Barsha v Motor Finance Wizard (Sales) Pty Ltd [2003] ICQ 36 (2003) 174 QGIG 2

2 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 5 September, 2003 ########################################################################################################################### INDUSTRIAL COURT OF QUEENSLAND Industrial Relations Act 1999 – s. 341(1) – appeal against decision of industrial commission Chris Barsha AND Motor Finance Wizard (Sales) Pty Ltd (No. C46 of 2003) PRESIDENT HALL 22 August 2003 DECISION By a decision released on 4 October 2002 the Queensland Industrial Relations Commission awarded the appellant $8,400 by way of compensation for unfair dismissal. The issue of costs was reserved. With a view to expedition and the saving of costs, the issues were dealt with by written submission. By a decision of 6 June 2003, now reported 173 QGIG 609, the Commission dismissed the appellant’s application for costs. This is an appeal against that decision. It is common ground that s. 335 of the Industrial Relations Act 1999 is the source of the Commission’s power to award costs. Section 335 is an unusual provision. It does not provide for the Commission to award costs where it finds that an unsuccessful party made an application vexatiously or without reasonable cause or, in the case of an application for reinstatement, that a party caused costs to be incurred by the other party because of an unreasonable act or omission connected with the conduct of the application. Rather, it provides that where the necessary finding of vexation or unreasonableness is made, the Commission has a discretion about the matter of costs. Section 335 is in the following terms: “335 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. (2)In making an order, the court or commission may order a party to pay another party an amount reasonably payable to a person, who is not a lawyer, for representing the other party.”. I quite accept that a finding that an application is vexatious or without reasonable cause or, alternatively, that costs in an application for reinstatement had been incurred in consequence of an unreasonable act or omission may, and usually will, be relevant to the exercise of the discretion. However, it must be stressed that the discretion is not a discretion to refrain from the award of costs notwithstanding that the finding of vexation, unreasonableness or (in the case of a reinstatement application) unreasonable act or omission is made. The section is positively expressed, and it is the effect of s. 32CA of the Acts Interpretation Act 1954 that the discretion, once it arises, is full and unfettered. -- 1 of 3 -- 5 September, 2003 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 3 It is plain that the Commission correctly applied the section. The Commission went first to the question whether the power arose and, having found that the power did arise, went to the matter of discretion. Essentially, the Commission found that the discretion to award costs had arisen because the respondent had mounted a case which was untenable on its own documents and which failed on the very grounds drawn to the respondent’s attention at the earlier conciliation conference. Since the conclusion is not challenged on the appeal, it is unnecessary to say anything more about it other than that the Commission’s reasons are fully disclosed at pp. 615 to 616 of the decision. The conclusion which is complained of, viz. the decision to refrain from the exercise of the discretion to award costs, was pithily expressed. The Commission refrained from the award of costs because the Commissioner who had conducted the s. 75(3) conference had issued a certificate which, amongst other things, indicated “that the respondent was prepared to negotiate a settlement of the application” (at 616). It is not contended by the appellant that the Commission erred in taking into account the observations of the Commissioner conducting the s. 75(3) conference about the respondent’s willingness to negotiate. Neither is it suggested that the Commission erred in the way in which it weighed the willingness to negotiate against the unreasonableness involved in running an untenable case against advice. Indeed, granted that the discretion is the discretion of the Commission and not of the Court and of the significant restrictions imposed upon appellate tribunals in interfering with the exercise of discretion by a tribunal of first instance, see e.g. House v. The King (1936) 55 CLR 499 at 504 to 505 per Dixon, Evatt and McTiernan JJ, any such attack would be unsustainable. The attack on the Commission’s decision is based upon the proposition that the Commission erred in law in failing to admit evidence that the respondent had refused to accept an offer to settle which was both reasonable and of a money amount less than the compensation ultimately awarded. The Commission ruled the evidence to be inadmissible because it related to an offer made and rejected at the conciliation conference. The Commission held, rightly in my view, that offers and counter offers made with a view to settlement at a conciliation conference conducted under s. 75 are presumed to be on a “without prejudice” basis. The Commission also held, and again I agree, that the presumption was one of fact. The Commission then held that to rebut the presumption that the offers and counter offers were made on a “without prejudice” basis “The offeror will at very least be required to demonstrate that the offer was clearly made on the basis that the right to refer to it on a costs application was reserved.” (at 614) With that proposition I am unable to agree. I do however accept that on the evidence the presumption was not rebutted. It is in the nature of privilege that it may be waived. Waiver occurs when the party entitled to a privilege performs an act which is inconsistent with the confidence preserved by it, compare Cross on Evidence at [25010]. The privilege attaching to “without prejudice” negotiations being a joint privilege, Re Turn Enterprises Pty Ltd [1975] Qd.R 266 at 267 per Dunn J, waiver by both parties must be shown. And in this case, it was. In the witness statement of Roderick Wickham James, a director of the respondent, tendered in the unfair dismissal proceedings, it is asserted at para 20 that: “Barsha was paid weekly under his Contract and on finishing up was paid one weeks salary in lieu. Barsha has since been offered three weeks salary in lieu (less the week already paid) but has rejected this offer.”. The statement of the appellant tendered in reply to the statements of the respondent’s witnesses includes, with reference to the statement of Mr James, at para 17: “With respect to paragraph 20, I say that I was offered two weeks salary at the Conciliation Conference on the 4th April 2002. I sought six weeks salary at that conference, which was rejected by the Respondent.”. It is not a matter of saying that because the evidence was admitted regard may be had to it. Evidence which is admissible for one purpose is not necessarily admissible for another. The point is that each of the respondent and the appellant were acting entirely inconsistently with maintenance of the privilege. The Commission fell into error because the Commission was under a misapprehension as to the evidence of Mr James. At p. 614 the Commission summarised the relevant passages in the witness statements as follows: “The applicant also points in this case to the fact that the respondent has waived any privilege in relation to ‘without prejudice’ offers of settlement made at the conciliation conference, by repeating its offer of settlement in the witness statement of Rodney Wickham James, made on 20 May 2002 and filed prior to the hearing of the substantive application. The witness statement (Exhibit R1) in the hearing of the substantive application, contains the following at point 20: ‘Barsha was paid weekly under his contract and on finishing up was paid one weeks salary in lieu (less the week already paid) but has rejected this offer.’ In the applicant’s witness statement in reply, contains the following at point 17: ‘With respect to paragraph 20 (of the statement of Mr James) I say that I was offered two weeks salary at the conciliation conference on 4 April 2002. I sought six weeks salary at that conference which was rejected by the respondent.’ ”. The correct transcription of Mr James’ evidence is, of course, that set forth above. I agree that if, in truth, Mr James had done no more than indicate that there had been an offer, a conclusion that he had acted inconsistently with the respondent’s claim of “without prejudice” privilege would not be open. One would have had a case in which the appellant was trying to rely upon his own waiver to tender otherwise inadmissible evidence. In such a case, on its material facts, the decision upon which the Commission relied, viz. McKenzie v. Meran Rise Pty Ltd trading as Nu Force Security Services December 375/00M Print s. 4692 would have been directly on point. However, Mr James had gone well beyond that. Mr Boccabella of counsel for the appellant presses that I should set aside the decision of the Commission and exercise the discretion at s. 335. Doubtless, s. 341(3)(b) vests the power to take that course. However, the discretion is fundamentally a discretion of the Commission. The Commissioner who heard the unfair dismissal claim has the full flavour of the proceedings between the appellant and the respondent and is much better placed to exercise the discretion. Further, Mr Byrne of counsel for the respondent intimates that if evidence about the offers and counter offers is to be admitted, there may (and it is no stronger than that) be an argument about leave to cross-examine and lead further evidence and put further argument about the issues upon which costs should be allowed. The Commission is acquainted with the earlier arrangements about written submissions. The Court is not. On any view of it, the Commissioner is in a much better position to put a money value upon any costs. In my view this is a clear case in which the matter should be remitted to the Commission. I set aside the decision of the Commission about costs in matter number B492 of 2002. I direct that the matter be remitted to the Commission as previously constituted to be heard and determined according to law. Mr Boccabella seeks costs of the appeal. Without going to the textual difficulties of s. 335, I am satisfied that any discretion to award costs which might exist should not be exercised in a case of misapprehension of fact by the Commission. -- 2 of 3 -- 4 QUEENSLAND GOVERNMENT INDUSTRIAL GAZETTE 5 September, 2003 I note the observations of the strong Full Bench in McKenzie v. Meran Rise Pty Ltd trading as Nu Force Security Services, ibid, about public policy. The observations are a little contentious. To begin with, there is respectable authority for the view that the extension of the rule that “without prejudice” negotiations are inadmissible to proceedings about costs is not based on public policy but an implied agreement, see Cutts v. Head [1984] Ch 290 at 306 per Oliver LJ and Muller v. Linsley and Mortimer [1996] PNLR 74 at 77 per Hoffmann LJ. Further, some would agree that it is contrary to public policy to protect from orders about costs those who obstinately or imprudently decline to settle. And if the opinion of the Commissioner conducting the s. 75 conference is to be admissible, why not the facts? Here, it is sufficient to say that since counsel did not argue the matter of public policy, I express no view about it. Dated 22 August 2003. D.R. HALL, President. Released: 22 August 2003 Appearances: Mr L. Boccabella, instructed by A.J. Torbey and Associates, Solicitors, for the appellant. Mr Michael James Byrne, instructed by Llewellyns, Solicitors, for the respondent. -- 3 of 3 --