Industrial Court of New South Wales CITATION: Hollingsworth v Commissioner of Police [2007] NSWIRComm 137 APPLICANT: Kim Hollingsworth PARTIES: RESPONDENT: Commissioner of Police, NSW Police FILE NUMBER(S): IRC 2074 of 2006 CORAM: Walton J Vice-President; Boland J; Backman J Costs - Practice and Procedure - Court's discretion to award costs - Whether grounds for departure from 'ordinary rule' as to costs - Costs to be awarded to successful party - Whether to apportion costs on basis of partial success of respondent CATCHWORDS: Held - No basis for apportionment as no loss by respondent on relevant issues - No other basis for departure from 'ordinary rule' as to costs and no disqualifying conduct - Costs awarded LEGISLATION CITED: Industrial Relations Act 1996 s 181(1), s 181(2)(c) Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 Commissioner for Children and Young People (No 2) [2004] NSWIRComm 8 Crump & Ors v Equine Nutrition Systems Pty Ltd T/A Horsepower & Anor (No 2) [2007] NSWSC 25 Day v Smidmore (No 3) [2006] NSWIRComm 17 Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20 Hollingsworth v Commissioner of Police [2007] NSWIRComm 7 CASES CITED: Oshlack v Richmond River Council (1998) 193 CLR 72 O'Sullivan v Crown in Right of the State of New South Wales (Department of Education and Training) (2003) 128 IR 158 NRMA Ltd & Ors v Morgan & Ors (No 3) [1999] NSWSC 768 Ove Arup Pty Ltd v Workcover Authority (NSW) (Inspector Mansell) (2005) 141 IR 478 Powerlan Ltd v Squires (No 2) [2007] NSWIRComm 68 Ruddock & Ors v Vadarlis & Ors (No 2) [2001] FCA 1865 State Rail Authority of New South Wales v Codelfa Construction Proprietary Limited (1982) 150 CLR 29 HEARING DATES: (Written submissions) 22 February, 7 and 22 March 2007 DATE OF JUDGMENT: 8 June 2007 APPLICANT: Mr D Patch of counsel Solicitor: Mr P Murphy Paul Murphy & Associates LEGAL REPRESENTATIVES: RESPONDENT: Mr P M Kite SC with Mr D Chin of counsel Solicitor: Ms M Kelly Crown Solicitors Office JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: WALTON J, Vice-President BOLAND J BACKMAN J Friday 8 June 2007 Matter No IRC 2074 of 2006 Kim Hollingsworth v Commissioner of Police Application by Kim Hollingsworth for contempt by the Commissioner of Police, NSW Police, for his refusal and/or failure to carry out the order of the Industrial Commission in Court Session made on 21 May 1999 JUDGMENT OF THE COURT [2007] NSWIRComm 137 1 Judgment was given in this matter on 8 February 2007: Hollingsworth v Commissioner of Police [2007] NSWIRComm 7 ('Hollingsworth 2007'). In that judgment, the Full Bench dismissed a Notice of Motion filed on 16 August 2006 by the applicant, Ms Kim Hollingsworth, seeking that this Court re-open and vary an order for reinstatement (the 'reinstatement order') made by the Industrial Relations Commission of New South Wales in Court Session on 21 May 1999, having concluded that the Court had no jurisdiction to entertain the application. 2 Ms Hollingsworth's application for variation of the reinstatement order constitutes but one matter, albeit the last in the present sequence of proceeding, within a lengthy history of proceedings between the parties. The applicant initially commenced proceedings in December 1995 in the Industrial Relations Commission of New South Wales alleging harsh, unreasonable or unjust dismissal by the respondent and seeking reinstatement. The history of this litigation was most recently summarised within our February judgment at [2] to [9] and [13] to [20]. 3 A motion filed in this matter by the applicant on 30 January 2006, alleging contempt by the respondent, the Commissioner of Police, NSW Police, for his refusal and/or failure to carry out the reinstatement order, was previously dismissed by consent on 10 August 2006. It was agreed that there would be no order as to costs in that respect. This present judgment, therefore, deals with the question of costs only in relation to the proceeding initiated by the applicant by the Notice of Motion filed on 16 August 2006. 4 This Court had earlier directed the parties to file and serve written submissions as to costs following judgment in relation to the relevant proceeding, with a view to the Court considering, with the consent of the parties, whether to decide the matter on the papers or further hear the parties as to costs. Having had the opportunity to consider the written submissions, we are satisfied that we may deal with the matter without further hearing. Submissions 5 In submissions, the parties raised a number of arguments as to specific issues, which can be briefly dealt with in turn. 6 The respondent, in his written submissions, sought an order for costs in his favour, arguing in general terms that there were no grounds in this instance for departing from the 'ordinary rule' that costs ought to be awarded to the successful party in proceedings. In Hollingsworth 2007, this Court considered a strike-out application filed by the respondent in relation to the applicant's notice of motion. As a basis for seeking an award of costs in his favour, it was submitted by the respondent that this strike-out application was "wholly successful". 7 The respondent also submitted that costs ought to be awarded so as to give rise to a "beneficial by-product"; namely, to impart upon the applicant as litigant the "sober realisation of the potential financial expense involved" (Oshlack v Richmond River Council (1998) 193 CLR 72 at [68]), and that the fact that the NSW Police is a government instrumentality ought not to preclude an award of costs (Commissioner for Children and Young People (No 2) [2004] NSWIRComm 8 at [24]). The respondent also referred to a statement made by McHugh J in Oshlack v Richmond River at [92], where it was stated that "every irrecoverable dollar spent on litigation is one dollar less to spend on the services that public authorities do and ought to provide". 8 The applicant, in her written submissions, argued that this was a matter where costs ought not to follow the event. An appropriate order in this instance would be that each party bear its own costs. Alternatively, the Court should apportion costs, ordering that the respondent is only entitled to 50 per cent of his costs. 9 The basis of these submissions was largely that a significant amount of time had been consumed by consideration of an issue which was raised by the respondent, and which ought not to have been raised, given the basis upon which the matter was set down for hearing. The applicant referred to this issue as being whether the motion by the applicant ought to be dismissed "because there was no evidence that established exceptional circumstances where the public interest in maintaining the finality of litigation is outweighed by the need to avoid an irremediable injustice". 10 The applicant further submitted that this specific and "clearly separable" issue was ultimately resolved in the applicant's favour. Reference was made to the case of Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (No 3) (1998) 30 ACSR 20, as authority, it would appear, for the proposition that, although costs ordinarily follow the event, a court may, where there are multiple issues involved, assess costs on each issue or reduce costs awarded to the successful party where that party has not succeeded on particular issues. 11 In reply, the respondent contended that the applicant was under a "fundamental misapprehension as to the nature" of the relevant proceedings, and refuted the applicant's claim that she was successful "on the factual issue as to the existence of an irremediable injustice", pointing out that the Court had proceeded, as stated in Hollingsworth 2007 at [11], on the basis that "purely stand-alone jurisdictional issues" were to be determined in that instance, without consideration of any "question of fact". Apportionment of costs was, therefore, an inappropriate course to take in this instance. 12 In light of this submission, the applicant then sought to clarify her original submissions, stating that she did not claim to have been successful in relation to factual issues concerning irremediable injustice, but only in opposing the respondent's "misconceived" attempt to have the motion dismissed on the basis that there was no evidence that established "exceptional circumstances" for the purpose of founding an irremediable injustice. Consideration 13 According to s 181(1) of the Industrial Relations Act 1996, this Court may award costs, in its broad discretion, subject to the rules of the Industrial Relations Commission and any other Act. The Court may also determine by whom and to what extent costs are to be paid. 14 In exercising this discretion, the Court must act judicially, and is guided in doing so by well-established legal principles, including the 'ordinary rule' that a successful litigant is, prima facie, entitled to an award of costs, unless there are special circumstances warranting a departure from the rule: O'Sullivan v Crown in Right of the State of New South Wales (Department of Education and Training) (2003) 128 IR 158 at [198] – [199], Powerlan Ltd & Anor v Squires (No 2) [2007] NSWIRComm 68. 15 It is certainly within the discretion of this Court to apportion costs, as suggested by the applicant, in instances where a party is only partially successful in relation to the final determination of the Court. (See for example O'Sullivan v Crown in Right of the State of New South Wales [196] - [202], Powerlan v Squires [14] - [18], Oshlack v Richmond River per McHugh J at pp 95-97 and Kirby J at 120-122, Ruddock & Ors v Vadarlis & Ors (No 2) [2001] FCA 1865, per Black CJ and French J, at pp 234-5; Crump & Ors v Equine Nutrition Systems Pty Ltd T/A Horsepower & Anor (No 2) [2007] NSWSC 25 at [35] - [44]). In NRMA Ltd & Ors v Morgan & Ors (No 3) [1999] NSWSC 768, Giles J referred to the "fairly well established" principles regarding orders as to costs in this regard at [24] - [25]. If a party fails on some issues, the circumstances may make it reasonable that he be deprived of the costs of those issues, or even be ordered to pay the other party's costs of those issues. For this purpose, issues may be issues in a pleading sense of bases of claim, or may be disputed questions of fact or law. But it must be remembered that parties should not be dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, and unless particular issue or group of issues is clearly dominant or separable from the balance of the proceedings it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between the issues on which he was successful and those on which he failed. It is sufficient to refer to Cratazzo v Lombardi (1975) 13 SASR at 12; Hughes v Western Australian Cricket Association (1986) ATPR 40-748 at 48, 136; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-2; and Waters v P C Henderson (Australia) Pty Ltd (NSWCA, 6 July 1997, unreported). If an order reflecting success or failure on issues is made, it is appropriate to have regard to the time referable to the issues, although necessarily without mathematical precision ( Lenning v Alexander Proudfood Company World Headquarters (NSWCA, 22 April 1991, unreported). It is not necessary that the issue or issues on which the party failed was or were raised by him unreasonably ( Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 615). 16 There is also some authority for the proposition put forward by the applicant that unnecessarily protracting proceedings may constitute 'misconduct' and, on this basis, lead the court to depart from the usual rule as to costs. McHugh J, in Oshlack v Richmond River at [69], refers to comment by Devlin J, in Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 at 874, who set out the relevant principle as follows: No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct. 'Misconduct' was defined by McHugh J, at [69], as including instances where a successful party "unnecessarily protracts the proceedings". (See also Day v Smidmore (No 3) [2006] NSWIRComm 17). 17 However, in this instance, there is no basis for any apportionment of costs, as suggested by the applicant, as there has been no loss by the respondent which might constitute only a partial success in terms of the Court's final determination on relevant issues. Furthermore, there is no other conduct on the part of the respondent, including any unnecessary protraction of proceedings, which might warrant departure from the ordinary rule as to costs. 18 In support of her application for variation, Ms Hollingsworth relied, in part, on an argument concerning an implied power of the Court, as a court of last resort, to re-open the reinstatement order in order to avoid an "irremediable injustice": State Rail Authority of New South Wales v Codelfa Construction Proprietary Limited (1982) 150 CLR 29 at 38. In Hollingsworth 2007 at [50], this Court stated as follows:- (B)oth parties proceeded on the basis that we would determine only the question of power to re-open to avoid an "irremediable injustice'". The question of whether any such injustice arose was left to be determined, if the Commission found such a power existed, at a later stage of the proceedings. 19 As it was pointed out by the respondent in his submissions as to costs, the issues for determination were thus defined by the Court as "purely stand-alone jurisdictional issues and no question of fact arises". The Court noted, at [11], as follows: (I)t appears to have been accepted that the appropriate course is for the Court to address the issues separately from the substantive proceedings. If the Police Commissioner is successful it will "save the costs and inconvenience that attend a protracted hearing of proceedings on the merits": Majik Markets Pty Ltd v Brake & Service Centre Drummoyne Pty Ltd and Others (1991) 28 NSWLR 443 per Kirby P at 446. That the parties had agreed to this course of action is evident from the proceedings conducted on 28 August 2006. 20 The Court went on to ultimately determine that it had no express or implied power to re-open the reinstatement order on the bases suggested by the applicant, and the respondent's strike-out application was, therefore, "wholly successful", as suggested in the respondent's submissions. It is not correct, therefore, that the applicant has been successful on any issue relevant to our determination in this matter. 21 In her submission, the applicant did not claim to have been successful in relation to factual issues as to the existence of "exceptional circumstances". It is clear that she could not have been successful in this regard, given that there was no consideration of any factual issues by the Court other than those necessary to determine the jurisdictional question posed. The applicant argued, however, that she did have some success in opposing a "misconceived argument" of the respondent as to the existence of "exceptional circumstances". Although it is difficult to understand the basis of this submission, the applicant appears to refer to matters raised by the respondent as to whether there was "anything suggested (if made out) which may be capable of constituting a relevant irremediable injustice". The respondent claimed during proceedings that this argument raised a matter of law, rather than a question of fact. On this point, the Court upheld an objection in the applicant's favour in order to ensure that the issues were clearly confined to those concerning jurisdiction, but without, in our view, the respondent having materially delayed the proceedings or suffering a loss (of a procedural kind) that would warrant any approach to costs outside orders that would ordinarily be made by the Court for a successful party. 22 As a final matter, we make the following observation. We note that the dispute between the parties had, as its source, allegations of unfair dismissal (although these proceedings before the Court do not attract the limitations on the awarding of costs found in (s 181(2)(c)). We also note that judicial consideration relating to whether this Court had jurisdiction to re-open orders and/or proceedings might be said to be a matter of public interest. For these reasons, and on these grounds, the Court has considered whether a departure from the ordinary rule as to costs might be appropriate in this matter, although such propositions were not raised in submissions by the parties. 23 Given the lengthy history of the dispute between the parties to date, and that the arguments raised in relation to jurisdiction were in large part settled in Ove Arup Pty Ltd v Workcover Authority (NSW) (Inspector Mansell) (2005) 141 IR 478, prior to the decision in Hollingsworth 2007 there is no basis on public interest grounds or otherwise for denying the respondent an award of costs in this matter. Conclusion 24 In all the circumstances, we consider that costs shall follow the event and an award of costs be made in favour of the respondent. The orders as to costs we make should thereby conclude these proceedings. We order that: The applicant shall pay the respondent's costs of the proceedings as agreed, or in default of agreement, as assessed. 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