Dickinson v Carter Holt Harvey Wood Products Australia Pty Ltd t/a CHH Pinepanels; Young v Carter Holt Harvey Wood Products Australia Pty Ltd t/a CHH Pinepanels [2004] QIRC 95 (2004) 176 QGIG 116

116 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 4 June 2004 QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 335 – costs John Dickinson AND Carter Holt Harvey Wood Products Australia Pty Ltd t/a CHH Pinepanels (No. B1484 of 2003) Brett Young AND Carter Holt Harvey Wood Products Australia Pty Ltd t/a CHH Pinepanels (No. B1486 of 2003) DEPUTY PRESIDENT BLOOMFIELD 24 May 2004 Applications for reinstatement – Application by respondent for costs – Role of The Australian Workers’ Union of Employees, Queensland – Union acting as agent – True applicants found to be Mr Dickinson and Mr Young – Applications for reinstatement not made vexatiously and/or without reasonable cause – Applicants caused costs to be incurred because of an unreasonable act or omission – Costs of $12,000 awarded – Proportioned 35:65 between applicants – Payment to be made by 31 December 2004. DECISION In a decision now published at (2004) 175 QGIG 1035 I determined that the dismissals of Mr John Dickinson and Mr Brett Young by Carter Holt Harvey Wood Products Australia Pty Ltd trading as CHH Pinepanels were not harsh, unjust or unreasonable. In doing so I stated (at p. 1046): “The applicants left site without any concern whatsoever for the welfare of their fellow workers and without considering their responsibilities to their employer. They did not tell anyone in authority of their intentions to leave. They did not tell their fellow workmates how long they intended to be away (Mr Dalton, for one, thought that Mr Dickinson would only be gone for 20 minutes). They gave no thought as to how the other employees (such as Mr Missingham) might access their smoko breaks because they were off on their own escapade. Further, each of the applicants simply compounded the problem when they were confronted with the allegations concerning their attendance at the AFL Club. Rather than owning up, being totally truthful about their actions, and copping the consequences, they put forward a story which did not stand up to scrutiny. To compound the matter, they continued to stick with the original story when they were given many, many opportunities to change it and properly account for the events. In my view, the applicants have brought the final consequences, i.e. their termination, upon themselves. Had they owned up to the events, and not continued to lie about it the whole way through, the respondent might have taken a different approach to the whole matter. So might this Commission. The ultimate sanction of termination, given one act of indiscretion, over a 10 year period of employment, might normally be regarded as harsh. However, given the applicants total refusal to acknowledge their behaviour, I conclude, for all of the foregoing reasons, that the decision of Carter Holt Harvey to terminate the applicants with effect from 26 August 2003 was not harsh, unjust or unreasonable. Accordingly, I dismiss both applications.”. The respondent has now sought recovery of its costs of defence of the matters on an indemnity basis, suggesting the “applicants” made their applications vexatiously and/or without reasonable cause (s. 335(1)(a)), and/or caused costs, including witness expenses, to be incurred by the respondent because of the unreasonable way in which they approached the conduct of the application (s. 335(1)(b)). The role of The Australian Workers’ Union of Employees, Queensland (AWU) In its principle submission the respondent argued that the “applicants” should be held jointly and severally liable for any order for costs made in its favour. For purposes of clarification the respondent indicated it sought an order for costs jointly and severally against each of the AWU, Brett Young and/or John Dickinson as the relevant “parties” to the application/s. The respondent submitted that the AWU was a party to the applications was clear from the applications themselves which named the AWU as the “employee organisation making application” and which was signed by the Acting Secretary of the AWU. Further, the Commission’s directions orders named the AWU as “applicant” in each of the respective matters B1484 of 2003 and B1486 of 2003. However, Counsel for the respondent also acknowledged that the statement of facts accompanying each application stated that the AWU had been appointed as “agent” for the respective men and that the Commission had determined in another proceeding (L v Thuringowa City Council (1993) 144 QGIG 224) that the AWU was not the true applicant with the actual applicant being, in that case, Mr L. Counsel for the applicants, whilst generally opposing the making of any order for costs, particularly opposed the making of any order against the AWU. In doing so, he submitted that on a proper interpretation of each of the applications in the matter, and the operation of the Act, the true applicants in the proceedings were Mr Dickinson and Mr Young. At no stage did the AWU seek to become a party in its own right, nor was there any determination by the Commission “as opposed to an inelegant expression used by the Registrar in a directions order” that the AWU was a party to the proceedings. Further, none of the type of conduct mentioned in s. 335(1)(a) or (b) had been alleged against the AWU. It was submitted “there simply is no evidence before the Commission to establish that the AWU, as the agent and advocate for two of its members, was inculpated in any of the otherwise disingenuous actions on the part of its members”. After considering the matter I propose to follow the decision of Commissioner Nutter in L v Thuringowa City Council (supra) and determine that the “true” applicants in these proceedings are Mr John Dickinson and Mr Brett Young. It seems to me that the AWU has merely acted as their agent in facilitating the preparation and lodgement of the respective applications and that the AWU was not the actual applicant. Accordingly, I now proceed to consider whether the necessary elements at s. 335(1)(a) or (b) of the Industrial Relations Act 1999 (the Act) have been activated by the actions and/or behaviour of either, or both, of Mr Dickinson and Mr Young to warrant consideration of whether I should issue any order for costs. Did the applicants make the applications vexatiously or without reasonable cause? In respect of the first element of s. 335(1)(a), Counsel for the respondent argued that both applications were, from their inception, predicated on a series of fabrications by the applicants as to the circumstances surrounding their respective dismissals. It was submitted that, in the circumstances, the applicants’ conduct in pursuing the applications was vexatious. In the alternative, it was submitted that the applications were made without reasonable cause because on the true (and now accepted) version of events the applications were ones which were always doomed to fail (see the statement of President Hall in MIM Holdings Limited v AMEPKIU [2000] 164 QGIG 370). -- 1 of 3 -- 4 June 2004 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 117 In reply, Counsel for the applicants submitted the applications were not doomed to failure at the time they were made and, accordingly, there was no ground upon which the Commission could award costs pursuant to s. 335(1)(a) of the Act. In this respect, he said that even on the facts determined by the Commission (above) the Commission was still required to consider whether, in all of the circumstances, each of the terminations was harsh, unjust or unreasonable. Counsel said the fact that the Commission had decided that the terminations were not harsh, unjust or unreasonable did not mean that the applicants’ cases were doomed from the time they began. Indeed, in reaching its ultimate decision the Commission itself weighed up a number of factors before reaching its ultimate decision. This necessarily meant that the applicants had an arguable case at the time the applications were lodged. After considering the competing submissions I have decided to accept the submission of Counsel for the applicants. Did the applicants cause costs to be incurred because of their unreasonable acts and/or omissions connected with the conduct of the case? Counsel for the respondent said the categories of unreasonable acts or omissions which might attract the exercise of this Commission’s discretion to award costs are relatively well established and include: • dishonest argument (Vernon Reddick v Ocean Spirit Cruises (1999) 169 QGIG 163); • untenable position taken by a party (L v Thuringowa City Council (1993) 144 QGIG 224); • lies and evasiveness of the applicant unreasonably extending hearing of an application (Balboni v Mijan Pty Ltd (1996) 159 QGIG 168; Trevanion v Tricare Limited (1998) 157 QGIG 97); and • facts which a reasonable employee would acknowledge as being improper conduct by the employee and justifying action by the employer (Ryan v Washington Motors Pty Ltd (1997) 155 QGIG 431). Counsel for the respondent further said that if the applicants had admitted to their conduct at the outset, rather than lying about it in their applications, in their witness statements and again at the hearing, there would have been no need to have 3 days of hearing in Gympie. Rather, the hearing could probably have taken place in less than a single day because there would have been little or no dispute as to the facts giving rise to the terminations. If such a scenario had occurred argument would largely have turned on legal issues relating to whether or not the applicants’ conduct warranted dismissal in all of the circumstances. However, Counsel argued, because the applicants were untruthful about their conduct the respondent was put in the position of having to prove that the applicants were guilty of the misconduct of which they stood accused. As a result, the respondent incurred substantial additional costs: • because Counsel for the respondent was required to spend a substantial amount of time cross-examining both applicants because of their untruthful accounts and evasive answers; • because it was required to lead evidence from 2 management representatives (one of whom had to come from Sydney) in response to the applicants’ unreasonable assertion they had not been adequately apprised of the allegations against them and had not been given adequate opportunity to respond; • because Mr Young had given an untruthful account of his earnings after his dismissal which necessitated external investigation and a considerable period of time in unnecessary cross-examination; • because of Mr Young’s interference in the affidavit and evidence given by Mr Satherley the respondent was forced to put in additional evidence in reply through its solicitor, Mr Davis; • because the respondent was required to spend considerable time cross-examining 2 witnesses called by the applicants – evidence which the Commission found to be untruthful and given at the behest of Mr Young; and • because the respondent was forced to call a number of employee and management witnesses to prove matters which should have been admitted to by the applicants from the outset. The respondent also submitted that its original intention had been to use Mr Davis in its defence of the matter. However, because of issues surrounding the evidence given by Mr Satherley it was forced to call this solicitor as a witness. This necessitated the incurring of additional costs because it became necessary to brief Counsel because Mr Davis could not appear both as a witness and as the respondent’s representative. Given these circumstances, it was argued, costs should be awarded on an indemnity basis in the sum of $60,593.33 being the amount of the respondent’s professional costs and outlays on a solicitor and client basis. Alternatively, it was submitted that the sum of $40,396 should be awarded, being two-thirds of the above amount. This two-thirds differential was said to represent the additional costs involved in conducting a trial over 3 days when the matter could have been finished in a single day. The respondent submitted that the applicants’ conduct during the trial was sufficient to found an award of indemnity costs (see Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 at 257 and Re Talk Finance and Insurance Services Pty Ltd [1994] 1 Qd R 558 per Moynihan J). Finally, the respondent submitted that if the Commission was not of a mind to award indemnity costs, costs should be determined at a scale not less than Scale G of the Magistrates Court Scale of Costs and Fees. Counsel for the applicants submitted that the actions of the applicants, in the totality of the circumstances of this case, would not be viewed as being a sufficiently unreasonable act or omission so as to attract the power to make an order for costs. It was submitted that the applicants were “caught and embarrassed” in relation to the circumstances of this matter and “became enmeshed in their early statements to the point where there appeared to be great difficulty in removing themselves from the web which they had, admittedly, created for themselves”. Alternatively, it was submitted, if the Commission was of the view that the conduct of the applicants was unreasonable within the meaning of s. 335(1)(b) of the Act the Commission still retained a discretion as to whether an order for costs should be made in any event. In that respect, it was submitted that the circumstances of this matter were such that no order for costs should be made. Counsel submitted there was an enormous disparity in resources between the applicants and the respondent. Each of the applicants had lost their employment and had suffered substantial financial loss as a consequence. Their mistakes and misdeeds had been the subject of press reports in their home town. They had been subjected to humiliation and ridicule. Further, affidavits submitted by the applicants disclosed that they were each in a parlous financial situation. As such, it was suggested, “the effects of a costs order against the applicants will be catastrophic”. Conclusion After considering the competing submissions of Counsel for the respondent and Counsel for the applicants (the major points only of which are spelt out above) I have decided this is an appropriate case where the interest of justice dictate that costs should be awarded pursuant to the provisions of s. 335(1)(b) of the Act. -- 2 of 3 -- 118 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 4 June 2004 Firstly, the respondent was required to brief Counsel in relation to the proceedings because of Mr Young’s involvement in the preparation of a false witness statement by Mr Satherley which made it necessary for Mr Davis to be called as a witness, thereby meaning that he could no longer represent the respondent in the proceedings. Secondly, each of Mr Young (in particular) and Mr Dickinson gave untruthful evidence and did so in a way which necessitated extensive cross- examination. Mr Young also gave conflicting evidence which necessitated further cross-examination to establish what his real position was. Thirdly, Mr Satherley and Mr Keldoulis each gave false evidence at the instigation of Mr Young. This resulted in the unnecessary evidence of Mr Davis and unnecessary time spent on cross-examination of Mr Satherley and Mr Keldoulis. Fourthly, the respondent was required to bring Ms Stanford, the respondent’s Human Resources Manager, to Gympie from Sydney in order to counter the claims of the applicants that they had not been apprised of the allegations against them nor given the opportunity to respond. This evidence was clearly false and not supported by the documentary evidence which the applicants had in their possession prior to preparation of their witness statements. Fifthly, the respondent was required to lead considerable additional evidence from management and employee representatives about the events of the night in question and the subsequent investigation process. The respondent incurred costs in putting this evidence together, through its solicitors, as well as the additional costs involved in a lengthier trial than should have been necessary. In my considered view the applicants’ behaviour (particularly that of Mr Young) caused the trial to be extended from one day to 3 days, caused the respondent to have to be represented by Counsel rather than a solicitor as it had intended, and caused the respondent to incur considerable additional cost associated with the production, and leading, of evidence from employees on the shift on the night in question as well as from management representatives – including one from Sydney – who were involved in the later investigation of the applicants’ absence from site on the night in question. All of these costs were incurred because of the unreasonable acts of the applicants (especially Mr Young) connected with their conduct of the application. After considering the amounts expended by the respondent, and noting that Scale G of the Magistrates Scale of Costs and Fees is but a guide, I have decided to award costs in the amount of $12,000 to the respondent, proportioned in the amount of 35:65 to Mr Dickinson ($4,200) and Mr Young ($7,800) respectively. I have determined to apportion the split in the amount of costs I have awarded in the proportion of 35:65 because of my assessment of the contribution by the respective applicants to the additional costs incurred by the respondent because of their unreasonable acts. Mr Young was a particularly evasive and untruthful witness and the respondent’s Counsel was required to expend considerable time and effort in cross-examination. Further, Mr Young also drafted the untruthful witness statement of Mr Satherley which necessitated Mr Davis’ appearance and unnecessary cross-examination of Mr Satherley by Counsel for the respondent. In addition, Counsel was required to deal with the untruthful evidence of Mr Keldoulis who appeared at the behest of Mr Young. Mr Dickinson did not spend as much time in the witness box as Mr Young, and was not involved in the giving of false evidence by Mr Satherley and Mr Keldoulis, but nonetheless contributed to the extra length of the trial by joining with Mr Young in lying about the events of the night in question and, also, insisting that he had not been apprised of the charges against him nor given the opportunity to respond. In determining the total amount of $12,000, rather than a higher total, I have taken into consideration the submissions of Counsel for the applicants about their current financial predicament. I have also taken into account that each of the applicants has recently lost his employment and is attempting to re- build his life. However, that does not outweigh the fact that their respective behaviour has cost the respondent, in my estimation, some $35,000 to $40,000 in additional costs above and beyond that which they would have incurred had each of the applicants told the truth and thrown themselves on the mercy of the Commission. In that respect, the amount of costs awarded against them is but a fraction of the costs their unreasonable behaviour caused the respondent to incur. Allowing for recovery of part of its costs, through this order, and a taxation deduction for the balance, the respondent will still finish up paying more costs than have been awarded against the applicants in circumstances where it should never have been forced to incur those costs. However, given the fact that the applicants are each starting out in new careers and that there is some question about their respective abilities to make restitution immediately, I propose to allow them until 31 December 2004 to make the payments determined above. As such, it is the Commission’s order that John Dickinson make payment of $4,200 to the respondent by 31 December 2004 and that Brett Young make payment of $7,800 to the respondent also by 31 December 2004. The Commission determines and orders accordingly. A.L. BLOOMFIELD, Deputy President. Hearing Details: 2004 20 April Appearances: Mr A. Herbert (Counsel), directly instructed by Ms Y. D’Ath, of The Australian Workers’ Union of Employees, Queensland, for the Applicants. Ms S. Moody (Counsel), for the Respondent. -- 3 of 3 --