Attorney-General v Wentworth

The essential complaint of the applicants was that the Award was made without any or any proper consultation with ambulance officers employed as Extended Care Paramedics ("ECPs") and that the Award represented a serious reduction in pay and conditions for ECPs with wage reductions of up to $30,000 or more.

On 1 February 2011, his Honour's Associate informed Ffrench Legal that his Honour considered himself to be " functus officio " . On 8 February 2011, Ffrench Legal again applied to his Honour on behalf of its clients for an opportunity for them to be heard. The matter was listed for hearing on 24 February 2011. However, in the meantime Staff J referred the matter to the President pursuant to s 193 of the 1996 Act and the President determined that a Full Bench should deal with the matter.

In proceedings on 4 March 2011 his Honour the President advised the Department, HSU East and counsel for the applicants of his decision to refer the matter to a Full Bench. The applicants were directed to regularise their claim by filing and serving a notice of motion and the motion was listed for hearing on 8 April 2011.

Application to set aside judgment and orders of Staff J 7The 13 individual ambulance officers who are the respondents on this present motion sought the following orders before the Full Bench:

1. An order pursuant to rule 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW) that the judgement and orders made by his Honour, Justice Staff, on 24 December 2010 in proceedings No. IRC 1514 of 2010 be set aside or varied.
2. An order pursuant to regulation 2.5(3) of the Industrial Relations Commission Rules 2009 (NSW) or rule 36.17 of the Uniform Civil Procedure Rules 2005 (NSW) that the judgement and orders made by his Honour, Justice Staff, on 24 December 2010 in proceedings No. IRC 1514 of 2010 be corrected.

Full Bench decision 8The threshold question for the Full Bench was whether the 13 individuals had standing to make the application in their notice of motion. The Full Bench decided they did not. In arriving at that conclusion the Full Bench considered the case put by the applicants regarding standing, which was essentially that: (a) sections 11 and 12 of the Act ought be construed by reference to s 209 of the Act; (b) sections 11 and 12 of the Act created a distinction between the persons eligible to make an application for the making of an award and the persons eligible to become parties to the making of an award; (c) section 209 of the Act enshrined a fundamental human right which had to be given substantive force. 9This, it was submitted, led to the conclusion that, under the Industrial Relations Act 1996 ("the Act"), employees may be a party to the making of the award. 10HSU-East and the Department contended there was no capacity for individual employees, or groups of employees, outside of a registered union, to make application for, or to be heard in relation to the making of, an award. 11The Full Bench considered that the question of whether an individual employee could be a party to an award and, therefore, able to seek to vary an award or set it aside, was to be determined according to the rules governing statutory interpretation. 12The Full Bench examined, in some detail, the construction of the relevant provisions as well as the antecedent provisions and the relevant case law. It also considered the intention underlying s 209 of the Act. The Full Bench concluded that the Act precluded an individual employee from either becoming a party to the making of an award or from being joined as a party to an award under Pt 1 of Ch 2 of the Act. 13In relation to r 36.16(2)(b) ("the absent party rule") of the Uniform Civil Procedure Rules 2005, the Full Bench found it was not available to individual employees seeking to set aside an award of the Commission made under Pt 1 of Ch 2 of the Act. 14In relation to the slip rule, the Full Bench found there was no evidence or suggestion that Staff J committed a "clerical mistake". Nor was there any evidence or indication of an "error" arising from an "accidental slip or omission", or a "mistake" arising from an "accidental slip or omission" that is required to be corrected in the Award.

Case for HSU-East 15After identifying the relevant authorities dealing with frivolous or vexatious applications and applications made without reasonable cause, HSU-East submitted the proceedings were, in reality, nothing more than a "stunt by supporters of EMSPA designed to attract some form of legitimacy to EMSPA as an industrial representative of paramedics in this state." Moreover, based on well-known authorities of this Commission, there was "never the remotest possibility that the proceedings could succeed" and the "proceedings were entirely misconceived and doomed to fail from the outset." 16As to standing, HSU-East submitted the relevant authorities relied upon by the applicants were so clearly and obviously against them that their case was so "obviously untenable" and so "manifestly groundless", there was never any substantial prospect of success. This was evident, it was submitted, from the Full Bench's treatment of the applicants' case, a case that was unsuccessful on every point raised by them. 17In relation to the "absent party" rule, it was submitted it was obvious (or should have been) that it was beyond any genuinely serious legal argument that the applicants on the motion before the Full Bench did not have, and could never have had, standing as applicants in the award proceedings (absent or otherwise) or as parties to the award. 18In relation to the "slip rule", it was submitted no attempt was made to identify any mistake or error, clerical or otherwise, made by Staff J in the making of the award, and where it was obvious (or should have been) that it was beyond any genuinely serious legal argument that the "slip rule" could not possibly apply.

Case for 13 individual employees 19The applicants relied upon the affidavits that were filed in the substantive application and the affidavit of Denise Louise O'Reilly. In addition, the applicants relied upon the further affidavit of Ms O'Reilly sworn on 14 June 2011. Ms O'Reilly is a solicitor with Ffrench Legal and had carriage of the matter. 20The applicants submitted that their application in the substantive proceedings was not a "stunt", but rather arose out of concern that despite their attempts to establish a dialogue, the Department had failed to communicate with them about negotiations for a new award and they had been excluded from those negotiations between HSU-East and the Department. No notification was given to employees (other than to officers of the HSU-East) about the making of the Award, the application to the Commission or the listing of the proceedings before Staff J. 21The new Award, according to the applicants, resulted in a reduction of the terms and conditions of Extended Care Paramedics including a material impact upon the wage relativities and work value as between the different classifications of the Award. 22Senior counsel for the applicants submitted: In short, non-unionised employees had no information that their terms and conditions were about to change. The failure to so notify or advise them was admitted by the Department of Health. Seen in light of this context, the applications made by the 13 Applicants were not a "stunt" designed to attract members or a "stalking horse" (whatever that means). The applications to Justice Staff were made in the context of them not being informed or consulted about the proposed New Award. It is also relevant that the Department of Health has now consented to orders pursuant to which it has agreed to provide regular updates and communications to all employees about any new industrial instruments and to give them an opportunity to provide comments in relation to those instruments. Had the Department of Health provided appropriate communications and consultation prior to the making of the New Award, the position that prevailed by 24 December 2010 could have been avoided. The proceedings were not commenced or maintained with the intention to cause an abuse of process or for collateral purposes. The proceedings were responsive to the conduct which had preceded the making of the New Award. 23The applicants submitted that none of their contentions regarding the construction of the Act were "manifestly groundless, obviously untenable or utterly hopeless". The applicants submitted they should not be penalised simply because their arguments proved unsuccessful. The success or failure of their arguments depended on questions of statutory construction which were ultimately decided against their interests. 24The applicants submitted: (a) a review of the authorities discloses that the Commission has never before considered the proper construction and operation of s 209 of the Act; (b) the proceedings were not misconceived nor doomed to fail from the outset. If they were so, then it would have been open for the HSU-East to make an application to have the proceedings dismissed or struck out. The HSU-East did not take this step; (c) it is apparent that Staff J considered that the matter was of sufficient importance so as to refer the matter to the President after having listed the matter for hearing. And, it is further apparent that the President considered that the matter was of sufficient importance for a Full Bench to be convened. It is to be assumed that a Full Bench was convened because the matters raised in the application were of sufficient public importance that they warranted due consideration by the most senior members of the Commission; (d) the Applicants' submissions in the substantive proceedings were not simply based upon a construction of ss 10 and 11 of the Act, but advanced arguments about the proper construction of those provisions having regard to s 209 of the Act. This is a matter that had never before been ventilated before the Commission. It cannot be said that this matter was without substance; and (e) it is telling that the Department of Health and the ASNSW have not sought their costs. It is to be assumed that no view was formed by the Department that the application advanced by the 13 Applicants was utterly hopeless or doomed to fail. 25It was further submitted for the applicants that they had a concern that the HSU-East's objective in making its application for costs was to punish the 13 applicants for challenging the making of the Award and as an indirect means of punishing EMSPA for having issued certain publications which questioned the HSU-East's decision making. The Commission, it was submitted, would not condone such an application.

Consideration 26The Commission's power to award costs is provided by s 181 of the Act: 181 Costs (1) Subject to the rules of the Commission and any other Act or law: (a) the Commission may award costs, and (b) costs are in the discretion of the Commission, and (c) the Commission may determine by whom and to what extent costs are to be paid, and (d) the Commission may order costs to be assessed on the basis set out in Division 11 of Part 3.2 of the Legal Profession Act 2004 or on any other basis. (2) However, the Commission when it is not in Court Session may award costs only in the following cases: (a) the Commission may award costs against an applicant if it considers that the application to it was frivolous or vexatious, or (b) the Commission may award costs against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause, or (c) the Commission may award costs against a party to proceedings under Part 6 of Chapter 2 (Unfair dismissals) who, in the opinion of the Commission, unreasonably failed to agree to a settlement of the claim or whose application was frivolous or vexatious, or (c1) the Commission may award costs against an industrial agent representing an applicant or employer in proceedings under Part 6 of Chapter 2 if: (i) the industrial agent fails to file a certificate as required by section 90A, or (ii) the Commission finds that the industrial agent has filed a certificate under that section certifying that the agent has reasonable grounds for believing, on the basis of provable facts, that the applicant's claim or employer's response to the claim had reasonable prospects of success when the agent did not have reasonable grounds for believing, on the basis of provable facts, that it had reasonable prospects of success, or (d) the Commission may award costs in proceedings for a breach of an industrial instrument or the recovery of money under Chapter 7, as provided by sections 357 and 373. (3) The Commission in Court Session may not award costs in proceedings for a contravention of a dispute order or in proceedings under Division 2 of Part 4 of Chapter 5 (Rules of industrial organisations). (3A) Despite subsection (1), the Commission may not award costs in proceedings under Part 7 of Chapter 2. Note. This subsection does not prevent the award of costs in appeals relating to questions of law in relation to public sector promotional and disciplinary matters under section 197B. (4) In this section, costs includes: (a) costs of or incidental to proceedings in the Commission, and (b) in the case of an appeal to the Commission, the costs of or incidental to the proceedings giving rise to the appeal, as well as the costs of or incidental to the appeal. 27Thus, in relation to the present proceedings, the Commission's discretion to award costs is limited by s 181(2)(a) and (b), namely, costs may be awarded against an applicant if the Commission considers that the application to it was frivolous or vexatious, or against a party to proceedings who, in the opinion of the Commission, instituted proceedings without reasonable cause. 28The exercise of the Commission's discretion to award costs involves a two stage process: see Bankstown City Council v Paris [1999] NSWIRComm 585; (1999) 93 IR 209 and Four Sons Pty Ltd v Sakchai Limsiripothong (No 2) [2000] NSWIRComm 131; (2000) 100 IR 400. The first stage requires a determination as to whether s 181(2) of the Act is enlivened. The second stage of the process requires the Commission to exercise its discretion whether to award costs under s 181(1) of the Act. 29The parties referred the Full Bench to a number of authorities dealing with what is frivolous or vexatious and what is to be regarded as without reasonable cause: Burton v Shire of Bairnsdale [1908] HCA 57; (1908) 7 CLR 76 at 92 per O'Connor J; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129 per Barwick CJ; Attorney-General v Wentworth (1988) 14 NSWLR 481 at 491 per Roden J; R v Moore; Ex Parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 at 473 per Gibbs J; Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264-265 per Wilcox J; Standish v University of Tasmania [1989] FCA 166; (1989) 28 IR 129 at 139 per Lockhart J. 30In Attorney-General v Wentworth , Roden J set out the following tests as to whether proceedings might be regarded as vexatious:

1. Proceedings are vexatious if they are instituted with the intention of annoying or embarrassing the person against whom they are brought.
2. They are vexatious if they are brought for collateral purposes, and not for the purpose of having the court adjudicate on the issues to which they give rise.
3. They are also properly to be regarded as vexatious if, irrespective of the motive of the litigant, they are so obviously untenable or manifestly groundless as to be utterly hopeless. 31In Kanan, Wilcox J said in respect of "without reasonable cause": It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where it appears that, on the applicant's own version of the facts, it is clear that the proceedings must fail, it may properly be said that the proceedings lacks a reasonable cause. 32We adopt, with respect, the tests in Wentworth and Kanan. Those tests are consistent with the other authorities we cited above. 33As to whether the proceedings were frivolous, we do not consider they were brought thoughtlessly or flippantly or that the applicants' intention in bringing the proceedings was not serious. The fact they were unsuccessful in their contention that, as individuals, they could be made party to the Award, does not translate into a frivolous application. 34As to whether the proceedings were vexatious, we do not consider the first test enunciated in Wentworth applies. The applicants did not set out to annoy or embarrass and there does not appear to be any suggestion that they did. It does seem to have been suggested, however, that the second test applies in that the applicants brought the proceedings for a collateral purpose, namely, that by making the application the 13 individuals were acting as a "stalking horse" for EMSPA, which was attempting to establish itself as an industrial rival organisation to HSU-East, as evidenced by a protracted campaign by EMSPA to gain support amongst paramedics in New South Wales. 35We must say we have some concern that in bringing the application there may have been the collateral purpose of which HSU-East complains. EMPSA was strident, almost offensively so, in its attack on HSU-East, the Ambulance Service, and indeed, this Commission in what did appear to be part of a campaign to establish itself as an alternative representative body for paramedics. Moreover, EMSPA was an applicant in the proceedings filed by Ffrench Legal in January 2011. In those proceedings Ffrench legal sought to have Staff J apply the slip rule or, alternatively, set aside the orders made on 24 December 2010 and permit its clients to be heard in relation to the making of the Award. EMSPA was not an applicant on the motion heard by the Full Bench. 36However, we are satisfied the primary purpose of the application before the Full Bench was a genuinely motivated but wrong headed attempt to secure the right of the applicants to be advised of and involved in any award negotiations affecting them. 37That leaves the third test in Wentworth of whether the proceedings were so "obviously untenable or manifestly groundless as to be utterly hopeless." Again we have reservations about aspects of the applicant's case, in particular the reliance on the slip rule where the Full Bench found there was no evidence or suggestion that Staff J committed a "clerical mistake". Nor was there any evidence or indication of an "error" arising from an "accidental slip or omission", or a "mistake" arising from an "accidental slip or omission" that was required to be corrected in the Award. 38Nevertheless, having regard to the applicants' case overall we do not consider the proceedings were "obviously untenable or manifestly groundless as to be utterly hopeless." The matter was obviously considered sufficiently important for the President to constitute a Full Bench to hear it and the Full Bench considered it necessary to go to considerable lengths in its decision to address each of the applicants' contentions. It was not open, as the decision demonstrates, to simply dismiss the application out of hand, which may well have been the case if the proceedings were "obviously untenable". 39The test enunciated in Kanan as to whether proceedings were brought "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceedings, there was no substantial prospect of success. As the applicant submitted, the Commission has never before considered the proper construction and operation of s 209 of the Act. The applicants' submissions in the substantive proceedings were not simply based upon a construction of ss 11 and 12 of the Act, but advanced arguments about the proper construction of those provisions having regard to s 209 of the Act. Whilst it should have been apparent to the applicants that they could face considerable difficulty in achieving success with their arguments, it could not be said the matter was without any substance. 40Finally, and without deciding the question, we have some real doubt as to whether, as a matter of construction or otherwise, costs orders could or would be made in arbitral proceedings relating to the making or variation of an award.

Conclusion 41Despite our reservations, we do not consider HSU-East has established that the threshold requirements of s 181(2)(a) or (b) of the Act have been met in this case. Accordingly, we propose to dismiss the application for costs and we so order.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 July 2011