Blackbird Energy Pty Ltd v Turner [2007] QIRC 49 (2007) 185 QGIG 81

[Extract from Queensland Government Industrial Gazette, dated 8 June, 2007, Vol. 185, No. 6, pages 81-85] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 - s. 335 - application for costs Blackbird Energy Pty Ltd AND Donna Maree Turner (B/2007/15) DEPUTY PRESIDENT BLOOMFIELD 30 May 2007 Application for costs - Whether case mounted without reasonable cause - Whether Applicant caused costs to be incurred by her unreasonable acts or omissions - Finding that the Applicant caused costs to be incurred by the Respondent on the basis of her unreasonable acts or omissions - Finding that trial should have lasted for 1 day instead of 3 days - Costs in the amount of $16,000 awarded. DECISION By way of decision released on 2 January 2007 (now published at 184 QGIG 17) the Commission as presently constituted dismissed an application (B/2005/599) by Donna Maree Turner in which Ms Turner had sought reinstatement with Blackbird Energy Pty Ltd. In doing so the Commission found, inter alia: "In all of the circumstances, and notwithstanding the reasons for termination contained in the letter of 5 April 2005, I have concluded there was nothing harsh, unjust or unreasonable about the Applicant's termination. The Applicant's omissions and failures were serious ones and, in my view, were ample to justify Blackbird's decision to terminate her employment, with or without notice, on 5 April 2005.". On 1 March 2007, solicitors representing Blackbird Energy Pty Ltd (Blackbird) filed the present application in the Commission seeking recovery of costs incurred in Blackbird's defence of the original application, in the amount of $73,634.46. The application was made on the basis that the Applicant, Ms Turner, made her original application without reasonable cause and/or caused costs to be incurred by Blackbird because of her unreasonable acts or omissions connected with the conduct of the application. Relevantly, s. 335(1) of the Industrial Relations Act 1999 (the Act) provides: "(1) The court or commission may order a party to an application to pay costs, including witness expenses and other expenses, incurred by another party only if satisfied - (a) the party made the application vexatiously or without reasonable cause; or (b) for an application for reinstatement--the party caused costs, including witness expenses and other expenses, to be incurred by the other party because of an unreasonable act or omission connected with the conduct of the application.". s. 335(1)(a) - Without Reasonable Cause In summary form, Ms Moody of Counsel, who appeared for Blackbird, submitted that the original application for reinstatement was made without reasonable cause because it must have been clear to Ms Turner, from the time she commenced the application, that it had no reasonable prospects of success. This was said to be for a number of reasons including: Ms Turner knew that her boyfriend had stolen a large sum of money from Blackbird during the period she was manager of its service station at Mt Tamborine; Ms Turner knew that she had failed to carry out a direction of a manager of Blackbird to the effect that she instruct her boyfriend to "disassociate" himself from the service station in that she - failed to inform the other cashiers at the service station of the manager's direction, meaning they continued to allow the boyfriend to have access to the service station and the cash register; and continued to let her boyfriend come into the service station and access the cash register (as evidenced by daily cash register print-outs, where the boyfriend wrote messages to Ms Turner); Ms Turner knew the above failures had presented her boyfriend with the opportunity to steal from Blackbird; Ms Turner knew that her boyfriend had placed large cash deposits into her bank account, totalling over $12,000, in circumstances where she either knew, or should reasonably have known, that such monies were stolen from Blackbird; Ms Turner failed to report to Blackbird, or the Police, that she had received such monies. In reply, Ms Turner argued: she had not been made aware of the reasons for her termination at the time she lodged her unfair dismissal application; -- 1 of 4 -- 2 she had only been informed that her boyfriend had stolen monies from Blackbird at the first, of three, conciliation proceedings held in the Commission; the Commissioner who chaired those conciliation proceedings ultimately issued a certificate which informed her that she had good prospects for success; if Blackbird had produced the evidence they claimed to have had during the conferences the matter may not have proceeded to trial; she did not know that the $12,000 placed into her bank account by her boyfriend may have been stolen and still did not accept that there was evidence to show that it came from Blackbird. I am unable to accept Blackbird's submission to the effect that Ms Turner's application never had any reasonable prospect of success at the time it was lodged nor, more relevantly from my perspective, at the time she elected to pursue the matter at trial. At that stage, Blackbird had not fully disclosed its hand. Whilst Ms Turner might have been aware that the Police were investigating her boyfriend for the theft of monies during his employment by Blackbird, and her letter of termination informed her that she was being terminated "due to misappropriation of funds", nothing had been advanced to suggest Ms Turner's complicity, either directly or indirectly. The degree of complicity was a matter to be established at trial on the balance of probabilities. Even then, Ms Turner's involvement was established to be by way of her omissions, rather than directly. As a result, it was always open to her to argue that, all things considered, her termination was harsh, unjust or unreasonable within the contemplation of the provisions of s. 77 of the Act. As it turned out I made the following findings in respect of this point in my earlier decision: "Technically, the termination appears to be in contravention of s. 77(a) to (c) inclusive and to be one which is harsh, unjust or unreasonable. However, that is not the end of the matter. Section 77(d) still has an important role to play before a final conclusion can be drawn. This point is reinforced by the decision in Byrne v Australian Airlines Ltd, where McHugh and Gummow JJ stated (185 CLR 410 at 466) '...the question... is whether, in all the circumstances, the termination of employment disobeyed the injunction that it not be harsh, unjust or unreasonable. This is not answered by imposing a disjunction between procedure and substance. It is important that matters not be decided simply by looking to the first issue before there is seen to be any need to enter upon the second.'. At 466-467 their Honours cite with approval the decision of the Industrial Court of South Australia in Hocking v Public Service Association of South Australia [(1978) 45 SAIR 637] where the employer had terminated the employee on the strength of a rumour without there first having been an investigation but where, after the dismissal, the employer ascertained facts which proved that the rumour relied upon was correct. In approving the decision below, their Honours observed that although the method adopted to effect the dismissal might have been harsh, unjust or unreasonable that was not the end of the matter. The actual dismissal itself had to be considered. When the whole of the circumstances were looked at the dismissal was not one which could be described as harsh, unjust or unreasonable. In my view the same comment can be made in this case. All facts considered, there was nothing harsh, unjust or unreasonable about the Applicant's termination.". In light of the above findings I cannot agree with Ms Moody's submission that, either at the time the application was lodged or at the time Ms Turner made the election to pursue the matter at trial, the matter was one which objectively speaking had no reasonable prospects of success. s. 335(1)(b) - Unreasonable Acts or Omissions In support of Blackbird's application for costs pursuant to s. 335(1)(b) Ms Moody relied upon the following unreasonable acts or omissions on the part of Ms Turner in the conduct of her application: giving evidence which was at times deliberately self-serving or evasive, and at times deliberately untrue - to better tailor her case - requiring Blackbird to unnecessarily lead evidence from it's own witnesses and to extensively cross-examine Ms Turner to prove the falsity of her assertions, thus leading to undue prolongation of the matter; her unreasonable conduct in failing and/or refusing to disclose copies of all relevant bank statements until directed to do so by the Commission during the trial; failing to inform Blackbird and/or the Commission that she had received (and failed to account for) over $12,000 in funds from her boyfriend in circumstances where she knew that her boyfriend had stolen considerable sums of money from Blackbird. Indeed, the information that over $12,000 had been deposited into Ms Turner's bank account only became apparent to -- 2 of 4 -- 3 Blackbird after Ms Turner complied with a direction from the Commission (referred to immediately above) to produce copies of certain bank statements. Even then she gave a variety of explanations as to why, and how, it got into her account (see more below). Each of these points was expanded upon in Blackbird's written outline of submissions as well as in Ms Moody's oral submissions. In particular, Ms Moody drew my attention to various aspects of the case to highlight where Ms Turner had given deliberately self-serving, vague or false evidence. In her written submissions in reply Ms Turner essentially took the opportunity to attempt to re-argue certain aspects of the original case, at times taking issue with certain of my findings in the original decision as well as presenting a "fresh take" on certain elements of her earlier evidence and/or my findings. Much of this material was not admissible and has not been considered in deciding this fresh application. However, Ms Turner also, rightly, disputed other aspects of Blackbird's submissions stating that she had not withheld certain bank statements (as alleged by Blackbird) as well as indicating that certain end of shift and end of day reconciliations, relied upon by Blackbird to establish it's case, had not been discovered prior to the commencement of the proceedings. By and large, however, Ms Turner generally submitted that she had pursued her application in the reasonable belief that she had been wrongly dismissed; that the trial had only run for the three days the Commission originally allocated; and, Blackbird could have prevented the trial running as long as it did if it had presented it's evidence in the conciliation conferences and had not waited until the trial. Conclusions Each of the parties accused the other of not coming to the trial with "clean hands". Blackbird (effectively) accused Ms Turner of having received over $12,000 of stolen monies from her boyfriend without disclosing the receipt of such monies to either the Police, Blackbird or the Commission in circumstances where she must have known (or should reasonably have been expected to have known) that such money was stolen. On the other hand, Ms Turner accused Blackbird of failing to disclose certain daily takings reconciliations until the commencement of the trial as well as failing to produce the evidence it intended to rely upon during the conciliation proceedings. While such matters might be relevant in the eyes of the particular party raising them it is only the latter issue which, or so it seems to me, is of any direct relevance to the current application for costs. Ms Turner's submission seems to imply that she elected to take her case to trial not so much on the basis of what she knew herself, but rather, what she thought might be produced by Blackbird in opposition to her application. This is also reflected in the way she approached the trial. Her behaviour during the trial suggested to me that she had essentially adopted a position whereby she would admit nothing that would have the effect of establishing her complicity in the thefts - directly or by omission - instead transferring the onus completely upon Blackbird to prove the level and degree of her omissions. In retrospect, it is now apparent that apart from admitting that she worked at the service station and had been its manager for a period Ms Turner effectively denied every other important fact relevant to the theft, and how it had occurred. For example, the list is not exhaustive, Ms Turner denied: being trained how to read the end of shift and daily X-read (reconciliation) reports; that she understood the significance of any refund or negative entry on the X-read reports; that she knew what a negative entry for trailer hire meant; that Ms Nixon had raised the negative trailer hire entries on the X-read reports with her as a matter of concern; that she had "fobbed" Ms Nixon off by stating that such entries were "... just an EFTPOS thing" and that "...it happens all the time"; that she had given false evidence by asserting that she had informed Mr Rollo "there was something going on but that she couldn't quite get to the bottom of it" prior to him coming to site on 4 February 2006; that Mr Rollo had instructed her on 4 February 2006 to make sure that her boyfriend "disassociated himself" from the store; that Mr Rollo had instructed her to inform the other cashiers of the instruction immediately above; that Mr Rollo had directed that her boyfriend not be allowed to attend at the service station except in the capacity as a customer; that contrary to the above instruction she had not only allowed her boyfriend to continue to come to the service -- 3 of 4 -- 4 station she had also allowed him to operate the cash registers. Further, as I indicated in my earlier decision, Ms Turner "provided a number of unsatisfactory, and at times unbelievable explanations" about the source of over $12,000 deposited to her credit card account during February and March 2005. After giving clearly fabricated evidence about how her boyfriend had obtained that money and why he would have put it in her bank account Ms Turner ultimately, extremely reluctantly, admitted that she accepted, with the benefit of hindsight, that the cash deposits had come from funds stolen by her boyfriend from Blackbird. With due respect to Ms Turner, such a concession should have been made at the outset. In the end result, I have concluded that there were a considerable number of unreasonable acts or omissions by Ms Turner in connection with the conduct of the application. The giving of false evidence and her refusal to accept or concede certain matters put to her caused Blackbird to be put to unnecessary time, effort and expense to prove certain matters and to extensively cross-examine Ms Turner. This all had the effect, in my assessment, of turning what could have been a 1 day case into a 3 day case. Further, Blackbird was forced to produce, and take Ms Turner to, end of shift and daily reconciliations to establish that Ms Turner could not (or should not) have failed to notice a whole series of negative (i.e. refund) entries had she been doing her job properly. In addition, and perhaps more importantly, Ms Turner should have been acutely aware (as I wrote in my earlier decision) that "as a direct consequence of her failure to implement Mr Rollo's direction and her failure to investigate or report Ms Nixon's concerns about the negative entries on the X-read report, the Applicant created an opportunity, or failed to curtail the opportunity, for her boyfriend to steal over $24,000 between 4 February 2005, when Mr Rollo gave his direction, and 27 March 2005, when the thefts were first discovered.". Had she not lied about these matters, amongst others, the case would have had a vastly different complexion. In all of the circumstances, I have concluded Ms Turner's unreasonable acts and omission in connection with her conduct of the application should result in an award of costs against her. The only question is in the quantum. Leaving aside the costs incurred by Blackbird in mounting the current application pursuant to s. 335 of the Act, the materials filed with the Affidavit of Ms Foreman disclose that Blackbird incurred professional fees for its solicitor and counsel in the amount of $73,634.46. However, $11,908.22 of this amount is shown to be in respect of "Misappropriation of Funds". Whether that relates to the present application or other matters is unclear. The remainder, in the amount of $61,726.24, is said to be in relation to "Donna Turner- dismissal". However, apart from a detailed invoice from counsel to Blackbird's solicitors the make up of the professional fees claimed is not disclosed. Without in any way suggesting doubt about the bona fides of the professional fees charged, I have decided that whilst Blackbird is certainly entitled to recover a proportion of its cost, I should pay greater regard to the published Scale of Costs (without necessarily adopting it) rather the costs actually incurred, and to take into account all of the circumstances of the case. This includes Ms Turner's modest financial circumstances and the fact that the case was likely to involve a one day trial even if Ms Turner had admitted all of the issues canvassed above. In the end result I have decided to award costs on a global basis in the quantum of $16,000 with such payment to be made within 22 days of the date of release of this decision. Such amount is generally calculated on the premise that costs for 2 days of trial and 4 days of preparation (for solicitor and counsel) were unnecessarily incurred by Blackbird. The Commission determines and orders accordingly. A.L. BLOOMFIELD, Deputy President. Hearing Details: 2007 20 April (written submissions - Applicant) 4 May (written submission - Respondent) 11 May (written submission in reply - Applicant) 15 May (Hearing) 28 May (Transcript available) Appearances: Ms M. Moody, instructed by Ebsworth & Ebsworth Lawyers on behalf of the Applicant. Ms D. Turner, Respondent, on her own behalf. Released: 30 May 2007 Government Printer, Queensland The State of Queensland 2007. -- 4 of 4 --