Eisenmenger v Lutheran Church of Australia, Queensland District [2006] QIRC 60 (2006) 182 QGIG 10

[Extract from Queensland Government Industrial Gazette, dated 5 May, 2006, Vol. 182, No .1, pages 10-12] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 - s. 335 - application for costs Raymond Alan Eisenmenger AND Lutheran Church of Australia, Queensland District (B/2003/1662) COMMISSIONER FISHER 21 April 2006 Application for costs - Industrial Relations Act 1999 s. 335 - Reinstatement decision - Commission findings - Further decision - Applicant applies for costs on indemnity basis and in the alternative - Industrial Relations (Tribunal) Rules 2000 - Rule 66(1)(d) - Partial costs awarded - Parties to confer over 14 days - Liberty to apply if no agreement - Commission reserves discretion to award global amount. DECISION On 2 March 2005, the Commission as currently constitutued released its decision with respect to the application for reinstatement filed by Pastor Raymond Eisenmenger ([2005] 178 QGIG 203). Amongst the findings made by the Commission were the following: (i) that the Commission had the jurisdiction to entertain the application; (ii) that only one of the three allegations made against Pastor Eisenmenger could be sustained and then only in part; (iii) that procedural fairness had not been afforded to Pastor Eisenmenger; and (iv) that the dismissal of Pastor Eisenmenger from his position of Pastor and School Chaplain at St Peter's Lutheran College (SPLC) Indooroopilly was harsh, unjust or unreasonable. For reasons given in the decision, the Commission did not order a remedy at that time but instead ordered the parties to confer. In the result, the parties could not agree and on 16 September 2005, the Commission as constituted, released a further decision ordering the re-employment of Pastor Eisenmenger to another Lutheran School. Consequential orders, including the payment of lost remuneration, were also made ([2005] 180 QGIG 519). Pastor Eisenmenger now seeks an order for costs. His primary argument is that during the conciliation phase the parties agreed on a process to try to resolve the dispute between them. That process involved Pastor Eisenmenger being assessed by a mutually agreed psychiatrist for whom the parties prepared a joint brief. Importantly the parties agreed to the following: "The psych (sic) is to provide a report to both parties and in the event that the report is supportive of the applicant performing in a school environment then the respondent undertakes to support the applicant to the extent possible (to secure) such employment in addition to the ongoing support already in place for an appointment to a parish.". (para 6, exhibit C1). Pastor Eisenmenger submitted himself for assessment to Dr Sundin. Her report concluded that she could find no evidence to suggest that Pastor Eisenmenger would not be able to respond in an appropriate fashion to the challenges posed to teachers and supervising staff in a normal unsupervised school environment. Despite Dr Sundin's findings, the respondent, the Lutheran Church of Australia Queensland District (LCAQD) did not provide the support as outlined in paragraph 6 of exhibit C1 above. Accordingly, Pastor Eisenmenger contends that this act or omission triggers the costs power found in s. 335 (1)(b) of the Industrial Relations Act 1999 (the Act). Had LCAQD facilitated his return to a school environment then the hearing would have been unnecessary. By the failure of LCAQD to comply with the agreed process, Pastor Eisenmenger was put to significant cost in prosecuting his application in which he was ultimately successful. Costs are sought on an indemnity basis with an alternative course of action proposed should this argument be unsuccessful. LCAQD opposed the application for costs on a number of grounds. In essence these were: (i) Pastor Eisenmenger was not wholly successful in his application. He was accorded one of the remedies available but not the primary remedy of reinstatement to SPLC which Pastor Eisenmenger sought; (ii) one of the allegations against Pastor Eisenmenger was largely made out; (iii) that with respect to the aftermath of the psychiatric assessment, Pastor Eisenmenger had consistently disclaimed interest in a parish based call. -- 1 of 3 -- 2 Conclusion It is true, as Mr Horneman-Wren submitted, that mere success or mere failure does not warrant an order for costs. Section 335(1)(b) of the Act requires there to be something more, that is, that there had been an unreasonable act or omission connected with the conduct of the application on the part of one party that causes another to incur costs. In my view that test has been satisfied in this case. The parties agreed to a process in conciliation before Brown C on 23 February 2004. That agreed process was documented by the Commissioner's own hand, see exhibit C1. The Commission as constituted also had cause to comment on the process and the subsequent events in its decision of 2 March 2005 where the following was said: "Despite the assessment being part of an agreed process, the DDC declined to implement the agreed process. Pastor Jaensch said that 'Pastor Eisenmenger may not have a medically recognised personality disorder but he still has a pattern of behaviour that warrants removal from the classroom.'. To reject the findings of one independent panel may be able to be explained, to reject the consequences of a second report when it is also a part of an agreed process to find a resolution is churlish. Both parties would have been aware of the benefits and risks associated with the process and must have carefully considered whether they were worth taking. While Pastor Jaensch's comments may be construed as accepting Dr Sundin's medical assessment, the Church reneged on its agreement to be supportive of assisting Pastor Eisenmenger to return to a school in the event the report was supportive of him. The evidence clearly shows that the Church, through the actions of Pastor Jaensch, has actively worked against Pastor Eisenmenger securing another post in a school. In my view the actions of the Church, through the actions of Pastor Jaensch, has actively worked against Pastor Eisenmenger securing another post in a school. In my view the actions of the Church in not accepting the outcome of the IRP and/or the agreed process following the report of Dr Sundin were unfair and unreasonable and compounded the procedural unfairness in the process that terminated his position at SPLC.". [2005] 178 QGIG @ 210. Although those comments were made in the context of a discussion about whether procedural fairness was afforded to Pastor Eisenmenger, they show that the Commission had formed a view, based on the evidence, that the Church either acted unreasonably in failing to support Pastor Eisenmenger's return to a school or omitted to act in accordance with the agreement it had reached in conciliation. The agreement reached before Brown C was different to the usual types of outcomes from conciliation conferences relating to an application for reinstatement. It did not fall into the class of an "honest attempt of settlement" (see Coco's Trading Pty Ltd v Barbara Gay O'Reilly [2003] 174 QGIG 102) but was something much more. It was an agreement between consenting parties who were legally represented and as I said in the final decision, who must have considered the consequences of entering into such an agreement. In such circumstances, a represented party cannot expect such behaviour to go unsanctioned. Industrial relations has as a central element the making and honouring of agreements. The system is undermined when a party, fully cognisant of the consequences of an agreement nonetheless later reneges on it. Had the LCAQD honoured its agreement, a trial would have been unnecessary. In my view, the act or omission of the respondent with respect to the conciliated agreement was unreasonable and is sufficient to trigger an award of costs under s. 335(1)(b) of the Act. I have considered the competing arguments about how costs, if awarded, should be calculated. I reject the application for indemnity costs on the grounds that Pastor Eisenmenger was not wholly successful in his application, particularly in light of the finding made with respect to allegation one. However, I am not attracted to the submission that costs should be calculated in accordance with the Magistrates Court scale of costs as allowed for by Rule 66(1)(a) of the Industrial Relations (Tribunal) Rules 2000. Costs calculated according to the highest scale available would not fully recognise the complexities and peculiarities of this hearing. Scope is available to the Commission under Rule 66(1)(d) to award costs to any other basis it considers reasonable. "66(1) If the court or commission makes an order for costs under section 335 of the Act, the court or commission, in making the order, may have regard to - . . . (d) any other relevant factor.". I consider that an award of costs should reflect the nature and complexity of the issues involved in this case as well as the substantial success of the applicant at trial. Accordingly, the quantum of costs awarded will be substantial but, because of my decision not to award indemnity costs, will not be in the sum claimed. -- 2 of 3 -- 3 Counsel for both parties agreed that in the event the Commission determined to award costs, then the parties should be given an opportunity to quantify them in accordance with my decision. I propose to adopt such a course. To provide some further guidance I should add that I would not include in any costs order the following:  the fees payable to Dr Tronc and  the 50% of fees of Dr Sundin for the cancelled appointment with Dr Sundin. I would also be reluctant to award costs for advice obtained from Counsel, other than Mr Murdoch SC. I propose to allow reasonable costs for the appearance of Senior Counsel given what I have said about the particular features of the trial. The parties are directed to confer over the quantum of costs within the next 14 days. Either party is at liberty to apply in the event that agreement is unable to be reached. I reserve the discretion to award costs on a global basis, having regard to the views expressed herein, what is fair and reasonable and any later submissions of the parties. Order accordingly. G.K. FISHER, Commissioner. Hearing Details: 2006 16 and 23 March Released: 21 April 2006 Appearances: Mr J. Murdoch SC instructed by Mr M. Ryan (Ryan Kruger) for the applicant. Mr A. Horneman-Wren (Barrister) instructed by Mr J. Naughton (Allens Arthur Robinson) for the respondent. Government Printer, Queensland The State of Queensland 2006. -- 3 of 3 --