Cretney v Director General, New South Wales Department of Education and Training

LEGISLATION CITED: Industrial Relations Act 1996

CASES CITED: Cretney v Director General, New South Wales Department of Education and Training (No 2) [2009] NSWIRComm 107 Patricia Cretney v State of New South Wales [2008] NSWIRComm 181

Ms C M Howell of counsel (Appellant/Respondent on the motion) Turner Freeman Lawyers LEGAL REPRESENTATIVES: Ms K T Nomchong of counsel (Respondent/Applicant on the motion) Hicksons Lawyers

JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH

CORAM: BOLAND J, President WALTON J, Vice-President BACKMAN J

PATRICIA CRETNEY v DIRECTOR GENERAL NEW SOUTH WALES DEPARTMENT OF EDUCATION AND TRAINING

Application by Patricia Cretney for leave to appeal and appeal against a judgment of Justice Kavanagh given on 6.8.2008 in Patricia Cretney v State of New South Wales [2008] NSWIRComm 131

1 The Full Bench delivered judgment in this matter on 15 July 2009: Cretney v Director General, New South Wales Department of Education and Training (No 2) [2009] NSWIRComm 107. In upholding the appeal, the Court made the following orders: … (4) The Full Bench declares that the contract as pleaded in the appellant's second further amended summons was unfair in that it denied the appellant procedural fairness and in doing so operated so as to permit: (i) the respondent to make Recommendations and findings adverse to the appellant and publish adverse findings without a proper foundation for doing so, (ii) the respondent to avoid its obligation to protect the appellant's professional integrity. (5) The contract is varied, ab initio, to provide that the appellant shall be accorded procedural fairness in any management Review or disciplinary process to which she is subjected and that the respondent shall protect the appellant's professional integrity in accordance with the School Development Policy. (6) In connection with the varied contract, the respondent shall pay to the appellant the sum of $2500. (7) The respondent shall pay the appellant's costs of both the proceedings at first instance and on appeal as agreed or assessed. 2 Order (7) concerned the costs of the appeal and first instance proceedings. This judgment deals with a notice of motion filed by the respondent on 12 August 2009. The motion sought the following: 1. Leave be granted for the Respondent to be heard on the issue of costs.

2. An order that each party pay its own costs of the proceedings (being the appeal and the hearing below).

3. Such further or other order as the Court may deem fit. Respondent/applicant on the motion

3 The respondent provided written submissions to the Court outlining its case that it should be granted leave to be heard on the question of costs. Counsel for the respondent, Ms K Nomchong, presented the respondent's case on the motion primarily on the basis that it had been denied natural justice and substantive fairness in relation to the nature and extent of the costs order made by the Court on 15 July 2009. The respondent submitted that it should be heard on the substantive issues associated with the making of a costs order: There were clear indications that the usual costs orders may be displaced particularly when the following factors characterised the substantive Decision of the Full Bench: (i) the Appellant was not wholly successful in her substantive claim in that she succeeded on only one of her seven claims for variation of the contract as sought in clause 3 of the Second Further Amended Summons for Relief;

(ii) the Appellant failed in her predominant claim for defamation damages in the amount of $50,000: see Part D of the Second Further Amended Summons for Relief;

(iii) extremely modest compensation was awarded for "stress and suffering" in relation to the variation to the contract ordered by the Full Bench, as compared to the $50,000 sought by the Appellant for "Pain, suffering, anxiety, hurt, humiliation and distress" such that it would be arguable that the Appellant received only "peppercorn damages". 4 The respondent referred to s 181 of the Industrial Relations Act 1996 ('the Act') in submitting that this Court has a discretionary power to award costs. Section 181 of the Act provides:

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. … 5 Further, the Court may deal with the issue of costs at any point in the proceedings. The Industrial Relations Commission Rules 1996 ('the Rules') provide:

203 Time for dealing with costs (1) The Commission may in any proceedings exercise its powers and discretions as to costs at any stage of the proceedings or after the conclusion of the proceedings. (2) Where the Commission makes an order in any proceedings for the payment of costs the Commission may require that the costs be paid forthwith notwithstanding that the proceedings are not concluded. 6 It was submitted that whilst the general rule is that costs follow the event, this Court has a discretion to depart from the general rule. Ms Nomchong submitted that the Court should be minded to depart from the general rule in the present circumstances. 7 In its submissions in reply, the respondent stated:

Further, this is not a matter in which the quantum of the costs order is immaterial. This is a matter in which proceedings were commenced in 2003 and have been the subject of several interlocutory applications. There was a lengthy hearing at first instance, delayed or elongated in some part by the Applicant's attempt to amend her pleadings during the trial. The appeal was also a complex matter requiring a good deal of preparation. As such, the costs associated with this matter will far outweigh the modest compensatory order made in favour of the Appellant. In circumstances where the Appellant did not succeed on her primary claim of having the Court determine that the statements and conclusions in the Management Review Report were "false, inaccurate and defamatory" and did not succeed on having the Report withdrawn, corrected or qualified or have any apology issued (as set out in the pleadings) and where the Applicant succeeded only in relation to the procedural fairness issue associated with the school newsletter (being only one of the many matters on which the Review relied), the Appellant ought not be entitled to a full costs order.

8 Counsel for the appellant, Ms C Howell, opposed any change to the costs order of the Full Bench: Contrary to the respondent's submission, there is nothing unusual about the circumstances of the appeal that should have alerted the Commission to the respondent's unarticulated desire to be heard on costs. It was not " apparent " that the present was not a clear-cut case in which the ordinary rule would not apply. The matters set out in paragraph 5 of the respondent's submissions do not demonstrate any basis for a departure from the usual rule as to costs. At their highest, they indicate that Ms Cretney was not successful on all grounds. This is not of itself sufficient grounds for a departure from the usual order as to costs (See for example Cretazzo v Lombardi (1975) 13 SASR 4). There is nothing unusual about the fact that an appellant did not succeed on every single appeal ground raised.

Even if it could overcome the difficulties referred to above, the respondent has identified no proper basis on which the usual order for costs might be departed from so as to make a grant of leave appropriate. Accordingly leave would not be granted.

The general principles are discussed in the judgment of Toohey J in Kimberley John Hughes v Western Australian Cricket Association (Inc) and Ors (1986) ATPR 48, subject to the qualifications in Cretazzo v Lombardi (1975) 13 SASR 4. Whilst there is discretion to depart from the usual order as to costs, it will be sparingly exercised. In GT Corporation Pty Ltd v Amare Safety Pty Ltd Robson J said: I adopt, with respect, the observations made by Jacobs J in Cretazzo v Lombardi , as to the undesirability of a successful litigant being deprived of portion of its costs merely because it did not succeed on all of the grounds or issues which are canvassed in the hearing before the Court. His Honour's observations have particular force where it is the State which is the unsuccessful party and which has been held to have acted unfairly towards a citizen, whether individual or corporate. (emphasis in original, citations omitted)

Ordinarily, as the respondent concedes, costs will follow the event and a successful litigant receives her costs in the absence of special circumstances justifying some other order. The respondent has pointed to no special circumstances in the present matter. This is particularly the case having regard to the costs generated by the respondent's failed jurisdictional arguments both at first instance and on appeal.

9 At first instance, the trial judge gave 'leave to relist as to costs'. The respondent sought costs on a party/party basis up to July 2004, and thereafter on an indemnity basis. The applicant rejected that claim. Her Honour ordered the applicant to pay to the respondent its costs on a party/party basis in Patricia Cretney v State of New South Wales [2008] NSWIRComm 181. On appeal, the Full Bench ordered the respondent to pay the appellant's costs of both the proceedings at first instance and on appeal as agreed or assessed. 10 In its amended application for leave to appeal and appeal the appellant sought, as part of the relief claimed, that the respondent pay the appellant's costs at first instance and on appeal as agreed or assessed. In its written submissions on appeal the appellant submitted: In the event that Ms Cretney is successful on any ground of appeal, she seeks the opportunity to make submissions on appropriate costs orders. 11 Ms Cretney was successful on the appeal, yet she was not given the opportunity sought to make submissions on appropriate costs orders. Ms Cretney no longer seeks that opportunity, unsurprisingly, because costs were awarded in her favour. However, if the Full Bench had provided the opportunity for the appellant to be heard on costs the respondent would also have been heard. 12 Through inadvertence, the parties were not heard on costs. They should now be given that opportunity, although we signal some reservations about the strength of the respondent's contentions that go to the merits of its case regarding costs.

13 Leave is granted to the parties to be heard on the question of costs at first instance and on appeal. This will be done by the filing and service of written submissions and the matter will be dealt with on the papers. Orders

14 The Full Bench makes the following orders: (1) Leave is granted to the respondent to file and serve written submissions on the question of costs within 10 days of the date of this judgment. (2) The appellant shall have a further 10 days to file and serve written submissions in response. (3) The respondent shall have five days to file and serve reply submissions. (4) The issue of costs will be dealt with on the papers. ___________________________________

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