Industrial Court of New South Wales CITATION: All-Fect Distributors Limited & Ors v George Stewart [2007] NSWIRComm 80 First Appellant All-Fect Distributors Limited Second Appellant Fred Joseph Essey Third Appellant PARTIES: Joseph Fred Essey Fourth Appellant Paul Fred Essey Respondent George Stewart FILE NUMBER(S): IRC2658 of 2006 CORAM: Walton J Vice-President; Kavanagh J; Staff J CATCHWORDS: Costs on appeal - application by unsuccessful appellants for costs of stay in appeal - challenge to costs orders in substantive hearing - order appellants to pay respondent's costs in all substantive hearings, and for stay, and on appeal LEGISLATION CITED: Industrial Relations Act 1996 CASES CITED: Inspector Green v The Crown in Right of the State of NSW (Dept of Commerce) [2006] NSWIRComm 368 Inspector Wolf v Rockdale Beef Pty Ltd (No. 2) [2006] NSWIRComm 365 HEARING DATES: 09/11/07 DATE OF JUDGMENT: 5 April 2007 Appellants: Solicitors: Mr J. Hassett Hassett Dixon LEGAL REPRESENTATIVES: Respondent: Mr D. Shoebridge of counsel Solicitors: Mr J. Sefton Employment Lawyers JUDGMENT: - 9 - INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH CORAM: WALTON J, Vice-President KAVANAGH J STAFF J Thursday 5 April 2007 Matter No IRC 2658 of 2006 ALL-FECT DISTRIBUTORS LIMITED & ORS v GEORGE STEWART Application by All-Fect Distributors Limited for leave to appeal and appeal against a judgment of Justice Boland given on 19 June 2006 in matter No IRC 4435 of 2003 JUDGMENT OF THE FULL BENCH AS TO COSTS [2007] NSWIRComm 80 1 On 16 February 2007, the Full Bench of the Court heard the leave to appeal and appeal application in this matter and delivered the following orders at [65]: 1. Leave to appeal is granted. 2. The appeal is dismissed 3. The stay granted in this matter is dissolved. 4. We reserve the question of costs of the appeal. 2 The Full Bench in its judgment reasoned as to the above costs order (No. 4) as follows at [64]: As to costs, our finding would ordinarily suggest that the appellants would pay the costs of the appeal, as agreed, or, in default, as assessed. If that position is accepted, then the appellants should indicate same to the chambers of the Vice-President within seven days and we shall make orders in chambers accordingly. If there is a contest as to costs, then the respondent shall file and serve a submission setting out its application for costs and the grounds in support thereof within seven days and the appellants shall reply within seven days. Absent any application for a hearing, any dispute as to costs will be resolved on the papers. 3 As no agreement was reached between the parties as to the costs of the appeal, in accordance with the determination of the Full Bench at [64] that leave be reserved, the Full Bench received written submissions from the parties and determined the issue of costs, as agreed, on the papers. 4 The appellants submitted the appropriate order for costs on the leave and appeal application was the appellants to pay the respondent's costs of the appeal as agreed or assessed. 5 The appellants, however, made the following further application: 1. As the respondent unsuccessfully opposed a stay in the appeal, the costs associated with the stay hearing, as determined by Schmidt J, should be awarded in favour of the appellants. 2. As the respondent unsuccessfully sought indemnity costs on the proceedings below, a matter which necessitated a special fixture before Boland J and was the subject of a separate judgment dated 20 September 2006, the costs associated with that special fixture should also be awarded in favour of the appellants. 6 In order to determine the applications brought by the appellants, it is necessary to recite the relevant history of the litigation. History of the Litigation 7 On 19 June 2006, judgment was given in favour of granting relief to the respondent (the applicant in the substantive proceedings below) in an action under s106 of the Industrial Relations Act 1996: George Stewart v All-Fect Distributors Limited & Ors [2006] NSWIRComm 195. Following judgment, Boland J ordered that: 166 The Court makes the following orders: (1) The contract entered into between the applicant, George Burns Stewart and the first respondent, All-Fect Distributors Limited in or about early 1994 and the contract entered into between the applicant and the first respondent in or about 1996 are declared to be unfair contracts on the following grounds, namely that the contracts: (a) were unfair, harsh and unconscionable; (b) were against the public interest; (c) provided a total remuneration that was less than a person performing the work would receive as an employee performing the work; (d) avoided the provisions of an industrial instrument, namely, the Commercial Travellers, &c., (State) Award. (2) The contracts are varied by inserting a provision to the following effect: All-Fect Distributors Limited is required to remunerate the George Burns Stewart at a rate commensurate with half of the Minimum Award Rate that would be payable to the applicant if he were a Local Employee under the provision of the Commercial Travellers, &c., (State) Award together with the locomotion allowance payable to a Local Employee in respect of a motor vehicle up to and including 2,000 cc during the life of the contracts. (3) The respondents shall pay to George Burns Stewart an amount of $52,000 on the basis that first respondent shall pay one-half, the second respondent shall pay one-quarter and the fourth and fifth respondents shall jointly and severally pay one-quarter. In the absence of any agreement as to the calculation of this amount the parties, or any of them, have liberty to have the matter re-listed before the Court. (4) The respondents shall pay interest on the amount specified in Order (3) hereof in accordance with Schedule 5 of the Uniform Civil Procedure Rules 2005. The interest shall be payable from the date of filing of the original summons for relief to the date of this judgment. (5) The respondents shall pay the applicant's costs of the proceedings in an amount as agreed or assessed. If the parties are unable to agree, they have liberty to approach. 8 On 11 July 2006, solicitors for the respondent sought to re-list the matter as the parties could not reach agreement on the terms of the orders of Boland J. The respondent sought the following orders: Order 4 to be amended to reflect interest payable by the respondents in the sum of $13,424.55; and Order 5 to be amended to read: the respondents shall pay the applicant's cost on a party/party basis from 8 August 2004 inclusive and thereafter, pursuant to Part 23 IRC Rules, the respondents are to pay the applicant's costs on an indemnity basis to 19 June 2006. 9 Boland J gave directions for written submissions and, after consideration, on 20 September 2006 in George Stewart v All-Fect Distributors Limited and Ors (No 2) NSWIRComm 303 gave judgment on the applications for interest and indemnity costs. His Honour gave the following orders: 25 The Court makes the following orders: (1) The first, second, fourth and fifth respondents shall jointly and severally pay the applicant's costs of the proceedings in an amount as agreed or assessed. (2) The respondents shall pay interest on the amount specified in Order (3) of the Orders made on 19 June 2006 in the sum of $13,424.55 on the basis that first respondent shall pay one-half, the second respondent shall pay one-quarter and the fourth and fifth respondents shall jointly and severally pay one-quarter. 10 On 19 July 2006, Schmidt J dealt with the appellants' application for a stay of the orders of Boland J. After hearing argument, her Honour granted the stay on terms and gave the following orders at [24]: 1. That orders 1, 2 and 3 of his Honour Boland J of 19 June 2005 in proceedings numbered IRC 4435/03 be stayed pending further order of the following terms. 2. Within 14 days of today's date the appellants pay $52,000 to the respondent's solicitor to be held in addition to any interest thereon in trust in a controlled monies account subject to further order of this Court. 3. Within 14 days of any decision of his Honour Boland J as to interest that any such monies due and payable as to interest by order of his Honour Boland J are to be paid to the respondent's solicitor to be held, in addition to any interest thereon, on trust in a controlled monies account subject to further order of this Court. 4. Liberty to apply. 5. Costs in the cause. Appellants' Submissions 11 The appellants submitted as to its application for costs of the "special fixture" before Boland J on 20 September 2006: · the applications for interest and indemnity costs were brought by the respondents. · the respondents failed in the application for indemnity costs. · Boland J, with respect, did not direct his mind to the question of the costs of the applications heard on the 20 September 2006; and · the only directions given for the hearing related to the interest application. 12 The appellants submitted as to their application for costs on the stay: · the respondent opposed the stay, which opposition was unreasonable; · notwithstanding, the stay was granted on terms, · the respondent, given his opposition to the appellants' application, should pay the costs of the stay or, alternatively, · the Full Bench should order each party bear their own costs on the stay. Respondent's Submissions 13 The respondent submitted the appropriate order for costs on the leave and appeal application should incorporate the words "are jointly and severally liable". The order should therefore read: · The appellants are jointly and severally liable to pay the respondent's costs of the appeal as agreed or assessed. 14 The respondent submitted the appellants misconceive the liberty granted by the Full Bench for submissions on costs as per [64] of its judgment, which submissions were to address costs on the appeal. The respondent further opposes the Full Bench granting leave to the appellants to press the two applications for the payments of costs as contended in their proposed orders. 15 In the alternative, the respondent submitted, if the Full Bench determines to deal with the two applications of the appellants it should have regard to the following contentions. 16 As to the application for costs of the "special fixture" before Boland J: · the application was incidental to the judgment of Boland J of 20 September 2006; · the costs order of Boland J on 20 September 2006 elucidated the cost order given in the substantive matter; · the hearing was not a special fixture but directed itself to the two applications brought by the respondent under the leave reserved allowed by his Honour and were directed to orders (4) and (5) of the substantive proceedings; and · the appellants did not consent, through negotiations, to an agreed quantification of interest therefore the matter was relisted by the respondent, in accordance with his Honour's order as to leave. His Honour accepted the submissions of the respondent. 17 The respondent submitted as to its indemnity costs application: · a consideration of the issue of indemnity costs was allowed under the leave granted by Boland J; · the respondent failed in its application. Boland J gave his reasons in the judgment of 20 September 2006; · as a result of an amendment made on the first day of the hearing his Honour rejected the application of the respondent and costs were ordered, in accordance with his Honour's prior determination in the substantive matter, on a party - party basis, which order was amended to add that the named respondents be jointly and severally liable; · the orders of 20 September 2006 should be read with the orders in the substantive matter. 18 As to costs of the stay, the respondent submitted: · the application for a stay was brought by the appellants and it was reasonable for the respondent to oppose the application; · Schmidt J granted the stay, on terms, after giving consideration to the submissions of both parties in paragraphs [7] and [23] and at [24] of the judgment; · her Honour ordered "Costs in the cause"; · that order should stand. Consideration 19 The parties are ad idem that the appropriate order for costs on the leave to appeal and appeal application is that the appellants should pay the respondent's costs of the appeal as agreed or assessed. 20 We, however, also accept the submission of the respondent that the terms "are jointly and severally liable" be inserted into the order and will so order. 21 The appellant brings to the Full Bench two other applications, one related to the costs of a hearing before Boland J on 20 September 2006 and the other related to the costs order given by Schmidt J, following the grant of a stay application brought by the appellants on the filing of the leave and appeal application. 22 On appeal, the appellants sought as relief that "all the orders of Boland J in Matter No. IRC4435 of 2003 be set aside or quashed". However, no ground of appeal related to an error by Boland J in his Honour's orders as to costs was pleaded. While the Full Bench is of the view the determination at [64] of its judgment does not allow leave to bring the first application, in the interests of bringing finality to this litigation, we make the following observations. 23 As to the appellant's application for costs incurred in the hearing before Boland J on 20 September 2006 (which related to an application brought by the respondent) we note that the submissions of the parties made to Boland J addressed both the application for orders for the quantification of interest and the application for indemnity costs. Further on a reading of the judgment of Boland J, the Full Bench is of the view his Honour gave consideration to both issues. His Honour then gave the orders as recited at [7] above. We find his Honour made no error. We see no reason to interfere with these orders. 24 Therefore, the order for costs as delivered in the judgment in the substantive proceedings below in Matter No. IRC4435 of 2003 must be read with Boland J's costs order in judgment No (2) (which was also delivered under the same substantive proceedings) and has the following effect: · the appellants (the first, second, fourth and fifth respondents in the substantive proceedings) are jointly and severally liable for costs in the substantive proceedings including the hearing of 20 September 2006. 25 As to the application of the appellants for the costs of the stay, Schmidt J gave an order that costs of the stay application be "costs in the cause". Schmidt J gave a reasoned judgment before determining to grant the stay, on terms. We do not accept the application to oppose the stay was unreasonable. In the use of the judicial discretion, her Honour determined to give the usual order that costs follow the event. Having regard to s181 of the Industrial Relations Act 1996, we do not consider her Honour misused her discretion. There were no special circumstances before her Honour that would cause the usual order to be varied (Inspector Wolf v Rockdale Beef Pty Ltd (No. 2) [2006] NSWIRComm 365; Inspector Green v The Crown in Right of the State of NSW (Dept of Commerce) [2006] NSWIRComm 368). We therefore find no reason to intervene to disturb her Honour's order. 26 It is agreed between the parties that costs of the appeal follow the event and as the appeal has been allowed it follows, given the stay application was brought as part of the appeal application, the orders of the Full Bench encompass the costs of the stay application. 27 The Full Bench gives the following further orders to those described at [1] above: 1. The appellants are jointly and severally liable for the costs of the appeal. 2. The appellants (the first, second, fourth and fifth respondents in the substantive proceedings) are jointly and severally liable for costs in the substantive proceedings including the hearing of 20 September 2006. 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.