1

[ExtractfromQueenslandGovernmentIndustrialGazette,

dated10February,2006,Vol.181,No.6,pages213-216]

QUEENSLANDINDUSTRIALRELATIONSCOMMISSION

IndustrialRelationsAct1999 - s.335 - applicationforcosts

HeadlineDistributionPtyLtdANDMurrayJamesQuinn(B/2005/1243)

DEPUTYPRESIDENTBLOOMFIELD / 31January2006

Applicationforcosts - Whetheroriginatingapplicationcommencedvexatiouslyorwithoutreasonablecause - Caselaw - Notsatisfiedoriginatingapplicationcommencedvexatiouslyorwithoutreasonablecause - Applicationforcostsrejected.

DECISION

Background

On14December2005HeadlineDistributionPtyLtd(Headline)appliedtotheCommissionforanOrder,pursuanttos.335(1)oftheIndustrialRelationsAct1999(theAct),awardingHeadline:

itscostsofandincidentaltotheapplicationmadebyMurrayJamesQuinn(MrQuinn)beingMatterNo.B/2005/1106,madepursuanttos.276oftheAct(theoriginatingapplication),intheamountof$16,538.92,assessedonanindemnitybasis;and

itscostsofandincidentaltotheapplicationforcosts.

WhenthemattercameonforhearingHeadlinewasrepresentedbyMrL.Fox,aSolicitor,andMrQuinnwasrepresentedbyMrJ.Dwyer,ofCounsel.

MrFoxpresentedadetailedwrittensubmission,withsupportingdecisions,inwhichheargued,interalia:

theoriginatingapplicationprovidednoreasonablebasisforMrQuinn'sallegationsthat:

(i)thecontractbetweenMrQuinnandHeadlinewasunfairwhenitwasmade;

(ii)thecontractbecameunfairafteritwasmade;

(iii)MrQuinn'sbargainingpowerwassignificantlyinferiortothatofHeadline's;and

(iv)HeadlineuseditsrelationshipwithafinancecorporationtounfairlygainanadvantageoverMrQuinn;

theoriginatingapplicationfailedtodiscloseanyfactswhichcouldreasonablybereliedupontosupportMrQuinn'sallegationssetoutat(i)to(iv)above.

Theoriginatingapplication

InhisoriginatingapplicationMrQuinnsaidthatheacceptedanofferofemploymentfromHeadlineonorabout18February2005,gaveonemonth'snoticetohisthenemployerandrelocatedhisfamilyfromSydneytoBrisbanetotakeupapositionofferedbyHeadline,commencingon4April2005.

Withoutgoingintodetail,MrQuinnsaidthathisletterofofferdidnotspecifyanyparticulardetailsabouthowhiscarallowancewastobepaid. AfterrecountingthedetailsofallegeddiscussionsbetweenhimselfandvariousofficersofHeadline,MrQuinnclaimedhewasrequiredtoenterintoanovatedleaseforaBMWmotorvehicle. HealsoclaimedthatduringthecourseofhisallegeddiscussionswithvariousmanagersofHeadlineheenquiredaboutwhatwouldhappenifhewas "letgo" andwhetherHeadlinewouldtakeoverresponsibilityforthenovatedlease. Hesaidthatthepersonhewasspeakingtoledhimtoconclude,bywordsused,thatsucheventwasunlikely. (ItisnotedthatthesecontentionsaredisputedbyHeadline.)

Ultimately,MrQuinn'semploymentwasterminatedwithinhisprobationaryperiod,forallegedpoorperformance,on16June2005.

MrQuinnallegeshewasthusleftwithasignificantfinancialcommitmentinrelationtothenovatedleaseontheBMW. HisapplicationsoughtOrderspursuanttos.276oftheActtotheeffect,interalia,thatthecontractbedeclaredanunfaircontractandthatthecontractbeamendedtoprovidethatuponitsterminationHeadlineshalltakepossessionofthevehicleandwillbeliableforallfurtherpaymentsunderthenovatedlease.

Natureofthepresentapplication

Theoriginatingapplication,filedon1August2005,waswithdrawnpursuanttoRule64oftheIndustrialRelations(Tribunals)Rules2000(theRules)on30November2005incircumstanceswherethematterwassetforfinalhearingon5and6December2005,inclusive. HeadlinearguesthatatallrepresentationsfromMrQuinn'ssolicitorspriorto30November2005weretotheeffectthatMrQuinnintendedtopursuethemattertohearing.

MrFoxarguedthatHeadlinebelievedMrQuinnmadetheoriginatingapplicationwithoutreasonablecauseandthatMrQuinn'sbehaviourcausedHeadlinetothrowawayasignificantamountincostsandoutlays.

Withoutreferringtothewholeofhissubmissions(theyarerecordedinExhibit1andonthetranscript),itissufficienttorecordthemajorpointsarguedbyMrFoxonbehalfofHeadline.

Firstly,itwasarguedthattheclaimmadeintheoriginatingapplicationtotheeffectthattheemploymentcontractwasharsh,unconscionableorunfairand/oragainstthepublicinterestbecause:

itrequiredMrQuinntomakeasubstantialpersonalfinancialcommitmenttoenterintoanovatedlease;and

itdidnotprovideanyprotectionagainsttheliabilityarisingtherefromintheeventofterminationofthecontractofemploymentforareasonotherthanmisconduct,wilfuldisobedienceorpersistentincompetence,

iscontrarytothefactsallegedintheoriginatingapplication.

Secondly,itwasarguedthatgivenMrQuinnwasdismissedforpersistentincompetence,theclaimedreliefwouldnothavebeenofanybenefit,eveniftheoriginatingapplicationhadbeengranted.

Thirdly,itwasarguedthattheoriginatingapplicationwaswithdrawn,justdaysbeforeitwastogotoahearing,toavoidanypotentialforanOrderforcosts. Inthisrespect,itwassubmittedthatMrQuinnandhislegaladvisorshadenteredintoacontingencyarrangementandtheonlywaythatMrQuinncouldhaveincurredanycostswouldhavebeenifheallowedthemattertogototrial. ItwassuggestedMrQuinnhadtakenthestepofwithdrawingtheoriginatingapplicationatthelastmomentinordertoavoidthispossibilitybecausehehadultimatelyrealisedthattheoriginatingapplicationwaswithoutmeritandthattheonlywayhecouldbeforcedtopayanycostswouldbeifheallowedthemattertoproceed.

MrQuinn'sposition

OnbehalfofMrQuinn,MrDwyeralsopresentedadetailedoutlineofsubmissions(Exhibit3)andreferredtoanumberofcasestosupportthosesubmissions. Withoutgoingtothewholeofhissubmissions(again,theyareamplyrecordedinExhibit3andonthetranscript),MrDwyermadethefollowingmajorpoints:

ThelongstandingphilosophyoftheCommissionisthat,intheabsenceofafrivolousorvexatiousapplicationorothercircumstancesthatareabnormal,costswillnotbeawardedinthetraditionalkindsofmatterswithinthejurisdictionoftheCommission(perMcKenziePinGoldmanvDataGeneralAustraliaPtyLtd (1993)144QGIG379at380).

Noonewithareasonablyarguablecaseneedbedeterredfromproceedingbyfearoftheconsequencesofthecostsunlesssomeabnormalunfairaspectentersintotheconductoftheproceedings(perMcKenziePinGoldman(supra)at380).

Thegeneralprincipleinrelationtothediscontinuanceofanapplicationisthatprovidednoinjusticewillbecausedtoarespondentanapplicantshould,inordinarycircumstances,beallowedtodiscontinueanapplication. Itisinappropriatetoforceanapplicanttoatrialofthoseissuesindisputeiftheapplicantdoesnotwishtoproceed(perBladesCinAlbertSmithSonPtyLtdvFellows(2005)180QGIG115).

Inacaseinvolvingdisputedquestionsoffact,itissimplynotpossibletodeterminewhethertheproceedingwasinstitutedvexatiouslyorwithoutreasonablecauseunlessthematteristried(perGrayJinSaddingtonvOliverandOthers(No2)(1993)49IR412,adecisionreferredtobyBladesCinAlbertSmithSon(supra)).

Atthetimetheunfaircontractapplicationwasmade,MrQuinnwasnotinpossessionof:

Headline's(quiteextensive)statementsofevidence;

materialobtainedbywayofattendancenotice;or

othermaterialdisclosedbyHeadline,onanon-goingbasis,upuntil28November2005.

Itwasonlyatthistime(i.e.28November2005),notatthetimetheoriginatingapplicationwasmade,thatMrQuinnrealisedthathisoriginatingapplication'sprospectsofsuccesshadreducedandhemadethedecisiontodiscontinueitpursuanttoRule64oftheRules.

MrQuinnmaintainsthatonthematterspleadedinhisoriginatingapplication,andonthematerialcontainedinhisstatement,hestillhadanarguablecasethatthecontractbecameunfairafteritwasenteredinto.

Therewasnothingintheoriginatingapplication,whenitwasmade,whichindicatedthatitwasmadewithoutreasonablecause.

Theauthorities

Section335oftheActrelevantlyprovidesasfollows:

"335Generalpowertoawardcosts

(1)Thecourtorcommissionmayorderapartytoanapplicationtopaycosts,includingwitnessexpensesandotherexpenses,incurredbyanotherpartyonlyifsatisfied -

(a)thepartymadetheapplicationvexatiouslyorwithoutreasonablecause;".

Thesectionhasattractedadealofattentionovertheyearsandaclearpatternhasemergedastothewaytheprovisionistobeinterpretedandapplied. Withoutbeingexhaustive,thefollowingleadingdecisionspaintaclearpictureofthecircumstanceswhichwouldneedtoprevailbeforetheCommissionwouldregardanapplicationashavingbeenmadevexatiouslyorwithoutreasonablecause.

InMIMHoldingsLimitedvAMEPKIU(2000)164QGIG370,HallPindicated:

"Intheordinarycaseinwhichanappellantwhowasarespondentinthecommissionissuccessful,itwillbeknownattheendoftheappealthattheapplicationmadetothecommissioncouldnotsucceed. Asamatteroffirstimpression,thepurposeofs.335seemstobetosparepartiestheruleofhavingtopaythecostsofanopposingpartywhilstprovidingameasureofprotectiontopartiesdefendingproceedingswhichhavebeeninstitutedvexatiouslyorwithoutreasonablecause,compareHeidtvChryslerAustraliaLimited(1976)26FLR257at272perNorthropJ. Iamreluctanttoconstruetheprovisioninsuchawaythatasuccessfulappellant(respondent)wouldalways,subjecttothe(proper)exerciseofdiscretion,recovercostsoftheappealandtheapplicationwhilstasuccessfulappellant(applicant)wouldneverdoso. Itseemstometobemorelikelythats.335(1)(a)isaimedatthecasewhichwasobjectivelyrecognisableasonewhichcouldnotsucceedatthetimewhentheapplicationwasmade.".(emphasisadded)

InWaltersvBTEquipmentPtyLtd(No2)(2002)169QGIG227,aFullBenchoftheCommission(comprisedofHallP,BladesandThompsonCC)stated:

"Thepurposeofs.335(1)is,plainlyenough,tofreepartiesfromtheriskofhavingtopaythecostofanopposingpartywhilstgivingsomemeasureofprotectiontopartiesdefendingproceedingswhichhavebeeninstitutedvexatiouslyorwithoutreasonablecause,compareHeidtvChryslerAustraliaLimited(1976)26FLR257at272perNorthropJ. Here,theapplicationforleavetoappealwasneithermadevexatiouslynormadewithoutreasonablecause. Themostseverecriticismwhichmaybemadeoftheapplicationforleaveisthattheapplicant'slegaladvisersmadeaforensicerrorintheconstructionofanovel,clumsilydraftedanduntestedstatutoryprovision. Aconclusionthattheapplicationwasnotarguablemayonlybereachedbybaskinginthewisdomofhindsight. Therewasnovexationorabuseofprocess.".(emphasisadded)

InAlbertSmithSon(supra),BladesCstated:

"Providedthatnoinjusticewillbecausedtoarespondent,anapplicantshouldinordinarycircumstancesbeallowedtodiscontinueanapplication. InCovellMatthewsandPartnersvFrenchWoolsLtd(1977)1WLR876GrahamJsaid:

'Theprinciplestobeculledfromthesecasesare,inmyjudgment,thatthecourtwill,normally,atanyrate,allowaplaintifftodiscontinueifhewantsto,providednoinjusticewillbecausedtothedefendant.Itisnotdesirablethataplaintiffshouldbecompelledtolitigateagainsthiswill. Thecourtshouldthereforegrantleave,ifitcan,withoutinjusticetothedefendant,butindoingsoshouldbecarefultoseethatthedefendantisnotdeprivedofsomeadvantagewhichhehasalreadygainedinthelitigationandshouldbereadytogranthimadequateprotectiontoensurethatanyadvantagehehasgainedispreserved.'.(emphasisadded)

Ofcourse,oneoftheconsiderationsistheissueofcosts. Section335oftheActgivestheCommissionapowertoawardcostsonlyifsatisfiedthat '(a)thepartymadetheapplicationvexatiouslyorwithoutreasonablecause.'. Itisinsufficient,forapartyseekingcosts,toshowmerelyinadvertenceorneglect. 'Withoutreasonablecause' musttakeitscolourfromtheprecedingword 'vexatiously' although 'withoutreasonablecause' setsthelowerstandardofthetwo - seeGeorgevAlliedExpressTransportPtyLimited(2003)173QGIG158andLarorbPtyLtdt/aSunshineOfficeSuppliesvBall(2003)174QGIG1013. InThompsonvHodder(1990)21FCR467theCourtsaidat470:

'InHeidtvChryslerAustraliaLtd(1976)26FLR257at272,NorthropJsaid:

"Thepolicyofs197AoftheActisclear. Itisdesignedtofreepartiesfromtheriskofhavingtopaycostsofanopposingparty. Atthesametimethesectionprovidesaprotectiontopartiesdefendingproceedingswhichhavebeeninstitutedvexatiouslyorwithoutreasonablecause. Thisprotectionisintheformofconferringapowerinthecourttoordercostsagainstapartywho,insubstance,institutesproceedingswhichinotherjurisdictionsmayconstituteanabuseoftheprocessofacourt.".

Itisapparentfromtheseauthoritiesthatanapplicantwhohasthebenefitoftheprotectionofs.347willonlyrarelybeorderedtopaythecostsofaproceedinginexceptionalcircumstances.'.

ItwasheldbyhisHonourthePresidentinMIMHoldingsLimitedvAutomotive,Metals,Engineering,PrintingandKindredIndustriesIndustrialUnionofEmployees,Queensland(2000)164QGIG370thats.335(1)(a)wasaimedatthecasewhichwasobjectivelyrecognisableasonewhichcouldnotsucceedatthetimewhentheapplicationwasmade.".(emphasisadded)

Later,inthesamedecision,BladesCobserved:

"Noneofthequestionsraisedbythepleadingshasbeendeterminedanditisinappropriatetoforcetheapplicanttoatrialofthoseissuesiftheapplicantdoesnotwishtoproceed.

...

InSaddingtonvOliverandOthers(No2)(1993)49IR412GrayJheldthatinacaseinvolvingdisputedquestionsoffact,itissimplynotpossibletodeterminewhethertheproceedingwasinstitutedvexatiouslyorwithoutreasonablecauseunlessthematteristried.

...

NoadjudicationhasbeenmadeonthejurisdictionalquestionsraisedbytheCommissioninthiscase,norhasitbeenargued,andtherespondenthimselfhasneverclaimedalackofjurisdiction,atleastuntiltheobjectiontothediscontinuancewaslodged. Idonotconsideritcouldbesaidtobe 'objectivelyrecognisable' thattheapplicationcouldnotsucceed. InLlewellynvPropertySalesAssociationofQueensland,UnionofEmployees(2001)167QGIG266,thePresidentsaidthatitwouldbeinvidioustocommentontheprospectsofsuccessofanappealwhichhadbeenwithdrawn.

Thisisanindustrialmatterwherethenormalrule,setoutintheAct,isthatcostsarenotawarded. Thephrase 'withoutreasonablecause' suggestsconductvergingonanabuseofprocess,videGeorgeatp.159.". (emphasisadded)

Withoutreferringtothem,IalsonotetheotherdecisionsreferredtobyMrDwyer,whichareinasimilarvein.

Conclusions

WhilstIhavesomesympathyfortheplightofHeadline,inthatithasincurredconsiderablecostsinpreparingtodefendtheoriginatingapplication,IamboundtoapplythelegislationasithasclearlybeenwrittenandinamannerconsistentwithpreviousdeterminationsofthisCommissionandoftheIndustrialCourtofQueensland,asrecordedabove.

Withduerespecttohiscarefullypreparedwrittensubmissions,andwellpresentedargument,MrFox'scontentionsdonotclearlyestablishthattheoriginatingapplication,whenlodged,wasnotarguable. Rather,hiscontentionsserveonlytohighlighttheareasofdisputedfactandHeadline'sviewofthoseparticularfacts. WhetherHeadline'sviewswouldhaveprevailed,overthoseofMrQuinn,onewillneverknow.

AstheFullBenchinWalters(supra)stated "aconclusionthattheapplicationwasnotarguablemayonlybereachedbybaskinginthewisdomofhindsight". Similarly,asthePresidentstatedinLlewellyn(supra) "itwouldbeinvidioustocommentontheprospectsofsuccessof(anapplication)whichhasbeenwithdrawn".

Inmyview(subjecttothecaveatsnotedbyBladesCinAlbertSmithSon(supra)above),noimpedimentshouldbeplacedinthepathofanyapplicantwhowishestodiscontinueanapplicationiftheyreachtheconclusionthattheultimatebenefittobeachievedbypursuingthemattertotrialdoesnotjustifythatcourseofaction. Thecircumstancesleadingtosuchadecisionbeingtakenarenumerousbutthemostcommonwouldappeartobe:

thattheotherparty'scaseisbetterthantheapplicantfirstappreciated;

thattheapplicant'scircumstanceshavechangedsincetheapplicationwaslodged;

thattheapplicanthasmitigated(fullyorpartially)theirexpected(oractual)losses;and

thatthepotentialoutcomeofanyproceeding,assessedatagivenpointintimebasedupontheknownauthoritiesandknownfactsatthattime,doesnotfinanciallyjustifyproceedingbeyondthatpoint.

FromthesubmissionsofMrDwyeritappearsthateachoftheelementsmentionedabovewas,toavaryingdegree,influentialinMrQuinn'sdecisiontodiscontinuetheoriginatingapplication. Bethatasitmay,MrQuinn'sparticularmotiveshavenotinfluencedmyultimatedecision.

InallofthecircumstancesIamnotpersuadedthattheoriginatingapplicationwasonewhichwasmade "vexatiouslyorwithoutreasonablecause" orthattherehasbeensome "abnormalunfairaspect" (seeGoldman(supra))whichwarrantsfurtherconsiderationorexamination.

TherehasbeennoadvantagegainedbyHeadlineintheproceedingswhichneedstobeprotectedorpreserved. Rather,Headlinehas "saved" furthercostsbecauseofMrQuinn'sdecisionnottoproceedwiththeoriginatingapplication.

Fortheforegoingreasons,IdismissapplicationnumberB/2005/1243.

TheCommissiondeterminesandordersaccordingly.

A.L.BLOOMFIELD,DeputyPresident.
HearingDetails:
200522December
Released: 31January2005 / Appearances:
MrL.FoxandMrB.Wetzig,ofFoxLawyers,fortheapplicant.
MrJ.Dwyer,CounselinstructedbyMrL.ForsythofHallPayneLawyers,fortherespondent.

GovernmentPrinter,Queensland

TheStateofQueensland2006.