for submissions, should Commissioner Connor consider this appropriate..." I programmed the matter for a hearing to determine that application by Sita for costs on Wednesday, 29 September, 2004. But it has proven to be extremely difficult to effectively bring this matter to a conclusion. 7 On Tuesday, 28 September, 2004 Sita's solicitors wrote again to me seeking that I vacate that hearing because of another urgent commitment in the State Supreme Court involving Ms Wood, who had represented Sita in the proceedings. The TWU did not oppose the adjournment of the proceedings on that basis. However, due to my other commitments it was not possible for me to set down any alternate time for the hearing of Sita's application for costs in the immediate future. I suggested that the parties file and serve written submissions and provided a timetable for that to be done - one week for Sita's solicitors and a further week for the TWU to respond. I understood from telephone discussions that the arrangement was acceptable to both parties but the written submissions were not subsequently provided in accordance with that programme. I listed the matter for a mention for further programming on Monday, 25 October, 2004 and, ultimately, for hearing on Friday, 5 November, 2004. In the hearing Ms Wood continued to represent Sita and Mr Metcalfe now represented the TWU. 8 Ms Wood sought a further adjournment, however. She had filed an outline of her submissions on the issue of costs on Friday, 22 October, 2004 which I made an exhibit in the hearing [Exhibit 2]. Mr Metcalfe had responded with written submissions [Exhibit 3] and filed them on Friday, 5 November, 2004. In those submissions he made a counter-claim for costs against Sita on behalf of the TWU and Ms Wood indicated that she had briefed counsel (Mr Cross) to respond formally to that TWU claim and required further time to respond to that fresh issue, which I granted. 9 It seems to me that the claims and counter-claims being made by the parties (with respect to a matter which, for all practical purposes, has been effectively concluded) was simply out of all proportion to the issue before me. The only thing that was keeping the matter alive, and involving further legal costs for both sides, was the applications for costs themselves which had developed a life of their own, independent of the original cause of dispute. In any event, I proposed to proceed with the written submissions that were already before me, directing Ms Wood to file further submissions within fourteen days with respect to the TWU application for costs and for Mr Metcalfe to respond with additional written submissions, limited to any new material which arose from Ms Wood's further submissions relevant to the TWU claim for costs only. Costs 10 Applications for costs in S.332 proceedings before a single member of the Commission fall under S.181(2), viz: "However, the Commission when it is not in Court Session may award costs only in the following cases: (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause, 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) the Commission may award costs in proceedings for a breach of an industrial instrument or the recovery of money under Chapter 7, as provided by Ss.357 and 373." Since the S.332 notification by the TWU had evolved into a small claim for the recovery of alleged underpayment of remuneration. Ms Wood has mounted her claim for costs against the TWU under S.181(2)(d). S.357, which concerns proceedings before the Commission for a civil penalty, is not relevant in the current S.332 proceedings before me. S.373 provides simply: "In any proceedings under this Part, the industrial court may award costs to either party and assess the amount of those costs." 11 Both Ms Wood and Mr Metcalfe recognise that the awarding of costs is at my discretion. The rule in most litigation is that cost applications follow the event, ie the unsuccessful litigant may be obliged to pay the costs of the successful litigant [Latoudis v. Casey (1990) 170 CLR 534 at pp.542 and 543]. Costs arising out of the dispute resolution procedures in Ss.130 and 332 must, in my opinion, be confined to a very limited field but Ms Wood has claimed that costs are frequently awarded for small claims proceedings before an industrial magistrate on that basis. In her written submissions she indicates that: "...A body of authority has emerged from decisions of the Chief Industrial Magistrate which supports the proposition that costs will be awarded in small claims proceedings as a rule unless there are special circumstances which militate against doing so. Strictly speaking, this is not an instance in which costs may follow the event because the TWU discontinued the proceedings. However, costs are routinely awarded in small claims proceedings where a respondent is put to the cost of defending proceedings or an applicant institutes proceedings in circumstances where the Commission has no jurisdiction..." Initially, since the TWU withdrew its claim before it, in fact, had advanced any argument on the jurisdictional issue on which the hearing would have obviously centred, and before Sita was obliged to make its response, the legal costs in this case would seem to me to be legitimately confined only to the brief preliminary proceedings and programming before Macdonald C and myself. Moreover, in view of the wide scope of the general carriers contract determination, which the TWU had informed Sita was the relevant instrument on Friday, 16 July, 2004, it is at least arguable that the TWU claim was still jurisdictionally competent. That is an issue which remains unresolved in these proceedings (and, because the TWU withdrew the matter, it will not be answered here). 12 The TWU application for costs is in turn based on the expenses it has incurred in relation to the Sita costs application, ie it is relying on Ss.181(2)(a) and (b), ie that the Sita application for costs was itself frivolous or vexatious and/or was initiated without reasonable cause. In Mr Metcalfe's written submissions he concludes that: "...the application of the respondent for a costs order against the TWU on the basis of a lack of jurisdiction must fail given the identification of the relevant industrial instrument that could underpin the small claims if they went to hearing. The union identified the relevant instruments by way of letter dated Friday, 16 July, 2004 to the respondent's lawyers. This letter also indicated that the TWU would be seeking to amend the small claim application accordingly. Given the express power to amend an application in these circumstances is provided for in S.374 any costs application was doomed to fail. To make a costs application on the basis of a lack of jurisdiction in these circumstances is both frivolous and vexatious and without proper cause..." Conclusion 13 I must say that I am not convinced that Ss.181(2)(d) and 373 provide a proper basis for an application for costs on behalf of Sita in these S.332 proceedings. S.181(2)(d) is the authority for costs "...in proceedings for...the recovery of money...". but I do not believe that I become an "industrial court" for the purposes of S.373 until the hearing of a matter actually commences. Up to that time the Commission is simply involved in its ordinary processes of resolving an industrial dispute that has been referred to it - and, in my opinion, it should be unfettered in that process by any considerations over costs. 14 It is customary procedure for trade unions to bring a small claim under Ss.379 and 380 before the Commission by way of either S.130, or its equivalent for contract regulation of the transport industry under Chapter 6 - S.332. My purpose in the current proceedings was primarily to bring the parties before me in the current proceedings to confer [S.332(1)(a)] and, if that was unsuccessful, to programme the matter for arbitration. But that is as far as the matter had actually gone when the TWU made its application to discontinue the proceedings. For the purpose of S.181(2)(d) there were, in fact, no "...proceedings for...the recovery of money..." at the time that the TWU sought to discontinue the proceedings (although clearly such proceedings were in contemplation). 15 The fact is that a compulsory conference may be convened if, in terms of S.332(2) an "...association registered under this Chapter...", ie the TWU, has become aware of an industrial dispute over, among other things, an alleged breach of a contract of carriage with a principal contractor [S.332(2)(b)]. That is as far as the matter had gone when the TWU sought to withdraw it. As far as the small claim was concerned, Ss.379, 380 and 343(j) only becomes the source of my jurisdiction at the point of the hearing of the matter. 16 In my unreported preliminary decision of Tuesday, 15 July, 2003 in the S and L Steel Dispute Case [Matter No.IRC 7306 of 2002] I considered the relationship between a S.332 notification and a small claim made in it under Ss.379, 380 and 343(j). I pointed out (at p.6) that: "...in terms of S.334(4) my obligation in such compulsory conference proceedings is to '...investigate the merits of the matter concerned, irrespective of whether or not industrial action is taking place...'. And in terms of S.335(5) if I consider that the public interest may be affected and all reasonable steps taken to resolve the industrial dispute, I may make an interim contract determination... But I am not called upon to do so in these proceedings which instead turned into a small claim under Ss.379 and 380...(which becomes) the source of my jurisdiction for the claim that the TWU intends mounting in these proceedings and at the point when I commence to determine a small claim those proceedings are effectively converted to proceedings before an 'industrial court'..." As the words I have placed in italics above indicate, my argument is that until the small claim proceedings have actually commenced, no application may be made for costs under Ss.181(2)(d) and 373. 17 For any proceedings under S.332, of course, an application for costs may be made under either Ss.181(2)(a) or (b) - a frivolous or vexatious application or the institution of proceedings without reasonable cause. And it is on those grounds that the TWU application for costs against Sita arise. In my unreported decision on Friday, 9 May, 2003 in Mavloudi v. Premier Cabs Pty Limited [Matter No. IRC 1959 of 2003 at pp.2 and 3] I confirmed the relevance of Ss.181(2)(a) and (b) for a cost application. But, as I also indicated in my unreported decision on Thursday, 15 May, 1997 in Dryer v. Insurance Resources (Brokers) Pty Limited [Matter No. IRC 6497 of 1996 at pp.3 and 4] where an unfair dismissal claim made under Part 6, Unfair Dismissals, of Chapter 2 [Ss.83 to 90] was withdrawn before the hearing commenced and an application was subsequently made for costs under S.181(2)(c): "…there is no evidence before me to conclude that there was an unreasonable failure on (the applicant's) part to agree to a settlement of his claim or that his application was frivolous or vexatious. Nor will there ever be if the matter does not proceed any further to hearing. It is neither the wish of the applicant nor the respondent that the matter proceed to hearing…" It is clearly the right of the TWU to lodge a notification under S.332 over any issue which concerns it. The purpose behind both Ss.130 (for employees) and 332 (for contract drivers) is to ensure that there is a procedure in place for the orderly settlement of industrial disputes. It is anathema to the scheme of the Industrial Relations Act in general, and Chapter 6 in particular, that any such argument should be taken in the field by industrial action without recourse to the orderly procedure available in the Commission to resolve industrial disputes. Moreover, I am satisfied that the reasoning in Dryer v. Insurance Resources (Brokers) Pty Limited for cost applications under S.181(2)(c) would be equally applicable to cost applications under S.181(2)(d), ie any case brought to a conclusion ahead of the hearing of the matter would not ordinarily attract a successful application for costs unless it could be shown that a party had conducted itself in a manner designed only to frustrate the processes. I do not believe that the conduct of the TWU on this occasion would give any substance to any such allegation. 18 The same position would apply to the TWU application for costs. If it is the right of the TWU to pursue a claim under S.332, it is equally the right of Sita to seek a costs application arising out of those proceedings. Such cost applications are authorised by Ss.181(2)(a), (b) and (d). The fact that I do not believe that Ms Wood's application for costs had merit, does not automatically make it a frivolous or vexatious claim or suggest that it was instituted without reasonable cause. 19 In the circumstances, therefore I propose to grant the TWU leave to discontinue the matter. I dismiss the application for costs made on behalf of Sita and the TWU. P J CONNOR 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.