Industrial Relations Commission New South Wales Medium Neutral Citation: Transport Workers' Union of New South Wales (on behalf of Darren Roger Bargwanna) and Robar Enterprises Pty Ltd (ACN 108 640 517) (No 2) [2014] NSWIRComm 9 Hearing dates: 6 December 2013 Decision date: 13 March 2014 Before: Backman J Decision: Order The respondent's application for costs under sections 181(2)(a) and (b) of the Industrial Relations Act 1996 is refused. The application is dismissed. Catchwords: Costs - application by respondent for costs under s 181(2)(a) and (b) of the Industrial Relations Act 1996 (the IR Act) - application consequent upon dismissal of the applicant's applications under s 314 and s 213 of the IR Act - relevant legal principles with respect to s 181(2)(b) - application of legal principles to evidence - relevant legal principles with respect to s 181(2)(a) considered by reference to the evidence - order Legislation Cited: Conciliation and Arbitration Act 1904 Industrial Relations Act 1996 Cases Cited: Attorney-General v Wentworth (1988) 14 NSWLR 481 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Nestle Australia Ltd (2005) 146 IR 379 Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (2012) 290 ALR 647 Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 CFMEU v Newcrest Mining [2005] NSWIRComm 129 Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission and Another (2006) 156 FCR 275 Geneff v Peterson & Ors (1986) 19 IR 40 Hatchett v Bowater Tutt Industries Pty Ltd [No. 2] 28 FLR 324 Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16 Imogen Pty Ltd v Sangwin (1996) 70 IR 254 Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 Peden v Lake Macquarie Refrigeration Pty Ltd (2004) 134 IR 149 Re Nimmo (No. 2) [2011] FCA 728 Re Operational Ambulance Officers (State) Award (No 2) (2011) 207 IR 303 Re Ross and Others; Ex parte Crozier (2001) 111 IR 282 Re Nimms (No. 2) [2011] FCA 728 Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232 at [95] Transport Workers' Union of New South Wales (on behalf of Darren Roger Bargwanna) and Robar Enterprises Pty Ltd [2013] NSWIRComm 84 Category: Costs Parties: Transport Workers' Union of New South Wales (on behalf of Darren Roger Bargwanna) (Applicant) Robar Enterprises Pty Ltd (ACN 108 640 517) (Respondent) Representation: Mr M Gibian of counsel (Applicant) Mr D Mahendra of counsel (Respondent) Transport Workers' Union of New South Wales (Applicant) Blackwell Short Lawyers (Respondent) File Number(s): IRC 307 of 2012 decision 1Before the Commission is an application for costs brought by the respondent, Robar Enterprises Pty Ltd, under sections 181(2)(a) and (b) of the Industrial Relations Act 1996 (the IR Act). The application follows the dismissal by me of two applications brought by the applicant, the Transport Workers' Union of New South Wales (on behalf of Darren Roger Bargwanna) (the TWU), under s 314 and s 213 of the IR Act: Transport Workers' Union of New South Wales (on behalf of Darren Roger Bargwanna) and Robar Enterprises Pty Ltd [2013] NSWIRComm 84. 2Sections 181(2)(a) and (b) provide: 181 Costs ... (2) 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 ... 3In written submissions the respondent sought its costs on the following bases: (i) the proceedings were instituted without reasonable cause; and/or (ii) the applications were vexatious in that: (a) the proceedings were so obviously untenable or manifestly groundless as to be utterly hopeless; and/or (b) the proceedings were brought to annoy and/or embarrass the Respondent; and/or (c) the proceedings were brought for a collateral purpose, namely, in order to obtain a 'windfall' settlement for an amount greater than the Applicant's actual loss; and/or (iii) the applications were frivolous in that it (sic) could not possibly succeed. 4The applicant opposes the respondent's application for costs. Brief background facts 5By way of setting out some brief background I refer to various paragraphs extracted below from my decision in TWU and Robar Enterprises at [1], [6], [11] and [12]: Before the Commission are two applications filed by the Transport Workers' Union of New South Wales (TWU). In its capacity as an association of contract carriers under Part 5 of Chapter 6 of the Industrial Relations Act 1996 (the Act) (about which there was no issue) the TWU acts on behalf of DR and KA Bargwanna. DR Bargwanna is Darren Bargwanna and KA Bargwanna is Mr Bargwanna's wife, Kristy Anne Bargwanna. DR and KA Bargwanna operated as a partnership and was, until the contract of carriage was terminated by Robar Enterprises Pty Ltd (the respondent), engaged by the respondent to distribute its products. The respondent, at that time, was a principal contractor operating as a food and related product distributor. Under the contract of carriage the partnership was required to supply its own motor vehicle in order to distribute the respondent's products. ... The contract of carriage, entitled "Distribution Agreement" (the agreement) was signed by Mr Bargwanna and his wife, Kristy Anne Bargwanna, on 12 August 2008. Clause 5 of the agreement dealt with circumstances under which termination of the agreement could be effected by either party. Sub-clause 5(a) provided: Robar agrees that this Agreement may be terminated by the Operator by giving thirty (30) days written notice to Robar. ... Some time in about July or August 2008, Mr Bargwanna purchased a Hino truck and the associated contract driving business from Terrence John Farrell. Mr T Farrell, at that time, had a distribution agreement with the respondent. As part of that agreement, the respondent provided him, free of charge, with a refrigerated motor and pantechnicon (pan), attached to the truck. Under the agreement, he was required to maintain the refrigerated motor and pan in a good working condition at all times and at his own cost. The truck which Mr T Farrell sold to Mr Bargwanna incorporated the same refrigerated motor and pan, which was utilised by Mr Bargwanna during the course of the partnership's engagement by the respondent under the agreement. Following the execution of the agreement by the partnership, Mr Bargwanna began driving the Hino truck for the respondent. The business relationship between Mr Bargwanna and the respondent was uneventful until at least June 2009 after which documentary evidence indicates that the relationship had begun to deteriorate. 6Sections 181(2)(a) and (b) of the IR Act impose very different tests from the "costs follow the event" test under s 181(1) which empowers the Industrial Court to award costs. Section 181(2) in contrast is directed towards a limited and discrete set of circumstances under which the Commission may award costs. Thus the mere fact that the proceedings were resolved in the respondent's favour is not enough to meet the tests imposed in sections 181(2)(a) and (b) (see for example CFMEU v Newcrest Mining [2005] NSWIRComm 129 at [77]). 7The parties' submissions were directed first to s 181(2)(b) and secondly to s 181(2)(a). I propose to adopt the same order in my decision. Legal principles: section 181(2)(b) of the IR Act 8In Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264 to 265 Wilcox J made the following observations about the meaning and application of the expression "a proceeding (is) instituted without reasonable cause": It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. ... 9The expression "institutes proceedings without reasonable cause", appearing in s 181(2)(b) focusses on the institution of proceedings. The parties did not address the meaning or scope of the words "institution of proceedings" however both the applicant and the respondent appeared to adopt in submissions a narrow construction of the words which is consistent with the commencement of proceedings or, at the time of commencing the proceedings. This approach appears to conform to the observations of Ryan J in Imogen Pty Ltd v Sangwin (1996) 70 IR 254 at 261 where his Honour, in commenting on a provision similar to s 181(2)(b) said: The existence of "reasonable cause" within the meaning of s 347 falls to be determined at the time when the relevant proceedings were instituted. The fact that the party instituting the proceedings later discontinues them is therefore not a matter to be taken directly into account in the application of the section. 10Remarks to similar effect were made by Gray J in Geneff v Peterson & Ors (1986) 19 IR 40 in discussing s 197A of the Conciliation and Arbitration Act 1904 (Cth). Section 197A provided that costs may not be awarded, "except where the party against whom the order is made initiated the proceedings vexatiously or without reasonable cause". At [88] his Honour observed, in relation to the provisions: ... the focus of the section is on the institution of the proceedings, and the court should not allow itself to be influenced unduly by the actual result. 11Also of relevance are the observations on s 197A by Northrop J, sitting in the Australian Industrial Court in Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 274: Section 197A is to be considered when proceedings in the court have been completed and dismissed. The principles set out above are to be applied at an early stage of the course of the proceedings. In my opinion, similar principles are to be applied when considering the matters raised by s 197A. Great care must be exercised to ensure that in finding that a party has instituted proceedings vexatiously or without reasonable cause, that party is not improperly deprived of his freedom from liability to pay costs to an opposing party. The test is a substantial one. In considering this matter the court must have regard to all the material properly before it. The test is not subjective to the party instituting the proceedings as at the time of the institution of the proceedings. The conduct of the opposing party prior to the institution of the proceedings may be relevant in deciding whether the proceedings were instituted vexatiously or without reasonable cause. The conduct of the opposing party both prior and subsequent to the institution of proceedings may be relevant to the discretion remaining in the court. It may be difficult to satisfy the test where disputed questions of fact arise and the proceedings eventually are dismissed because the court finds facts adverse to the party instituting the proceedings. Where the test is satisfied, having regard to the general policy of the section, the court may, nevertheless, in the exercise of its discretion, make no order as to costs. 12A similar approach is required when the Commission considers an application under s 181(2) of the IR Act. The approach has been referred to in the authorities as a "two stage process" which relies upon the inter-relationship between s 181(1) and s 181(2) in proceedings of this kind. The provisions operate together when the Commission is exercising its jurisdiction not in Court Session. If the Commission is satisfied that one or more of the paragraphs in s 181(2) are made out in the respondent's favour, the provisions of s 181(1) become operative and the Commission may exercise its discretion to award costs under that provision: see Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232 at [95]; and, Re Operational Ambulance Officers (State) Award (No 2) (2011) 207 IR 303 at [28]. 13The requirement that the Commission be satisfied that the proceedings were instituted without reasonable cause poses a high threshold or as Northrop J in Heidt v Chrysler Australia observed, "The test is a substantial one" (at 274). Observations to that effect were made by the Full Federal Court (Black CJ, North and Mansfield JJ) in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission and Another (2006) 156 FCR 275 at [60]: The question therefore arises whether, as contended by counsel for Ms Hart, the plaintiff instituted the proceeding vexatiously or without reasonable cause. A party does not institute proceedings without reasonable cause merely because that party fails in the argument put to the Court: R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 per Gibbs J at 473. The section reflects a policy of protecting a party instituting proceedings from liability for costs, but that protection may be lost. Although costs will rarely be awarded under the section and exceptional circumstances are required to justify the making of such an order (see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257; 13 ALR 365 per Northrop J), a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 per Wilcox J; see also Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439; and Nilsen v Loyal Orange Trust (1997) 76 IR 180. 14It has been held that an assessment of whether proceedings were instituted "vexatiously or without reasonable cause" is similar to that applied in the exercise of a summary power to stay or strike out proceedings: Heidt v Chrysler Australia Ltd at 272 to 273; Hatchett v Bowater Tutt Industries Pty Ltd [No. 2] 28 FLR 324 at 327. In that latter mentioned decision von Doussa J referred to expressions such as "so obviously untenable that it cannot succeed", "manifestly groundless" and "bad beyond argument" as illustrations of a proceeding instituted, "vexatiously without reasonable cause". Marshall J, in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Nestle Australia Ltd (2005) 146 IR 379 at [4] to [7], who was dealing with an application that the proceedings were instituted without reasonable cause, referred to a number of authorities which had considered the expression and observed: As a Full Court said in Spotless Services Australia Ltd v Marsh SDP [2004] FCAFC 155 at [13]: "Whether a proceeding has been commenced without reasonable cause is relevantly established as a matter of objective fact." In Spotless the Full Court considered that the application for prerogative relief was bound to fail. It ordered costs against the unsuccessful applicant. The expression "bound to fail" is similar to expressions such as "so obviously untenable that it cannot possibly succeed", "manifestly groundless" and "bad beyond argument" as referred to by von Doussa J in Hatchett v Bowater Tutt Industries Pty Ltd (No 2) (1991) 28 FCR 324 at 327; 39 IR 31 at 34. Earlier (at FCR 327; IR 34) von Doussa J said: "The test imposed by the expression 'vexatiously or without reasonable cause' is similar to the one applied by a court on an application for the exercise of summary power to stay or strike out proceedings: see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272-273 and Geneff v Peterson (1986) 19 IR 40 at 87-88." As Gibbs J said in R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473, in respect of a predecessor provision to s 347(1): "In my opinion a party cannot be said to have commenced a proceeding 'without reasonable cause', within the meaning of that section, simply because his argument proves unsuccessful." Further, as Gray J said in Geneff v Peterson (1986) 19 IR 40 at 88: " ... the focus of the section is on the institution of the proceedings, and the court should not allow itself to be influenced unduly by the actual result." Application of legal principles to the evidence: s 181(2)(b) 15The respondent first directed attention to Mr Bargwanna's statement dated 21 November 2012 in which Mr Bargwanna had nominated several defects he said existed at the time he purchased the pantechnicon (the pan). According to the respondent the applicant could not have been mistaken or failed to remember the state of the pan at the time of purchase, nevertheless he commenced proceedings and sought to advance a case that was unsupported by the evidence. Moreover evidence which contradicted the applicant's account, addressed during the proceedings, about which the applicant was aware or ought to have been (according to the respondent) was to the effect that: a. the condition of the Pantek was reasonable at the time he commenced working for the Respondent; b. he was responsible for the maintenance and repair of the Pantek (see the Commission's finding in this respect at [28] and [29]; and c. it was only due to his failure to maintain and repair the Pantek that it fell into disrepair (see [53] of the Commission's decision). 16Accordingly, the respondent says that the applicant was aware, or ought to have been, that the challenge to the validity of the termination of Mr Bargwanna's engagement "would fail". 17During the proceedings the applicant had also contended that the termination of the agreement was harsh. The respondent, in addressing this contention relied on the Commission's analysis of the evidence and the finding that the termination of the agreement was not harsh (TWU and Robar Enterprises at [71]). 18The respondent characterised the applicant's case with regard to the s 314 application as a case which: a. upon the facts apparent to the Applicant at the time of instituting proceedings the Applicant knew, or ought to have known, that there was no substantial prospect of success; and/or b. even on the Applicant's own case (namely, the evidence given by Mr Haigh), it was clear that the proceedings must fail. 19With regard to the application under s 213 the respondent relied upon the following findings of the Commission (TWU and Robar Enterprises at [78] to [82]): Here, the TWU contends that s 210(1)(d) and (g) are engaged because the respondent "victimised" Mr Bargwanna by terminating his contract following a conversation on 16 January 2012 in which Mr Bargwanna indicated that he would be returning to the Commission to pursue a s 332 dispute against the respondent in order to have conciliated the issue concerning the state of the pan. It is contended by the TWU that Mr Bargwanna was threatened by Mr Smith at the conclusion of the conversation on 16 January 2012 when, according to Mr Bargwanna, Mr Smith said to him: When push comes to shove I will take you for every cent you've got. According to Mr Smith, during a telephone conversation with Mr Bargwanna on 16 January 2012, he said to Mr Bargwanna: ... if push comes to shove then I [would] sue [him] for every cent that [he had] cost the business. There are some difficulties with the evidence relied upon by the TWU. Proceeding upon the basis that Mr Bargwanna's recollection of this conversation of 16 January is accurate it occurred at least two days after the respondent sent its "show cause" to Mr Bargwanna. The "show cause" letter is dated 14 January 2012 and clearly shows that at that date the respondent was contemplating the termination of the agreement by the words, "The directors of Robar Distributors now require you to show cause as to why we should continue to honour this contract". In addition, since June 2009, the respondent had been writing or otherwise communicating to Mr Bargwanna various concerns it had with his work performance and with the condition of the pan (and refrigerated motor). On a number of occasions during these communications the respondent advised Mr Bargwanna that if he did not address his conduct and/or attend to the repair and maintenance of the pan that his agreement could or would be terminated for reasons which included his failure to discharge the operator warranties under Schedule III (m) to the agreement. The fact that the conversation in the terms alleged by Mr Bargwanna occurred after these events suggests that the conversation and the filing of the dispute had little or no impact on the respondent's decision to terminate the agreement. Moreover, apart from some reasonable proximity in time (and in the absence of any other causative facts) there is no apparent connection between the subject matter of the conversation and the decision to terminate the agreement. As for the TWU's primary contention that the agreement was terminated because Mr Bargwanna caused to be notified a dispute to the Commission, Mr Smith, in his affidavit, said: On or about 31 January 2012, a letter of termination was provided by the Respondent Company to the Applicant Driver as a result of no correspondence received from the Applicant Driver in relation to show cause letter dated 16 (sic) January 2012 proving two weeks' notice to do so, a copy of which is attached to this statement as attached as annexure "S". The basis on which the Respondent Company terminated the Applicant Driver's contract is contained in the written show cause letter and the letter of termination. The Applicant Driver's proceedings against the Respondent Company, or threat in relation to those proceedings, had absolutely no bearing on the decision to terminate the contract. 20The respondent contends that given the factual history of the matter the applicant knew, or ought to have known, that there was, "no substantial prospect of success" in respect of the s 213 application. In conclusion the respondent submitted that both applications (under s 314 and s 213) were commenced without reasonable cause within the meaning of s 181(2)(b) of the IR Act and an order for costs should be made in its favour. 21In Kanan, a case relied upon by the respondent, Wilcox J characterised the approach to the issue of whether proceedings were instituted without reasonable cause as one "where it appears that, on the applicant's own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lack a reasonable cause". 22Applying these observations of Wilcox J in Kanan a proceeding will not generally have been instituted without reasonable cause if the application depended upon the determination of disputed facts or the resolution of arguable points of law. Support for this proposition may be found in a number of authorities: see for example Re Ross and Others; Ex parte Crozier (2001) 111 IR 282 at 13; Re Nimmo (No. 2) [2011] FCA 728 at [29]. 23The applicant sought to emphasise the absence of any suggestion that either application suffered from a jurisdictional defect or other foundational impediment. The applications were within jurisdiction and required determination on their merits. Nor, as the applicant points out, did the respondent at any time seek to have either application summarily dismissed or stayed on grounds that it was "bound to fail", "obviously untenable" or "manifestly groundless". 24The application under s 314 sought a contract determination with respect to the reinstatement of a contract of carriage that has terminated, and, in the alternative, compensation. The Commission approached the application on the basis that the termination of Mr Bargwanna's contract was "harsh, unjust or unreasonable". That determination involves a mixed question of fact and law: Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325 at [4]. I agree with the applicant that determination of an application under s 314 involves an extremely broad value judgment to be made based upon the whole of the circumstances of a case. 25The termination of Mr Bargwanna's contract involved a range of considerations of disputed questions of fact and law. The applicant in submissions has helpfully identified some of these considerations, including the approach to be adopted to an application under s 314 in circumstances where the Commission had observed that, "the parties were not clear in their submissions as to the legal principles to be applied". The application under s 314 referred to the termination of the contract as "harsh, unreasonable and unjust". In submissions the applicant changed its focus to whether there was a "valid reason" for the termination. Similarly the respondent's submissions focussed on whether the contract was terminated for a "valid reason". This particular legal issue needed to be resolved by the Commission: see TWU and Robar Enterprises Pty Ltd at [55] to [59]. 26Other disputed questions of fact and law requiring resolution during the course of the proceedings in relation to the application sought under s 314 included the following: Whether there was an appropriate or valid reason for the termination of Mr Bargwanna's contract? What was the state of the pan and refrigeration unit on Mr Bargwanna's truck when he commenced driving it and at time of the termination of the Agreement on 30 January 2012? Whether any deterioration of the condition of Mr Bargwanna's pan and refrigeration unit warranted the termination of the contract? Whether the termination of Mr Bargwanna's contract was otherwise harsh having regard to its effect on Mr Bargwanna and his personal circumstances? 27In TWU and Robar Enterprises I identified an issue of some significance which required resolution and which had emerged from the evidence largely addressed in the respondent's case. This evidence tended to contradict Mr Bargwanna's claim that the conditions of the pan was in a "poor state" at the time he purchased the truck and associated pan from Mr T Farrell. After analysing the evidence on the issue (at [31] to [39]) I reached the following conclusions (at [40] to [41]): The net effect of this evidence yields the following conclusions. The pan (and refrigerated motor) were upgraded at a cost of $30,000 at or around some six months to 18 months prior to Mr Bargwanna's purchase of the truck and the delivery run from Mr T Farrell. Moreover, some time soon after the upgrade was completed, the truck and the pan were inspected by the New South Wales Food Authority and registered. It may be inferred from this evidence that the condition of the pan was good enough at that time to pass inspection and undergo registration by the appropriate authority. As to the condition of the pan and the refrigeration unit at the time of purchase by Mr Bargwanna the evidence given by other contract drivers and Mr Scurrah was for the most part general but their general descriptions of the condition of the pan do not support Mr Bargwanna's version. Mr Scurrah, for example, was the loading supervisor and said that he noticed the condition of the truck on a daily basis. In relation to Mr T Farrell's truck his recollection was that when it was purchased by Mr Bargwanna the "whole vehicle" (which I take to include the pan and refrigerated motor) was in "pretty good condition". Mr T Farrell's evidence was a little more specific . He said he kept the truck, the pan and the refrigerated motor in good condition and he carried out (or caused to be carried out) all repairs and maintenance in a proper manner at all times during his contract with the respondent. He also said that when he sold his truck to Mr Bargwanna it was in "good roadworthy condition and that no repairs or maintenance were required to the pan at the time of sale". His evidence was not the subject of any real challenge. He was asked one or two questions about whether the batteries were connected by jumper leads. According to Mr Bargwanna, at the time he purchased the truck, jumper leads ran between the truck's battery and the pan battery because the pan motor's alternator was broken and not charging back to the battery. Mr T Farrell's evidence on this particular claim was as follows: Q. At the time you sold the truck motor and pan to Mr Bargwanna, how was the battery connected to the motor itself, the truck battery? A. From memory that was connected directly off the truck battery on a 20 volt system. So there were two batteries connected in sequence so it was connected off one of those batteries, I believe, I'm not quite sure now, it's a fair while ago. Q. They were connected by lead? A. I believe so, that's a fair while since I have been on that vehicle so it could have quite probably been a separate 12 volt battery but I won't say I guarantee I know because that's what, nearly four, five years ago now. Q. Would you say they would be connected by jumper leads or other? A. No. Q. Were there any leads between the truck battery and the fridge motor battery? A. There could have been a set of jump leads supplied in case that battery didn't have enough starting capacity due to cold weather. This evidence tends to contradict Mr Bargwanna's claim that jumper leads ran between the truck's battery and the pan's battery when he purchased the truck. Mr T Farrell's evidence, I find, was inherently plausible and should be preferred. He readily acknowledged, in response to some of the questions, that he could not be certain of his answers because of the lapse of time. He did not agree that the truck battery was connected by jumper leads to the refrigerated motor battery. He explained that there "could have been" a set of jumper leads supplied in case "that battery" (either the truck battery or the refrigerated motor battery) lacked starting capacity due to cold weather. 28Also relevant to the issue was the evidence of Paul Haigh, a mechanic who worked on Mr Bargwanna's truck and who had provided a statement which was tendered by the applicant in the proceedings. In cross-examination, however, Mr Haigh's evidence tended to support the respondent's case about the condition of the pan after Mr Bargwanna purchased it from Mr Farrell. This departure in oral evidence from Mr Haigh's written statement was considered in my decision at [42] to [43]: The evidence of Paul Haigh should also be mentioned on the issue of the pan's condition at the time Mr Bargwanna purchased the truck. Mr Haigh, a qualified mechanic, said in his affidavit he worked on Mr Bargwanna's truck and pan from about "mid 2008". In his affidavit, Mr Haigh said that in about mid-2008 he inspected Mr Bargwanna's pan and observed loose side panels and wall rivets and loose door hinge bolts. He also said in his affidavit that on or about 3 November 2008, he observed loose rivets on the structural beams on the truck body. However, in cross-examination, Mr Haigh said that he first inspected the truck on 3 November 2008 and that was when he first noticed the loose rivets. He also agreed that at that time he did not observe any other problems with the pan. He was taken through a number of "job cards" annexed to his affidavit. He agreed that the job cards described work performed on the truck not the pan, and that some of the work was performed by his employees. The last job card, dated 19 November 2009, contained the words, "Defect Clearance" under the sub-heading "Work Performed". In his oral evidence, Mr Haigh explained that at that time the truck had a defective rear gearbox seal (that is, the seal was leaking) which was "cleared". Mr Haigh also agreed that he did not perform any work on the truck between 2010 and 2011. He recalled that Mr Bargwanna attended his workshop some time in late 2011 and told him that the truck had been, "defected by the RTA". Mr Bargwanna, he said, asked him to look at the body. Mr Haigh refused, informing Mr Bargwanna that it was not his "field of repair" and he could not sign off on it until it was properly repaired by a specialist. He agreed that between 2009 and 2011 the condition of the pan had "deteriorated". Taken as a whole, Mr Haigh's evidence, together with the evidence of Mr T Farrell and the other contractors who worked for the respondent, and who made general observations of the condition of the pan before and after Mr Bargwanna purchased the truck, is compelling evidence. It tends to contradict Mr Bargwanna's evidence that the pan was in a "poor state" when he purchased the truck. Mr Haigh's evidence, in particular, does not support Mr Bargwanna's version that the pan had the defects nominated by him at the time of purchase. Mr Haigh, or his employees, serviced the truck (but not the pan) after it was purchased by Mr Bargwanna, according to the records, between 3 November 2008 and 19 November 2009, and apart from observing loose rivets on 3 November 2008, Mr Haigh said he did not notice any other problems with the pan. It may be concluded from this evidence that the pan was not in the "poor state" described by Mr Bargwanna in his affidavit at the time he purchased the truck from Mr T Farrell in August 2008. 29At the time the proceedings were instituted (or when Mr Haigh provided his statement) it could not have been expected on any reasonable basis that Mr Haigh's evidence given during the hearing would depart from his written statement to the extent that it tended to contradict the contents of that statement and ultimately provide no, or little, assistance to the applicant's case. More to the point the evidence of Mr T Farrell, the other contractors and Mr Haigh's evidence under cross-examination, which I found tended to contradict Mr Bargwanna's evidence that the pan was in a "poor state" at the time he purchased the truck, depended upon an assessment of all of the evidence adduced during the hearing. 30In addition the applicant had asserted that the termination of the contract was "harsh", a matter which required consideration of quite different issues from those relevant to a consideration of whether the termination was unjust or unreasonable. This issue of whether the termination was harsh received separate consideration (TWU and Robar Enterprises at [60] to [70]). As the applicant pointed out it was not disputed that some negative financial consequences were caused by the termination of the contract, for example, the sale of a truck at a low price. It could not be said in my view, based on the matters raised for consideration in relation to whether the termination of the contract was harsh, that the applicant's case was not arguable. 31The respondent in submissions contended that the facts apparent to Mr Bargwanna at the time the TWU commenced proceedings should be taken to be the facts apparent to the TWU. The contentions were advanced without reference to any authorities on the point. Under the IR Act applications may be made in relation to contract determinations by a limited class of parties nominated under s 311. The limited class does not extend to individual contractors. In the normal course the particular party (here the TWU) would take instructions from the contract carrier whom it represents (here Mr Bargwanna). There is nothing to indicate that the normal course was not followed. However, no findings were made that Mr Bargwanna concocted his evidence or that he or any other witness lied. The Commission simply preferred other evidence to that of Mr Bargwanna's evidence and it does not follow from this that there was no basis for the TWU to commence proceedings on Mr Bargwanna's behalf. In other words, it cannot be said on any reasonable basis that at the time the proceedings were instituted the applicant's case was "obviously untenable", "manifestly groundless" or "bound to fail". 32For these reasons I do not find that the s 314 application was instituted "without reasonable cause". The respondent's application for costs under s 181(2)(b) is refused. 33I turn now to consider the application under s 213 of the IR Act. 34At issue in relation to the application under s 213 was whether Mr Bargwanna was "victimised" by the respondent because he notified a second dispute to the Commission. Resolution of that issue largely depended upon the timing of a telephone conversation said to have occurred between Mr Bargwanna and Graham Smith, a director of the respondent, as well as the application of the statutory presumption in s 210(2) which is rebuttable, and which applies to the employer respondent. In resolving the issue I followed the approach set out in Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (2012) 290 ALR 647; [2012] HCA 32 per French CJ and Crennan J: see TWU and Robar Enterprises at [77]. My analysis and conclusions are set out in TWU and Robar Enterprises at [78] to [84]. As the applicant pointed out in submissions, in an application under s 213 it is presumed that an employee suffered a detriment because of a matter referred to in s 210(1) unless, under s 210(2) the presumption is rebutted. A respondent can only succeed in rebutting the presumption by putting forward evidence as to the subjective "state of mind of the decision maker": Board of Bendigo v Barclay at [42] to [45]. Accordingly the outcome of the proceedings turns upon a matter outside the direct knowledge of the applicant, namely the subjective motivation of another person. In the present matter Mr Smith gave direct evidence contained in his statement and in oral examination. I concluded that the direct evidence given by Mr Smith (to the effect that the notification of a dispute and the conversation with Mr Bargwanna had no bearing on the decision to terminate the contract) constituted reliable evidence capable of rebutting the presumption in s 210(2). Given that that was the basis upon which the applicant's application under s 213 was dismissed, it could not be said that the application was instituted without reasonable cause as required under s 181(2)(b) of the IR Act. Application under s 181(2)(a) of the IR Act 35It remains to consider the respondent's application for costs under s 181(2)(a) of the IR Act. 36In pressing its application under s 181(2)(a) the respondent relied on its submissions made in respect of its s 181(2)(b) application. Accordingly my analysis and my findings in respect of the application made under s 181(2)(b) apply with equal force to s 181(2)(a). However, the respondent also contended that the applications under ss 314 and 213 became frivolous and/or vexatious at a later stage in the proceedings either from 16 November 2012 or from 23 January 2013. The first date is advanced on the basis that the proceedings were said to have been maintained with the intention of annoying or embarrassing the respondent or in order to obtain a "windfall" settlement for an amount significantly greater than the applicant's actual loss. Underpinning this particular contention were the following matters: On 16 November 2012 the Respondent made an offer of $20,000 to the Applicant in order to settle the proceedings. As at that date, the Applicant had: a. been earning an income of $490 (gross) each week since February 2012 (although the Applicant was receiving workers compensation payments between mid February 2012 and July 2012); b. been earning an income (in addition to the above) of $1,100 (net) each week since August 2012 - which amounts to approximately $1,400 (gross); and c. received a lump sum payment of $24,000 for a workplace injury against Newcrest Mining. This means that in the first 6 months after the Applicant's agreement was terminated the Applicant received approximately $36,740 (gross). In the following 6 months, the Applicant received $49,140 (gross). The Applicant's income from the Respondent was $1,800 (gross) per week not accounting for the Applicant's running costs. This means that the Applicant's loss even if he were totally successful in his claim for compensation (that is 12 months remuneration being $93,600 (gross)) would have been less than (having regard to the Applicant's running costs): $93,600 (gross) (12 months remuneration) less $85,880 (gross)(income earned) = $7,720 In circumstances where the Respondent offered $20,000 to resolve the proceedings (i.e. an amount greater than the Applicant's actual loss over a 12 month period), it is clear that the Applicant sought to continue the proceedings either to annoy and/or embarrass the Respondent or in order to attempt to obtain a 'windfall' settlement for an amount significantly greater than his actual loss. In such circumstances the Commission would consider the proceedings to be vexatious from 16 November 2012 onwards. In this regard and in the alternative, the Respondent seeks an order that the Applicant pay its costs from 16 November 2012 onwards. 37The second date, "from 23 January 2013" relies on the date the written statement was obtained from Mr Haigh dated 16 January 2013, as well as the evidence he gave in cross-examination. 38The sole basis upon which the respondent contends that the applications became frivolous or vexatious is that s 181(2)(a), unlike s 181(2)(b), does not contain the phrase, "instituted the proceedings". In reply submissions the respondent submitted that the absence of those words from s 181(2)(a) demonstrates "a clear indication by Parliament that the test is not limited to the time at which the proceedings are instituted". 39Section 181(2)(a) has received judicial consideration in this jurisdiction. In Peden v Lake Macquarie Refrigeration Pty Ltd (2004) 134 IR 149, a Full Bench in examining the provision cited with approval the following passage from Attorney-General v Wentworth (1988) 14 NSWLR 481 at 487: 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." 40The same passage was approved and applied to s 181(2)(a) by a Full Bench in Re Operational Ambulance Officers (State) Award (No. 2). It is noteworthy that both Full Bench decisions applied s 181(2)(a) by considering whether the applications were instituted (with the intention of annoying or embarrassing the respondent) or "brought for" collateral purposes. Based on these authorities the applications presently under consideration did not become vexatious or frivolous at a later time within the meaning of the sub-section (either as a result of the making of an offer or the emergence of a piece of evidence coming to light during the proceedings). There is nothing in the material advanced by the respondent to sustain a suggestion that the applications were maintained with the intention of annoying or embarrassing the respondent. 41The respondent did not take the Commission to any authorities in support of its contention in relation to its proposed construction of s 181(2)(a) of the IR Act. The authorities in this jurisdiction which have expressly considered the provision are against the weight of the contention. 42Even if I had come to the view that the applications could become vexatious at a later stage in the proceedings I would have concluded that the respondent's contentions were without merit. First, as the applicant points out the suggestion that the proceedings were continued to obtain a "windfall" settlement is without foundation. The pursuit of compensation as a remedy expressly provided for in the IR Act could not constitute a collateral purpose that might justify a finding that the applications were or became vexatious or frivolous. If support for this proposition were needed it may be found in Holland v Nude Pty Ltd (t/as Nude Delicafe) (2012) 224 IR 16 at [11] and [19]. Secondly, the evidence of Mr Haigh both in his written statement and during his cross-examination has been considered earlier in this decision. There is no warrant for any departure from my reasons and conclusions with respect to Mr Haigh's evidence and they apply with equal force to the respondent's application under s 181(2)(a) of the IR Act. 43For the foregoing reasons the respondent's application under sections 181(2)(a) and 181(2)(b) of the IR Act is refused and the application will be dismissed. Order 44The respondent's application for costs under sections 181(2)(a) and (b) of the Industrial Relations Act 1996 is refused. The application is dismissed. ********** 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. Decision last updated: 14 March 2014