Belmont Pacific Pty Ltd v Gale [2006] QIRC 147 (2006) 183 QGIG 862

[Extract from Queensland Government Industrial Gazette, dated 17 November, 2006, Vol. 183, No. 16, pages 862-864] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 - s. 331 - application to dismiss Belmont Pacific Pty Ltd AND Nicholas Gale (B/2006/201) COMMISSIONER BLADES 8 November 2006 Application to dismiss unfair dismissal application - Unfair dismissal application discontinued before the hearing - Application for costs - Section 335(1) Industrial Relations Act 1999 - Vexatiously or without reasonable cause - Unreasonable act or omission connected with the conduct of the application - No allegation vexatious - Employer a trading corporation - Employer not sufficiently identified in employment contract - Held unfair dismissal application not commenced without reasonable cause - Offer by employer to settle "strike out" application if employee undertook to make no application to Australian Industrial Relations Commission - Offer rejected - After filing the unfair dismissal application, employee did not further progress his claim - "Application" refers to the unfair dismissal application - Held no unreasonable act or omission in connection with the conduct of the application - Costs application dismissed. DECISION Mr Nicholas Gale (the respondent) filed an application in the Commission alleging that he was unfairly dismissed on 29 August 2006 by Goodlife Health Clubs, Ashgrove. It eventuated that the actual employer was Belmont Pacific Pty Ltd (the applicant). On 3 October 2006, the applicant filed an application in the Commission seeking to dismiss the unfair dismissal application for want of jurisdiction. There was also an application for costs. The basis of the application was that the applicant is a constitutional corporation and that exclusive jurisdiction is vested in the Australian Industrial Relations Commission by virtue of s. 16(1) of the Workplace Relations Act 1996 (Commonwealth). The unfair dismissal application was discontinued by the respondent on 30 October 2006. The respondent accepted that there was no jurisdiction but that acceptance only came about after a conciliation conference was held on 4 October 2006. This application is about costs. The applicant does not allege that any actions of the respondent were vexatious but that the unfair dismissal application was made without reasonable cause and that the respondent has since caused costs to be incurred because of unreasonable acts or omissions. The jurisdiction to award costs arises by virtue of s. 335(1) of the Industrial Relations Act 1999 (the Act) which provides: "335 General power to award costs (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.". A chronology of events is as follows: 31.8.06 Application for reinstatement filed by respondent. 25.9.06 Letter from applicant to respondent advising respondent that this Commission had no jurisdiction and the reasons why. It was sought that he discontinue his application by close of business on 29 September 2006 or a strike out application would be filed together with a costs application. 29.9.06 Respondent replied disagreeing with the "legal advice" contained in the applicant's letter and indicating that he was happy for the Commission to make the decision one way or the other. He also indicated that if the Commission did not have jurisdiction, he would file in the Australian Industrial Relations Commission. 2.10.06 Application to dismiss the unfair dismissal application filed in the Commission by applicant. Letter to respondent by applicant advising that costs would be sought unless the reinstatement application was immediately withdrawn. -- 1 of 3 -- 2 4.10.06 Conciliation conference in unfair dismissal application held before a Commissioner who issued a certificate under s. 75 of the Act stating that "the Commission is satisfied that the application does not fall within the jurisdiction of this Commission". 19.10.06 Directions Order issued setting down the strike out application for hearing on 6 November 2006. 23.10.06 Letter from applicant to respondent offering to withdraw the "strike out" claim and the claim for costs if the respondent discontinued the unfair dismissal claim and confirmed in writing that respondent would not make any application under the Workplace Relations Act 1996 (Commonwealth). 30.10.06 Unfair dismissal application discontinued. There were also some telephone calls after the respondent received the 23 October 2006 letter where the respondent was given an extension of time to discontinue. On 30 October 2006, in a telephone call to the applicant he rejected the settlement offer but filed a discontinuance. In other words, he provided no confirmation in writing that he would not make an application to the Australian Industrial Relations Commission. The respondent has argued that he accepted the advice of the Commissioner at the conciliation conference and took no further action to pursue the unfair dismissal application. He also argued that he needed to hear from someone impartial that he had no case. He failed to discontinue because he lacked the $20.00 necessary for parking fees to attend the Commission to file the appropriate document. It is significant that after the conciliation conference, he did nothing to pursue his unfair dismissal application. There is a concession by the applicant that the unfair dismissal application was not made vexatiously so the first question is whether the application was made without reasonable cause. The respondent was unrepresented. His contract of employment was with an entity described in the written contract as "Goodlife Health Clubs, Ashgrove". The Federal Work Choices law is new (having commenced on 27 March 2006) and it is understandable that a worker alleging unfair dismissal might fail to appreciate that there was no jurisdiction in the Commission to hear his application. There was nothing about the description of the employer as "Goodlife Health Clubs" to suggest it was a trading corporation, a fact which denied jurisdiction to this Commission. It could have been and in fact appears to be, no more than a business name which, more often than not, is operated by natural persons. The description of the employer in his employment contract did not suggest it was a trading corporation and without further information, even lawyers would have been uncertain. In MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (2000) 164 QGIG 370, Hall P held that s. 335(1)(a) of the Act is aimed at the case which was objectively recognisable as one which could not succeed at the time when the application was made. There can be no finding that the application was instituted without reasonable cause. It was not objectively recognisable without further information beyond what was contained in the employment contract, that the employer was a trading corporation. That information only came to light when the 25 September 2006 letter was sent. The next question is to identify what the "unreasonable act or omission in connection with the application" was. It is emphasised that the "application" is the application for reinstatement. After the conciliation conference when the respondent was told by the Commissioner that the Commission had no jurisdiction, he took no action to progress his application. The only action taken was that of the applicant to promote its "strike out" application. To settle that, the applicant (under cover of the 23 October 2006 letter) required the respondent to "confirm in writing that in recognition of our client's proposed forbearance in withdrawing its strike out application you will not make any application under the Workplace Relations Act in relation to the termination of your contract with our client". It is a basis to the application for costs that the respondent was guilty of an unreasonable act or omission in failing to discontinue the unfair dismissal application and provide that written confirmation in response to that offer. But that requirement purported to limit the respondent's right to take action in the Australian Industrial Relations Commission. The respondent believed he had a claim against the employer and still believes it. He is not required to accept the legal advice offered by his adversary. It was entirely understandable that he rejected the offer. Whether the applicant has a claim in the Australian Industrial Relations Commission or not is beyond the ambit of this decision. If his case is so lacking in merit as to warrant a costs application in that jurisdiction, that is a matter he will have to face. But I think it was unreasonable, as part of an offer to settle the "strike out" application that he was required to forebear from all further action. There was no requirement at any stage for the applicant to pursue the strike out application. More importantly, Mr Gale had not taken any steps to have his application listed for hearing at any time after the conference. In fact he did nothing himself to progress the application after it was filed. The conciliation conference on 4 October 2006 was automatically scheduled by the Commission when a Directions Order was issued on 6 September 2006. -- 2 of 3 -- 3 No instance of an unreasonable act or omission in connection with the conduct of the unfair dismissal application has been identified. The authority under s. 335(1) of the Act to award costs has not been enlivened. The application for costs is dismissed. B.J. BLADES, Commissioner. Hearing Details: 2006 6 November Appearances: Mr D. Quinn of Carne Reidy Herd Lawyers for the applicant. Mr N. Gale on his own behalf. Released: 8 November 2006 Government Printer, Queensland The State of Queensland 2006. -- 3 of 3 --