Favre v Commissioner of Police

Respondent/Cost Applicant Case

The respondent relied upon ss 181(2)(a) and (c) of the IR Act in support of prayer 2 and 4, and in oral submissions. The relevant provisions are in the following terms: (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 (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 ...
By reference to the Full Bench decision in Bankstown City Council v Paris (1999) 93 IR 209 at 219 ("Bankstown"), the respondent made the following submission as to the approach to be taken by the Commission in relation to the Application: 4.1 In respect of costs under s 181 of the IR Act, the Commission is required to take a two stage approach. The first stage is to determine whether one of the 'gateway' provisions ins 181(2) of the JR Act is met, and the second involves the exercise of the Commission's discretion in respect of whether costs should be awarded. 4.2 The Commission can be satisfied that the requirement contained in s 181(2)(c) of the IR Act has been met. That 'gateway' can be met in circumstances where: (a) 'there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party'; or (b) 'the course of conduct of [a] party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable.'
The respondents firstly submitted, that the necessary gateway for the Commission to exercise the discretion under s 181 was opened both in the applicant's failure to agree with a reasonable offer and the applicant's conduct was inconsistent with an intention to settle the case on any reasonable basis.
In oral submissions, the applicant also added that the bringing of the claim was frivolous and vexatious.
Dealing firstly with the Offers, the respondent contended that they were reasonable given the decisions in Southcombe and Welch which determined that the Direction was both lawful and reasonable. It was further advanced in oral submissions that acceptance of any of the Offers would assuage the applicant's expressed and submitted concern of clearing his name and the finding that his conduct constituted a criminal offence.
As to the second gateway, the respondent put that evidence of the applicant's intention of not being willing on settling on a reasonable basis is evidenced by the following conduct: 1. On 19 December 2022, the Costs Respondent sought provision of a deed of release giving effect to the Offer and an extension of time in which to consider the Offer, but upon being provided with a draft deed of release and extension of time in respect of the Offer, providing no response; 2. The Costs Respondent failed to respond to the 31 January 2023 letter reinstating the Offer following the Welch Decision; 3. Notwithstanding repeated correspondence regarding decisions dealing with the Vaccine Requirement, continuing to prosecute the Review Application, including pursuing the Summons and making additional requests for documents; and 4. Between 31 January 2023 and the Decision being issued, the Costs Respondent made no offers to resolve the matter on any basis.
As to frivolous and vexatious, the respondent made the following submissions: So to effectively just summarise and wrap things up, what we say is that having regard to the manifest weakness of the arguments that Mr Favre put, even at the time when he filed his application, having regard to the Fair Work Commission decisions that were available at that time, having regard to the fact that his submissions were contrary to his own evidence, all of these factors pointed to, or we say, point to the application being frivolous and/or vexatious. We say that in particular the vexation can be established by the huge summons that was subsequently issued and the weak arguments that the applicant put at the substantive hearing which suggest an intention to annoy or embarrass the Commissioner of Police to use the language in Wentworth. Or otherwise were brought for a collateral purpose or oppressive and were obviously untenable or manifestly groundless.
Having submitted that the gateway was opened, the respondent pointed to the following matters as to why the Commission should exercise its' discretion to make the orders: 1. the Costs Applicant offered to resolve the Review Application on a reasonable basis, on multiple occasions; 2. the Costs Applicant put the Costs Respondent on notice of the authorities that stood against the arguments he intended to pursue in the Review Application; 3. the Costs Applicant was put to significant expense in defending the Review Application due to the various requests for documents (by way of the Summons and otherwise) which were ultimately not relied upon at hearing of the Review Application; 4. extensive correspondence flowed between the parties which led to greater costs being incurred by the Costs Applicant than ought to have been necessary in proceedings of this nature; 5. the Costs Applicant only seeks a small proportion of her overall costs be paid by the Costs Respondent, being a sum of $15,000, as against total legal costs incurred in the sum of $113,725.47 (or around 13% of the Costs Applicant's total legal costs); and 6. the Costs Applicant has approached the Review Application reasonably in all of the circumstances.

Consideration

As identified by the respondent, the approach to an application for costs under s181(2)(c) is as stated in Bankstown. That approach was stated by the full bench at 219 and it is appropriate to set that passage out in full: Construing the relevant part of s 181(2)(c) in its overall statutory context, we conclude that the evident purpose of the provision is to encourage the settlement of proceedings to which it applies. The criterion set out in the provision is to be applied objectively and requires a consideration of the whole of the conduct of the party against whom the order is sought, or some discrete part of that party's conduct, with a view to ascertaining whether it unreasonably failed to agree to a settlement of the claim. We also consider that on the proper construction of the provision, an affirmative conclusion may be reached on at least two bases. First, where there was a proposal put by a party which could be described as a reasonable settlement of the claim and that was not agreed by the other party. The second situation in which the criterion could be satisfied is where the course of conduct of the party over a relevant period could be said to amount to conduct inconsistent with an intention to settle the proceedings on any basis that could be considered reasonable. We emphasise that, although the legislature has clearly intended that there be strict limits on the power of the Commission to award costs in unfair dismissal proceedings, the legislature has also evinced a clear intention that costs orders be available in circumstances where there has been a failure on the part of a party to properly conciliate proceedings to the extent that they have failed reasonably to facilitate a potential settlement of them. Further, the Commission is obliged to consider all relevant circumstances in deciding whether such failure has occurred. Once the statutory criterion has been met, the Commission's broad powers and discretions under s 181(1) are available for exercise.
In Phillips v Industrial Relations Commission (NSW) (2006) 154 IR 96 Mason P, with whom Spigelman CJ and Beazley JA agreed, stated that the proper test under s 181 (2)(c) required the Court to consider the response of the reasonable person.
Dealing firstly with whether the rejection of any of the Offers could be considered unreasonable, Boland J in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (on behalf of Rosanna Ganino) v Roads and Maritime Services (No 9) [2014] NSWIRComm 31 ("Ganino") , Boland J adopted the Victorian Court of Appeal's summary of the principles and factors to be considered when assessing whether a rejection of an offer of settlement is unreasonable in Hazeldene's Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) [2005] VSCA 298; 13 VR 435 at [23]- [25]: The test of unreasonable rejection [23] In our view, these competing considerations can be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as "manifestly" or "plainly" unreasonable. [24] Of course, deciding whether conduct is "reasonable" or "unreasonable" will always involve matters of judgment and impression. These are questions about which different judges might properly arrive at different conclusions. As Gleeson, C.J. said recently, "unreasonableness is a protean concept". But a test of reasonableness is, we think, entirely appropriate to the exercise of a discretion such as this. Factors relevant to assessing reasonableness [25] The discretion with respect to costs must, like every other discretion, be exercised taking into account all relevant considerations and ignoring all irrelevant considerations. It is neither possible nor desirable to give an exhaustive list of relevant circumstances. At the same time, a court considering a submission that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters: (a) the stage of the proceeding at which the offer was received; (b) the time allowed to the offeree to consider the offer; (c) the extent of the compromise offered; (d) the offeree's prospects of success, assessed as at the date of the offer; (e) the clarity with which the terms of the offer were expressed; (f) whether the offer foreshadowed an application for an indemnity costs order in the event of the offeree's rejecting it. (Footnotes omitted.)
Turning to the second gateway, being whether the applicant engaged in conduct which was inconsistent with an intention to settle; In Colefax v Secretary, Department of Education (No 4) [2019] NSWIRComm 1017 [11] that the obligation imposed on parties is "to undertake a responsible and careful assessment of the prospects of the litigation".
For the following reasons, I am not satisfied that either of the two gateways identified in Bankstown has been satisfied: 1. The Offers were made at a stage of the proceedings at which point the Summons had not been complied with. This is not in `small part due to the actions of the Respondent in taking three months to put on the motion to set aside the Summons and seeking an extraordinary amount for conduct monies. 2. It is also evident that the applicant was of the opinion that the respondent had not complied with the Summons by the time that the hearing commenced. 3. Although there were a number of decisions concerning the Order and COVID vaccination policies in general, at the time the Third Offer expired there was not any binding authority with respect to the Order, nor had there had been at the time of the Decision. 4. Regarding the level of the respondent's compromise, it is difficult to see how there was any meaningful compromise by the respondent when the outcome of acceptance would have resulted in the applicant never returning to any role within the Force after a thirteen plus year career without any compensation.
In relation to frivolous in Peden v Lake Macquarie Refrigeration Pty Ltd [2004] NSWIRComm 66 the Full Bench stated that proceedings would be regarded as "frivolous" if "on its face, it cannot possibly succeed, if it is manifestly groundless or if it is a paltry or trifling matter". There was no evidence presented to the Commission that the proceedings were a paltry or trifling matter such as to meet the jurisdictional gateway of "frivolous".
As to vexatious, Roden J in Attorney General v Wentworth (1988) 14 NSWLR 481 per at 491 identified the following definition: 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 respondent has not made a case out that the application was frivolous or vexatious.
Firstly, I do not accept the respondent's submission that that at the time the Application was filed that it was clear on its' face that it would not succeed. At the time the Application was filed, there had not been any first instance decision, let alone any decision or judgement at any level concerning the direction.
Similarly, it cannot be said that the Application seeking reinstatement to the Force following the Order is a paltry or trifling matter.
Finally, there is no basis upon which I could I find that the Application was brought for a collateral purpose, the allegation that the Summons was an example of this can not stand. Albeit parts of the Summons were dismissed by the Registrar, many others were not.
For the above reasons, the application for costs under s 181 of the Industrial Relations Act 1996 is dismissed.

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