Charkawi v RailCorp

Background and Chronology 10Mr Charkawi commenced employment with RailCorp on 30 October 2001. He was dismissed by RailCorp on 16 June 2008. 11Mr Charkawi's terms and conditions of employment were covered by the Rail Corporation New South Wales Union Collective Agreement 2008 an agreement made pursuant to the Workplace Relations Act 1996 (Cth) (Exhibit 3-A). 12On 8 July Mr Charkawi lodged an appeal with the Transport Appeal Boards pursuant to clause 43 of the Transport Administration (Staff) Regulation 2005 , against the decision of RailCorp to dismiss him from the position of Team Leader Flemington (Exhibit 3-C). 13The appeal (TD413/08) was heard by the Transport Appeal Boards on the 4 September 2008. Mr Charkawi was represented at the hearing by a Solicitor. By decision published the 18 September 2008 the appeal was disallowed (Exhibit 3-D). 14There was no appeal from that decision by Mr Charkawi. 15On 13 April 2010, Mr Charkawi lodged an application for relief in relation to the termination of his employment by RailCorp with Fair Work Australia pursuant to the Fair Work Act 2009 (Cth) which was some 20 months out of time (Exhibit 3-E). 16The application (U2010/7990) was heard before Senior Deputy President Hamburger on 17 May 2010 on the issue of the out-of-time nature of the application. Mr Charkawi was self-represented. The application was dismissed by an ex-tempore decision issued on that date (Exhibit 3-F). 17There was no appeal from that decision by Mr Charkawi. 18Mr Charkawi filed his s.84 application in the Industrial Registry on the 3 June 2011, some 1081 days outside the 21 day period prescribed by s.85(1). 19On the 17 June 2011 RailCorp wrote to Mr Cunningham concerning the requirement for him to file a s.90A(2) certificate; advising of the background to the application; raising jurisdictional issues (s.90); that the application was bound to fail; invited Mr Charkawi to withdraw his application, and reserving RailCorp's right to seek costs against both Mr Chakawi (per. s.181(2)(c) and Mr Cunningham as his Agent (per.s.181(1)(c) (Exhibit 4). 20On the 20 June 2011, RailCorp filed its 'Reply to Application for Relief in Relation to Unfair Dismissal', outlining in detail the background and chronology to the application, the jurisdictional issues to be raised and reserving its rights to seek costs. 21The matter was set down for conciliation and directions on the 27 June 2011 with conciliation taking place, Practice Direction 17 issued and the file returned to the Registry for allocation of an hearing date. 22On the 21 July 2011, RailCorp again wrote to Mr Cunningham concerning his failure to file a s.90A(2) certificate; advising that the application was considered to be frivolous or vexatious and had no reasonable prospects of success (with the basis for such set out), and giving notice that upon the application being dismissed an application for costs pursuant to ss.181(1)(c) and 181(2)(c) would be made (Exhibit 5).

Submissions on behalf of the Respondent 23Mr Ginters on behalf of RailCorp referred to the provisions of s.181 (2)(c) of the Act which allowed the Commission to award costs against an applicant to proceedings under Part 6 where the application was frivolous or vexatious. He also referred to s.181(1)(1c) that allows the Commission to award costs against an Industrial Agent representing an applicant or employer in proceedings under Part 6 of Chapter 2. 24Mr Ginters submitted that in RailCorp's letter to Mr Cunningham of 17 June 2011, attention was drawn to the fact that Mr Charkawi had appeal proceedings dismissed in the Transport Appeal Board; had made an application to Fair Work Australia which was dismissed; that the application was nearly three years out of time and that there did not appear to have been any new or relevant developments in relation to the termination of Mr Charkawi's employment since his extension of time application was dismissed by Fair Work Australia. 25The correspondence also drew attention to the s.90 problem and further went on to identify the fundamental difficulty arising from the fact that Mr Charkawi was employed under a Federal Industrial Agreement, namely the RailCorp Collective Agreement 2008 . The letter went on to say "If your client fails to withdraw his application RailCorp reserves its right seek an order for costs against your client pursuant to section 181(2)(c) of the Act on the grounds that the application must be categorised as frivolous and vexatious". It was further advised that RailCorp also reserved its right to seek an order against Mr Cunningham pursuant to 181(c1) of the Act. 26It was submitted that there could be absolutely no doubt that prior to the conciliation conference Mr Charkawi and Mr Cunningham were squarely on notice as to why RailCorp said there was no jurisdiction for the Commission to entertain the application. There was a reasonable request made that they withdraw the proceedings at that point in time which was made against a long history of the matter. 27Mr Ginters submitted that if the matter was not abundantly clear by that correspondence, which it should have been, then following the conciliation proceedings, RailCorp again wrote to Mr Cunningham on 21 July 2011, setting out the issues addressed in the RailCorp's written submissions; identifying the reasons why the case just had no prospects of success whatsoever; drawing attention to the fact Mr Cunningham had not filed a s.90A certificate; re-emphasising that the application was viewed as frivolous and vexatious; with the correspondence going on to say, "We wish to put you on notice that upon Mr Charkawi's Application being dismissed we intend making an application for costs pursuant to ss181(1)(c1) and 181(2)(c) of the IR Act". 28It was submitted that notwithstanding that correspondence, and putting them on notice of the issues that would be raised, the proceedings were not withdrawn. That meant Railcorp incurred the cost of briefing counsel, having submissions drafted and having counsel appear in answer to the case. Very shortly after the hearing commenced there was a concession on behalf of Mr Cunningham acting for Mr Charkawi that the proceedings were now going to be withdrawn. 29It was submitted that unquestionably costs had been thrown away associated with this matter and there could not be any doubt that the application was frivolous or vexatious and had no prospects of success. 30It was submitted that one of the tests of vexatiousness was if the propositions which are contended for are obviously untenable or manifestly groundless. That had clearly been established. The application was also clearly frivolous because there was no jurisdictional basis upon which these proceedings could have in any way succeeded. That was a matter that was conceded by Mr Cunningham because they were withdrawing the proceedings in this matter but doing so after they had put RailCorp to the considerable expense of both preparing submissions and being required to brief counsel to appear in response to that application. 31It was submitted that there could not be any doubt that RailCorp ought to be entitled to costs against Mr Charkawi in that respect. While costs orders in this jurisdiction were not the usual course, the fact that the Commission may have a degree of sympathy for Mr Charkawi, or that the Commission might be generally loath to award costs against an applicant, was not the test the Commission was required to apply in this case. The Commission was required to apply a test as set out by the statute and RailCorp clearly met the circumstances set out in the statute. 32It was submitted that in relation to the issue of costs against Mr Cunningham and the provisions of 181(2)(c1) of the Act, that there was the capacity to "award costs against an industrial agent" . The Commission was referred to the definitions set out in the Dictionary of the Act and in particular of that of an industrial agent - "means a person (other than an Australian legal practitioner or employee or officer of industrial organisation) who represents a party in proceedings before the Commission for fee or other reward". Mr Ginters submitted that Mr Cunningham had been approached in relation to the issue of the filing of the s.90A certificate and the response received was that Mr Cunningham was acting as a 'volunteer' in these proceedings. If that was the case, then it was difficult to suggest that he was acting for 'fee or other reward'. 33It was submitted that if the Commission was not satisfied that Mr Cunningham was an industrial agent as defined in the Act, there could not be a costs order made against him. However that was no answer to the way this matter had unfolded and that the application made by Mr Charkawi was both frivolous and vexatious, It was only necessary to establish one or the other of those two grounds. In circumstances where costs were incurred unreasonably on the basis of a frivolous or vexatious application, then RailCorp should be awarded costs.

Submissions on Behalf of the Applicant 34Mr Cunningham submitted on the issue of frivolous or vexatious that when they applied for relief under unfair dismissal they were granted the conciliation process and also they were then granted arbitration, so somewhere along the line the IRC saw fit to sit there and say there were reasonable grounds for the matter to proceed to be arbitrated afterwards. Mr Cunningham also pointed out that the Commission had actually seen that the matter was heard twice. 35In response to the s.90A issue Mr Cunningham submitted that there were many volunteer advocates throughout NSW who operated in similar circumstances and grounds as Mr Ginters They appeared in tribunals and Courts and other jurisdictions as well. He had been a practicing advocate for 12 years. They used exactly the same terminology as the legal profession did. Mr Cunningham rejected perceived criticism from Mr Ginters and submitted that the title of 'advocate support person' was a legitimate title. 36Mr Cunningham submitted he considered it was rather frivolous and vexatious to pursue costs against him as well because it actually proved the point that they were arguing an effective case, had grounds to pursue the case, and that was what they had been doing. 37It was submitted that to pursue costs against Mr Charkawi would be grossly unfair and would place him in tremendous hardship. He had a family to support, and was a part-time taxi driver because of what had happened since his dismissal. He had the cost paying off his cab, his livelihood, as well as his family. To place costs on Mr Charkawi would be a tremendous hardship for him and it would mean he would placed in a far worse situation than what he was already in. He had suffered for three years and placing costs on him now would be over the top and would just basically grant RailCorp another free kick, which was not a fair and just outcome. 38It was also submitted that RailCorp had a legal department and solicitors in that department who could run cases for them. The fact that they had actually gone outside to get external counsel was a matter for them, not a matter to determine costs against either Mr Charkawi or himself. Further Mr Cunningham believed that this should actually show that Mr Charkawi's case did have some question marks because they could not deal with it themselves. This has already been through a RailCorp solicitor, their legal manager and now external counsel. That opened up the field for some questions as to why RailCorp could not handle this matter themselves.

Submissions in Reply on Behalf of the Respondent 39In reply, Mr Ginters submitted that the first submission, that the IRC saw fit to allow the proceedings to be filed was, with respect to Mr Cunningham, a nonsense. All that happened was that the Registry accepted an application. It was not for the Registry to form a view as to whether an application was frivolous or vexatious, that was a matter which came on for determination in the substantive proceedings. The Registry was not a filter in that mechanism. 40It was submitted that insofar as Mr Charkawi's family circumstances were concerned that was entirely irrelevant to the question of whether costs ought be awarded in this jurisdiction. 41Further, what was wholly missing from Mr Cunningham's submissions was the fact that both he and Mr Charkawi were squarely on notice from before the conciliation proceeding was heard that the case was bound to fail and that there was no jurisdiction for the Commission to entertain the application. They had blindly chosen to ignore the clear correspondences in that regard and by doing so, required RailCorp to incur unnecessary and unreasonable costs. 42In response to the third point, that RailCorp had a legal department, Mr Ginters submitted that it was a matter for RailCorp as to who it wished to have act for it in proceedings. RailCorp had chosen to brief counsel and did so against a backdrop of where it had done everything that it could possibly do to put the other side on notice that their case was doomed to fail, and when that was unsuccessful, despite its best endeavours, it elected to brief counsel on the matter. It was entitled to do so. 43It was submitted that none of that detracted from the fact that the application on any view was one which was frivolous and vexatious and that simple proposition was made good by the fact that once the hearing of this matter had commenced there was an acceptance on behalf of Mr Charkawi, the applicant, that the application could not succeed in this jurisdiction. 44As to the question of costs against Mr Cunningham , it was conceded that if the position was that he acted as a volunteer then Mr Ginters drew the Commission's attention to the provisions of the Act which indicated that a costs order could not be made personally against him. 45In response to the Commission indicating an intention to reserve to enable consideration of the issues arising in the context of a claim for costs on the basis of frivolous and vexatious rather than the more usual ground of unreasonably failing to agree to a settlement, Mr Ginters further reminded the Commission that inviting an applicant to withdraw a matter when there was no jurisdiction was an offer of settling the matter because it would have avoided further costs incurred in the proceeding. RailCorp did that. It was clearly open to the applicant to otherwise withdraw the proceedings and they had chosen not to do so. There was, therefore, a potential third element available in terms of costs. 46Mr Ginters accepted that it was unusual for costs to be awarded in this jurisdiction, but submitted that this was quintessentially the type of case in which costs ought be awarded because it was the dilatory conduct on behalf of Mr Charkawi that had resulted in the hearing, they now accepted there was no jurisdiction, withdrew the proceedings and were going somewhere else. That could not be visited against RailCorp. 47Mr Cunningham further responded by submitting that at conciliation they were actually granted a arbitration process and that was carried out and they proceeded with that. Mr Cunningham believed they were pursuing a fair and just decision and outcome and the righting of a wrong that had clearly been done. 48Mr Charkawi also sought to address the Commission with Mr Ginters indicating that it was a matter for the Commission. 49The Commission allowed Mr Charkawi to make a short address. He indicated that he had lost his job, his livelihood, and did not feel he was frivolous or vexatious. He was trying to get his job back. He believed that as a result of the conciliation he could go to the next step that was the only reason they were here. RailCorp was trying to stop them trying to get a decent and honourable outcome. The only reason they ran the case was they thought they had a decent chance. He currently had no money and had financial and family difficulties following his dismissal (which he very briefly detailed).

Consideration 50I have carefully considered the submissions of the parties in this matter, the relevant provisions of the Act, as well as the relevant authorities. 51The Commission's only power to award costs in unfair dismissal proceedings is that found in s181(2) which relevantly provides as follows: (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 application 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 (d)....... 52The relevant authorities in relation to an application for costs on the grounds of frivolous or vexatious were considered in some detail by Backman J in Tapia v Emibarb Pty Ltd t/as Lagoon Seafood Restaurant [2005] NSWIRComm 232 as follows: 116 In Peden v Lake Macquarie Refrigeration Pty Ltd (2003) 134 IR 149 the Full Bench of the Commission examined the meanings of "frivolous" and "vexatious" in the context of s181(2)(c) of the Act. At [19] and [20] of the decision, the Full Bench said in relation to the meaning of "frivolous": We note that "frivolous" is defined by the Oxford English Dictionary as "of little or no weight, value, or importance; paltry, trumpery; not worthy of serious attention; having no reasonable ground or purpose". In light of the well established line of authority, and the ordinary meaning of the word "frivolous", we are satisfied that an application under s84 will be frivolous if, on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter. 117 The Full Bench in Peden v Lake Macquarie also considered whether the application to the Commission under s84 of the Act was vexatious. At [28] - [30] the Full Bench made the following observations: There is an absence of any discussion as to the nature of the test to be applied to determine whether an application is vexatious for the purpose of s181(2)(c). Counsel for the appellant submitted that the following definition of "vexatious" in Attorney General v Wentworth (1988) 14 NSWLR 481 per Roden J at 487 is "generally regarded in the Commission as useful": It seems then that litigation may properly be regarded as vexatious for present purposes on either objective or subjective grounds. I believe that the test may be expressed in the following terms:

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 for which they give rise.
3. They are also properly to be regarded as vexatious if, irrespective of a motive of a litigant they are so obviously untenable or manifestly groundless as to be utterly hopeless. The basis of counsel's observations as to Attorney General v Wentworth was its adoption by Sams DP in Stephan v RL Whyburn and Associates [2000] NSWIRComm 154 and by Harrison DP in Fairweather v Ladehai Pty Ltd T/as North Star Holiday Resort [2002] NSWIRComm 367. In our view, there is nothing in the findings in the decision on costs that supports the conclusion that the s84 application was vexatious. In particular, we note that the findings in paragraphs [25] and [26] of the decision under appeal do not assist in the determination of that question. 118 In Attorney-General v Wentworth , Roden J considered whether the appropriate test of whether proceedings are vexatious should be assessed on either subjective or objective grounds, or a combination of both. As the passage extracted by the Full Bench in Peden v Lake Macquarie Refrigeration above illustrates, Roden J held that it was a combination of both. 119 Whether proceedings are instituted by a party without reasonable cause has received much judicial comment. In R v Moore; Ex Parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470 Gibbs J said at 473: ...a party cannot be said to have commenced a proceeding 'without reasonable cause', within the meaning of that section, simply because his argument proves unsuccessful. 120 In Kanan v Australian Postal and Telecommunications Union of Australia (1992) 43 IR 257 at 264-265, Wilcox CJ said: 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 proceeding, 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, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 121 In Imogen Pty Ltd v Sangwin (1996) 70 IR 254 Wilcox CJ at 257 dealing with a submission that there was no substantial difference in meaning between "vexatious" and "without reasonable cause" said: I doubt that this is correct; if the two expressions were intended to mean the same thing, there would have been no need for Parliament to use both of them. If there is a difference in meaning, "without reasonable cause" is the lower standard. 122 There is some overlap in various meanings adopted above. An application, for example, brought by the applicant could be both frivolous and vexatious, on the objective test for vexatiousness, if it is manifestly groundless. 53I adopt those considerations. 54In this matter whilst it may be that neither Mr Cunningham and Mr Charkawi were fully aware and appreciative of the jurisdictional barriers (not just hurdles) present in the Act (s.90) to Mr Charkawi's s.84 application, or the potential for a costs application when the application was filed, they were very clearly and in very succinct terms, put on notice in writing about those issues by the respondent, RailCorp, on no less than three occasions - the Employer's Reply filed on 20 June 2011, and the two letters from RailCorp of the 17 June and 21 July 2011. 55Indeed it is hard to see how there was no appreciation of the difficulties of proceeding with a s.84 application in the first place which sought to re-litigate the same issues (Mr Charkawi's termination in 2008) in yet a third legal forum. This is particularly so given that in dismissing Mr Charkawi's Fair Work application (made just over twelve months before the filing of the s.84 application), Senior Deputy President Hamburger said inter alia : With regards to the merit of the application it is appropriate that Fair Work Australia have regard to the fact that this matter has already been dealt with [by] the TAB. Mr Charkawi was legally represented before that tribunal and that tribunal rejected his case. Nothing Mr Charkawi has put to me today suggests that the TAB got the matter wrong. The application appears to lack merit. 56Mr Cunningham and Mr Charkawi seem to have placed ill-conceived and misguided reliance on the fact that the application was accepted by the Industrial Registry on filing, proceeded to conciliation and on there being no settlement, proceeded to arbitration. That did not mean they could assume that in any way that meant they had a case and could ignore the indisputable jurisdictional issues that had been raised and pressed and the consequences of proceeding in this matter. Mr Ginters is quite correct in submitting that it is not for the Industrial Registry to act as a filter for applications. Applications are just accepted as part of an administrative process. Mr Charkawi clearly filled out the s.84 application in handwriting himself and whilst he gave little detail in the actual application (e.g the date of termination etc), Mr Cunningham filed the application under a covering letter dated 31 May 2011 which referred to the fact that Mr Charkawi had "previously and unsuccessfully appealed the matter" in both the TAB and Fair Work Australia, attached a copy of the 2008 TAB decision, and made reference to, and raised issues of the hardship to Mr Charkawi. 57There can be no doubt that the jurisdictional issues were identified and referred to during the conciliation and directions hearing on the 27 June 2011. A matter cannot usually simply be dismissed at the conciliation stage (with the possible exception of 'want of prosecution' after due process) in the absence of either an applicant withdrawing the application, or a settlement being reached, in which case proceedings are usually noted as concluded or terminated on that basis. The mere fact that, in the absence of any settlement (and Mr Ginters again rightly puts that withdrawing the application would have been in the circumstances of this case a reasonable settlement of the matter), a matter proceeds to arbitration does not mean that an applicant can view that as signifying that there is a prospect of success. Mr Charkawi's failure to withdraw his application at that stage in the face of the jurisdictional issues raised by his application represented an unreasonable failure to agree to a settlement of his claim. However there was no alternative for the Commission, as it was then constituted, but to issue directions and set the matter on a path to arbitration. That did not mean there was any acceptance by, nor could there be implied to the Commission a consideration that Mr Charkawi's case had any merit. In any event it was clearly only set down only for determination of the jurisdictional issues. There was no alternative to that course of action. 58It is abundantly clear that in spite of having those very specific jurisdictional issues put squarely and plainly in terms that were, in my view, not capable of misunderstanding or misinterpretation, both Mr Cunningham and Mr Charkawi failed to give proper weight or consideration to either those issues or the clear and unequivocal notice given about costs and the consequences of proceeding. Indeed it is clear from the written submissions filed by Mr Cunningham that he seemed have somehow formed the view that this Commission could simply regard the TAB decision as "invalid", the Fair Work proceedings as "compromised through bias" and therefore "unlawful", and that this Commission "not bound by decisions of another States", could "determine its own decisions, make its own findings and set its own precedents" and in effect ignore both those decisions and the jurisdictional barriers they raised. That was simply totally incorrect and indicated a failure to acknowledge the relevant provisions of s.90 the Act. 59It is entirely irrelevant to any consideration of the costs application made on behalf of the respondent RailCorp to say that they have their own legal department and chose to go externally. They, as any respondent, or indeed any applicant, had the right to obtain the representation considered appropriate and necessary. Nor does it mean that it doing so that suggested that Mr Cunningham and Mr Charkawi were arguing an effective case and had grounds to pursue it - that was far, far from being the situation. 60Mr Cunningham sought in his written submissions as filed to generally traverse principles of justice and fairness. That can be done, but only in accordance with the law laid down in the relevant statute, that being the Industrial Relations Act 1996 and in particular the provisions of s.90. Mr Charkawi has already had redress in 2008 in relation to his termination before the Transport Appeal Boards and this Commission, however constituted, cannot review or revisit that decision. Mr Cunningham should have been mindful of the provision of s.90, but if he was not, once his attention was drawn to it by RailCorp (and again it is stressed that that happened, in writing, on no less than three occasions) he should have properly considered the implications of proceeding further, particularly in the face of a clearly stated intention on the part of the respondent, RailCorp, to seek costs. 61Unfortunately, simply because Mr Charkawi does not think he is being frivolous and vexatious and is undoubtedly serious in his concerns about his termination and its consequences, does not mean that applying the authorities outlined above, his application, to use the words of the Full Bench in Peden v Lake Macquarie ..."cannot possibly succeed, if it is manifestly groundless ...." and is frivolous on that basis for the purposes of s.181(2)(c). 62Mr Charkawi's application was also vexatious, applying the tests set out in Attorney General v Wentworth, not because Mr Charkawi the Commission considers that he instituted them with the intention of annoying or embarrassing RailCorp but because, in the words of Roden J:

Orders 1.The Commission, pursuant to s.181(2)(c) of the Industrial Relations Act 1996 orders that the applicant, Hassan Charkawi, in matter IRC11/797, shall pay the respondent's (RailCorp) costs of, and incidental to, the hearing on 23 August 2011. 2.Such costs are to be as agreed or assessed. 3.This order shall take effect on 17 October 2011, and the amount agreed or assessed shall be paid within twenty eight (28) days of this date. Elizabeth Bishop Commissioner

Amendments 18 October 2011 - Mistakenly assigned a Transport Appeal Boards citation ie NSWTAB 20 Amended paragraphs: Coversheet, Mediun Neutral Citation 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: 18 October 2011