Albert Smith & Son Pty Ltd v Fellows [2005] QIRC 117 (2005) 180 QGIG 115

[Extract from Queensland Government Industrial Gazette, dated 9 September, 2005, Vol. 180, No.2, pages 115-117] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 265 application for orders Albert Smith & Son Pty Ltd AND David Fellows (No. B603 of 2005) COMMISSIONER BLADES 29 August 2005 Discontinuance of application – Rule 64 Industrial Relations (Tribunals) Rules 2000 – Objection to discontinuance – Application by respondent for order for costs s. 335(1)(a) Industrial Relations Act 1999 – Whether applicant’s application made “without reasonable cause” – Application for costs refused – Applicant allowed to discontinue. DECISION Mr R.I. Bryson, authorised to represent Albert Smith & Son Pty Ltd (the applicant), made an application to the Commission in the following form for: “Pursuant to section 265(1)(b)(i) or 265(1)(b)(ii) of the Industrial Relations Act 1999 (“the Act”) orders that - 1.1 Issues arising as between Albert Smith & Son Pty Ltd (“AS”) and David Fellows (“Fellows”) - 1.1.1 relating to the terms and conditions pursuant to which AS employed Fellows; and, 1.1.2 the manner in which AS proposes to terminate Fellows’ employment; are industrial matters within the meaning of section 7 of the Act within the jurisdiction of the Queensland Industrial Relations Commission; 1.2 AS acted lawfully and within the provisions of the Act in proposing to terminate the employment of David Fellows; 1.3 On the proper application of the employment contract between AS and Fellows dated 10 December 2003 (a copy of which is schedule 1 to this Application) Fellows is required to reimburse certain amounts to AS particulars of which are contained in schedule 2 to this Application.”. The matter first came before the Commission on 4 May 2005 when it became clear that there were issues between the parties also involving the New Zealand Employment Relations Authority where Mr Fellows (the respondent) had filed proceedings. It was suggested by the Commission that there were jurisdictional issues facing the applicant Albert Smith & Sons Pty Ltd in relation to the orders that were sought and an adjournment was granted at the request of Mr Fellows’ representative in order for further instructions to be obtained. The Commission recommended a conciliation conference he held. The matter was again before this Commission on 27 May. It emerged that a conference had not been held as Mr Fellows indicated he was not agreeable to that procedure. A conference had been organised in New Zealand for 14 June. The Commission suggested that another attempt at a conference in the Industrial Commission in Brisbane be held but ordered, because of the absence of Mr Fellows in New Zealand, that the issue of jurisdiction be determined separately and that written submissions be filed in the Commission, firstly by the applicant by 3 June with a response by the respondent by 10 June. The applicant was then given until 15 June to file a reply if any. It would appear that by arrangement between the parties, it was decided that the issue of jurisdiction would not be argued. On 28 June 2005, the applicant filed a “Request to Discontinue” the proceedings having served the respondent on 21 June. Rule 64 of the Industrial Relations (Tribunals) Rules 2000 provides: “64 Discontinuance of applications other than under Act, s 74 (1) This rule applies to an application before the court, commission or registrar to which rule 129 does not apply. (2) The applicant may ask to be allowed to discontinue the matter by filing a written request in the approved form, with the registrar. (3) When filing the request, the applicant must forward a copy of the request by any method mentioned in subdivision 3 to each of the parties to the application. -- 1 of 3 -- 2 (4) A party may object to the discontinuance by written notice to the registrar within 14 days after being notified of the request to discontinue. (5) If no party objects within the 14 days, the court, commission or registrar may allow the matter to be discontinued. (6) If a matter is allowed to be discontinued, the court, commission or registrar must note the file to that effect. (7) If a notice of objection is received within the 14 days, the court, commission or registrar may allow or disallow the request for discontinuance on the terms the court, commission or registrar considers appropriate.”. On 4 July, the respondent filed in the Registry an objection to the discontinuance application and sought orders for reasonable costs on the grounds that the initial application was made “without reasonable cause”, citing section 335(1)(a) of the Industrial Relations Act 1999 (the Act). In support of the application, the respondent, in numerous paragraphs raised disputed issues of fact or facts which could only be relevant in a full merit hearing but in paragraphs one and two said: “1. Albert Smith & Son Pty Ltd, (AS) persisted in filing proceedings in the Commission despite advice from the Registrar that it was not the appropriate forum to file AS’s Claim. 2. AS, filed proceedings in the Commission subsequent to being notified that proceedings were underway in New Zealand.”. Because it has been raised by the respondent, it is appropriate to record what occurred to cause the Registrar’s involvement. The applicant endeavoured to file a previous application on 6 April 2005 and without setting out the application in full, purported to seek a declaration under s. 275(1)(b) of the Act and Orders pursuant to section 120(3)(b) and 274(2) of the Act involving Mr Fellows. The Registrar rejected that application on 18 April 2005 on the basis that an application under s. 275(1)(b) can only be made by an organisation, a State peak council or the Minister; as the matters referred to in the application did not relate to prohibited conduct, section 120 was not relevant to the application; and as s. 274 sets out the general powers of the Commission, it was not a relevant section under which the application could be pursued. The Registrar refused the document for filing. The application now sought to be withdrawn was filed on 15 April 2005 (sic). Provided that no injustice will be caused to a respondent, an applicant should in ordinary circumstances be allowed to discontinue an application. In Covell Matthews and Partners v French Wools Ltd (1977) 1 WLR 876 Graham J said: “The principles to be culled from these cases are, in my judgment, that the court will, normally, at any rate, allow a plaintiff to discontinue if he wants to, provided no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can, without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained in the litigation and should be ready to grant him adequate protection to ensure that any advantage he has gained is preserved.”. Of course, one of the considerations is the issue of costs. Section 335 of the Act gives the Commission a power to award costs only if satisfied that “(a) the party made the application vexatiously or without reasonable cause.”. It is insufficient, for a party seeking costs, to show merely inadvertence or neglect. “Without reasonable cause” must take its colour from the preceding word “vexatiously” although “without reasonable cause” sets the lower standard of the two – see George v Allied Express Transport Pty Limited (2003) 173 QGIG 158 and Larorb Pty Ltd t/a Sunshine Office Supplies v Ball (2003) 174 QGIG 1013. In Thompson v Hodder (1990) 21 FCR 467 the Court said at 470: “In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272, Northrop J said: ‘The policy of s 197A of the Act is clear. It is designed to free parties from the risk of having to pay costs of an opposing party. At the same time the section provides a protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court.’. It is apparent from these authorities that an applicant who has the benefit of the protection of s 347 will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances.”. -- 2 of 3 -- 3 It was held by his Honour the President in MIM Holdings Limited v Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Queensland (2000) 164 QGIG 370 that s. 335(1)(a) was aimed at the case which was objectively recognisable as one which could not succeed at the time when the application was made. The application filed by the applicant has as its base, disputed questions of fact about whether there was a contract of employment with Mr Fellows entered into in Queensland or New Zealand and there are numerous other disputes of fact. The applicant maintains there was only one contract, the Queensland contract. The respondent filed an application in New Zealand and that would appear to have prompted the application to this Commission. None of the questions raised by the pleadings has been determined and it is inappropriate to force the applicant to a trial of those issues if the applicant does not wish to proceed. The Registrar did not advise the applicant that it was inappropriate to file any claim in this Commission. The Registrar rejected the previous application for the reasons indicated. The present application was in a different format invoking other sections of the Act and was accepted by the Registrar. The jurisdictional issues surrounding this application were raised by the Commission, not by the parties, as a discrete issue because of the Commission’s doubts about the relief sought and primarily because any trial of the substantive issues would have required the costly exercise of the respondent returning from New Zealand to attend the trial, whereas jurisdiction could have been determined upon written submissions. In Saddington v Oliver and Others (No 2) (1993) 49 IR 412 Gray J held that in a case involving disputed questions of fact, it is simply not possible to determine whether the proceeding was instituted vexatiously or without reasonable cause unless the matter is tried. His Honour also cited Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 at 264-265 where it was held by Wilcox J that if success depended upon the resolution of one or more arguable points of law, it was inappropriate to stigmatise the proceeding as being “without reasonable cause”. No adjudication has been made on the jurisdictional questions raised by the Commission in this case, nor has it been argued, and the respondent himself has never claimed a lack of jurisdiction, at least until the objection to the discontinuance was lodged. I do not consider it could be said to be “objectively recognisable” that the application could not succeed. In Llewellyn v Property Sales Association of Queensland, Union of Employees (2001) 167 QGIG 266, the President said that it would be invidious to comment on the prospects of success of an appeal which had been withdrawn. This is an industrial matter where the normal rule, set out in the Act, is that costs are not awarded. The phrase “without reasonable cause” suggests conduct verging on an abuse of process, vide George at p. 159. There is no circumstance which arises that can be said to fall into the category of “without reasonable cause”. There is no advantage which has been gained by the respondent in this proceeding which needs to be protected. The applicant should be allowed to discontinue. I allow the discontinuance and there will be no order as to costs. The application for costs is dismissed. B.J. BLADES, Commissioner. Hearing Details: 2005 4 and 27 May Written Submissions: 2005 18 and 25 August Appearances: Mr R. Bryson, with him Mr R. Smith, for Albert Smith & Son Pty Ltd. Mr P. Gordon, Ebbsworth & Ebbsworth Lawyers, for Mr D. Fellows. Released: 29 August 2005 Government Printer, Queensland The State of Queensland 2005. -- 3 of 3 --