Cochrane v Mayne Group Limited (No. 3) [2003] QIRC 124 (2003) 173 QGIG 876

876 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 11 July, 2003 ########################################################################################################################## QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 335 – application for costs Paul Cochrane AND Mayne Group Limited (No. 3) (No. B1779 of 2002) COMMISSIONER BLADES 1 July 2003 Unfair dismissal – Application for costs – Rumours respondent’s business for sale – Applicant requested advice of sale – Applicant seeking only reinstatement – By applications made for suppression of evidence to protect staff, applicant reasonably led to believe primary remedy still available – Respondent failed to advise of sale and impossibility of reinstatement until 4 minutes before commencement of trial – Held unreasonable act or omission in connection with the conduct of the application – Costs awarded against respondent. -- 1 of 3 -- 11 July, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 877 DECISION Paul Cochrane sought reinstatement in the employment of Mayne Group Limited, more particularly to his former position with Mayne Logistics Armaguard in a trial which occurred on 17 and 18 March 2003. At 9.56 a.m. on 17 March 2003, he was informed that the business of Armaguard had been sold to Linfox and that reinstatement was not possible. Needless to say, the applicant proceeded with the application and was successful to the extent that a sum of compensation was ordered to be paid for a dismissal adjudged to harsh, unjust or unreasonable. This application for costs is brought on the basis that the respondent acted unreasonably by omitting to inform the applicant until some 4 minutes before the scheduled commencement of the hearing that reinstatement was impracticable for the reason identified. Evidence was given at the hearing of the costs application by Mr Cochrane, Ms Honeychurch his Solicitor, Mr Murdoch SC, Counsel for the respondent, Mr Humphries Solicitor for the respondent and finally by Mr O’Gorman, applicant’s Counsel. The respondent made the following points: • Exhibits 4, 7, 8 and 9 in the substantive hearing were affidavits of witnesses deposing to the fact that each was employed by “Linfox Armaguard (Armaguard)” and that therefore the applicant’s Solicitors should have been aware of the sale or at least put upon their guard to make enquiries. • At the conciliation conference on 20 November 2002, the applicant declined to have discussions regarding a monetary settlement, seeking only reinstatement. Even after being informed of the sale on 17 March, the applicant was not interested in a monetary settlement. • As early as 22 January 2003, Mr Cochrane himself had advised his Solicitor that he had become aware that “Armaguard” was to be sold to Linfox over the next few months. There was therefore an onus resting squarely upon the applicant to ascertain who the appropriate respondent was and whether there had been a sale. Ms Honeychurch has said that when she was informed of the rumour about the sale of Armaguard, she contacted Mr Briggs the respondent’s Solicitor and sought confirmation. Mr Briggs indicated that he was unaware of any such sale taking place but would follow the matter up and advise her if a sale was occurring. She caused a facsimile to be forwarded to Mr Briggs on 22 January 2003 seeking information as to the “appropriate respondent in light of any changes in ownership of the business”. She received no reply. Mr Murdoch SC gave evidence in this application that he did not become aware of the sale of Armaguard to Linfox until the pre-trial conference in the week leading up to the hearing. That could have been the day before the trial or the day before that. At no time prior to then was he aware that there had been a sale of the business of Armaguard to Linfox. The sale occurred on 3 February 2003. An application for the suppression of the proceedings was lodged by Mayne Logistics Armaguard (Armaguard) on 29 January 2003. The application was heard on 30 January 2003 and the decision released on 3 February 2003. The decision was appealed by Mayne Logistics Armaguard with an application to appeal filed on 11 February 2003 and heard on 21 February 2003 with the decision released 24 February. The basis of the application for the suppression orders was that “the evidence to be filed by Armaguard sets out material which affects the security of cash and the safety of the staff employed at Armaguard Branches”. At no time was Ms Honeychurch advised that the business of Armaguard had been sold to Linfox. Mr Humphries confirmed in evidence that he acted on behalf of Mayne Logistics Armaguard in the suppression order application and the appeal. From 3 February 2003 there were in fact no employees of Mayne Logistics Armaguard and one would have thought that unless the suppression order was sought on behalf of Linfox or by some contractual obligation, there was no point to it. The affidavits comprising exhibits 4, 7, 8 and 9 and filed on 27 February 2003 (with three dated 27 February and one undated) contain passages such as: • I am employed by Linfox Armaguard (Armaguard). . . • I have been employed by Armaguard in that position since . . . (One says 2001, another says June 2002, a third says July 1983 and the fourth says July 2001. None reveals that there was any change of employment since 3 February 2003). I do not accept the submission that these affidavits should have been enough to place the applicant’s Solicitor upon an investigative process to ascertain whether the business of Armaguard had in fact been sold as rumoured. The passages are confusing if not conflicting. She had asked for confirmation of any sale. The fact that the appeal in the name of Mayne Logistics Armaguard was being prosecuted as late as 21 February ostensibly to protect staff employed at Armaguard Branches must have led her to believe the primary remedy was still available. She believed the witnesses were still employed by the same entity, Armaguard. If she had made further enquiries, without the co-operation of the respondent, she may still not have ascertained until the hearing, that there were no employee positions left in Mayne Logistics Armaguard to which reinstatement or re-employment could be ordered. The prosecution of the appeal on 21 February was a representation, or reasonably able to be taken as one, that there had been no sale (or full sale) or at least that there were some employees of Mayne Logistics Armaguard left to protect. The applicant was not interested in a monetary settlement at the conciliation conference on 20 November 2002, seeking only reinstatement. No other discussions regarding a monetary settlement were held until it was revealed on 17 March that the sale had occurred. At that time, respondent’s Counsel suggested an adjournment or discussions regarding a monetary settlement. Because the applicant had only ever sought reinstatement or re-employment, applicant’s Counsel may not have conveyed the suggestion to the applicant but in any event, it was decided to proceed with the hearing because the costs of 17 March had already been incurred whether there was an adjournment or not. Up until this point in time, the applicant was entitled to pursue only reinstatement. Reinstatement is the primary remedy under the Industrial Relations Act 1999 as emphasised by the words of s. 79(1) “If, and only if, the commission considers reinstatement or re-employment would be impracticable. . .” and as re-emphasised by the Second Reading Speech of the Honourable the Minister, Hansard 25 May 1999, at p. 1831. However, as subsequently found by the Commission, reinstatement to a position that was non-existent or re-employment in a company which had no employees was no longer possible and negotiations for a monetary settlement should have been entered into when the applicant was advised of the sale on 17 March. The fact that the applicant had a closed mind at the conciliation conference and would not consider anything other than reinstatement should be reflected in a denial of some of the costs to which he might otherwise be entitled. Section 335(1)(b) of the Act relevantly provides that the Commission may order a party to an application for reinstatement to pay costs incurred by another party only if satisfied that the party caused costs to be incurred by the other party because of an unreasonable act or omission connected with the conduct of the application. The respondent in submitting that the conduct did not fall within the provisions of the Act, has referred to Reddick v Ocean Spirit Cruises Pty Ltd (1999) 161 QGIG 163 where the then Chief Commissioner Hall said: -- 2 of 3 -- 878 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 11 July, 2003 “In my view, the adjective ‘unreasonable’ at s. 225(1)(b) takes its colour from s. 225(1)(a). It is insufficient to show inadvertence or even neglect. What must be shown is an abuse of process attracting opprobrium of the same magnitude as is attracted by launching an application frivolously or vexatiously or without reasonable cause.”. A Full Bench of the Commission in Doyles Construction Lawyers v Serratore (No 2) (2002) 170 QGIG 103 adopted the words of McKenzie P in Goldman v Data General Australia Pty Ltd 144 QGIG 379 as descriptive of the correct approach to be adopted in assessing whether there had been an unreasonable act or omission in connection with the conduct of an application. McKenzie P said: “Nonetheless, it does make the point that some reinstatement cases by reason of the procedural steps involved and their nature, length and complexity have rather got away from the ideal of inexpensive dispute resolution. There may be some cases where at the end of the day it can be seen that a party has acted unfairly, unreasonably or improperly in or in the course of pursuing or resisting such relief and that those actions were so unjustifiable that the proceedings have worked as an act of oppression to the other side. It goes almost without saying that cases where such a finding could properly be made will be rare and would have to fit the description frivolous, vexatious or otherwise abnormal. The mere fact that a party fails to succeed would be far removed from this kind of case and will be far from sufficient to found an argument for costs. No one with a reasonably arguable case need be deterred from proceeding by fear of the consequences of costs unless some abnormal unfair aspect enters into the conduct of the proceedings.”. There is no allegation that respondent’s actions were frivolous or vexatious. However, I think they might better be described as unjust. Failing to disclose that the sale had proceeded to finality in the face of a specific request and with knowledge that the applicant was seeking reinstatement in my view was an abnormal and unfair act. Admittedly there is no onus upon a respondent to run an applicant’s case or give advice. Moreover, there was no onus upon the respondent to provide information as to the name of the appropriate respondent. In fact, at the hearing of the matter there was great confusion as to the identity of the appropriate respondent. Even the witnesses could not give that information with resort having finally to be made by the applicant to the all encompassing Mayne Group Limited. But having failed to answer a specific question on the subject and by actions in prosecuting an appeal in an apparent attempt to protect the welfare of employees, which misled the applicant, the respondent was guilty of acts which caused costs to be incurred by the applicant, sufficiently abnormal as to justify an award of costs. Not only was applicant misled, but respondent’s Counsel was even unaware of any sale. When the applicant became aware of the sale (and at that point should have accepted that reinstatement or re-employment was not possible), the applicant could not avert the costs already expended, including the costs of that first day of the hearing. I reject the respondent’s written submission that the costs of the applicant pursuing reinstatement were incurred by his refusal to either adjourn the 17 March proceedings or enter into settlement discussions. The majority of the costs were already spent. The respondent also claimed that it could not be imputed with knowledge that the applicant only sought reinstatement. That claim is answered by what occurred at the conciliation conference where only reinstatement was sought and by the fact that no attempt had been made to offer a monetary settlement by either party. It was submitted that the “sale” was public knowledge but that does not excuse the failure to respond to the request in circumstances where the respondent, at a late stage, still appeared to be protecting the interests of employees. Finally, it was submitted that as at 22 January, the applicant had knowledge of an impending sale. That “knowledge” did not extend to when or to the extent of any sale and I doubt that the “knowledge” can be classified any higher than rumour. In all of the circumstances, I am satisfied that the respondent, by failing to respond to the applicant’s request to be advised in the event of the sale proceeding, combined with actions tending to the belief that the respondent Mayne Logistics Armaguard still had employees to protect, in the knowledge that the applicant was seeking only reinstatement, was an unreasonable act or omission in connection with the conduct of the application which caused the applicant to incur costs. Those costs could have been avoided had the respondent advised of the sale at an appropriate time on or after 3 February 2003 when the consequences of proceeding would have had to have been squarely faced. Section 335(1) of the Act does not require that a costs order be made, only that it “may” be made but in these circumstances, where the applicant would appear to have recovered much less in compensation than what his actual costs were, it is appropriate that an order for costs be made. Due to his failure to attempt negotiating a monetary settlement at the conciliation stage, I would deny the applicant’s costs for Item 1 – Instructions to sue and Item 11 – Disclosure. I am guided by the Scales of the Magistrates Court Scale of costs in the Uniform Civil Procedure Rules. The applicant recovered three month’s pay. At this hearing, I endeavoured to quantify that amount, ultimately without much success as the best that could be done was to provide me with an indication that the applicant was paid a net amount of $8,563.00 in compliance with the Order. However, it is the gross amount which the applicant recovered and on which I would base my award of costs and I infer that the gross payment in this case exceeded $10,000. The appropriate Scale is therefore Scale F. I award the following costs: $ Item 5(a) Preparing for trial - Counsel engaged 2,525.00 Item 6 Counsel’s fees (f) first day 1,142.00 Item 6 (j) in attending application for suppression to neither support nor oppose 185.00 Item 10 Application for costs 374.00 Total 4,226.00 I have made no allowance for the attendance of the Solicitor at the hearing. I order the respondent to pay the applicant’s costs which I fix at $4,226.00 within 21 days of the date of release of this decision. B.J. BLADES, Commissioner. Hearing Details: 2003 25 June Released: 1 July 2003 Appearances: Mr D. O’Gorman, Counsel, instructed by Lees Marshall Warnick, for the Applicant. Mr J. Murdoch, Senior Counsel, instructed by Blake Dawson Waldron, for Mayne Group Limited. ########################################################################################################################### -- 3 of 3 --