Francis v Ladehai Pty Ltd

JUDGMENT: - 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: Boland J Date: 7 February, 2003

BRUCE FRANCIS v LADEHAI PTY LTD T/as NORTH STAR HOLIDAY RESORT AND ANOR

Application by Bruce Francis for leave to appeal and appeal against a decision of Deputy President Harrison given on 20.12.02 in matter no. IRC 1191 of 2002 JUDGMENT

1 Fairweather v Ladehai Pty Ltd t/as North Star Holiday Resort [2002] NSWIRComm 367 concerned an application by Vivienne Fairweather under s 84 of the Industrial Relations Act 1996 in respect of her alleged unfair dismissal. In those proceedings, Bruce Colin Francis appeared as agent for Ms Fairweather. In that case Harrison DP found that the proceedings were frivolous and vexatious and had been agitated without reasonable cause. He ordered costs against Mr Francis pursuant to s 182 of the Act and r 209 of the Industrial Relations Commission Rules 1996 in an amount as agree between the parties or as taxed by the Registrar. The relevant order was in the following terms: Pursuant to s 182 Rule 209 of the Commission's Rules, Mr Bruce Francis is ordered to pay costs incurred by Ladehai Pty Ltd t/as North Star Holiday Resort in these proceedings to an amount agreed, or as taxed by the Industrial Registrar.

2 Mr Francis has appealed the decision of Harrison DP and has sought a stay because "the enforcement of the order made by his Honour (Harrison DP) which is under appeal will be financially crippling and will denude the Appellant of the resources necessary to prosecute the appeal. The costs have been estimated as being in the order of $80,000."

3 Mr I Latham of counsel appeared for the appellant. An affidavit of Mr Francis was tendered providing information about his financial circumstances and the "financially crippling" effect of the costs order if it were to be enforced. Mr Latham referred to a number of cases dealing with the principles governing the grant or refusal of a stay application. These were Water Industry Salaried Officers' Union v Professional Officers' Association (NSW) (1987) 22 IR 178, Professional Officers' Association of New South Wales v New South Wales Teachers' Federation (1993) 50 IR 404, Re Transport Industry-Waste Collection and Recycling (State) Award (2000) 102 IR 192 and Campbells Cash and Carry Pty Limited v National Union of Workers, New South Wales Branch (2001) 104 IR 400. In particular reference was made to the judgment of Wright J, President in Re Transport Industry-Waste Collection and Recycling (State) Award where his Honour said at par [19]: 19 I consider that the following considerations derived from the discussion in the Cambridge Credit case are those relevant to apply in this matter:

(1) The mere filing of an appeal will not of itself provide a reason or demonstrate an appropriate case nor will it discharge the onus which the applicant bears. (2) A court has an appropriate discretion whether or not to grant the stay and as to the terms that would be fair if a stay be granted. (3) The onus is upon the applicant for a stay to demonstrate a proper basis for a stay that will be fair to all the parties.

(4) In the exercise of its discretion all considerations including the balance of convenience and the competing rights of the parties need to be considered and weighed.

(5) Where there is a risk that the appeal will prove abortive or nugatory if the stay is not granted then the normal exercise of discretion will result in the grant of a stay.

(6) Although, generally speaking, it is inappropriate in relation to an application for a stay to speculate as to the appellant's prospects of success, this does not prevent a court, in the context of considering the specific terms of the stay that will appropriately and fairly adjust the interests of the parties, from making a preliminary assessment as to whether the appellant has an arguable case.

4 In seeking the stay, however, Mr Latham relied principally on the contention that Harrison DP, sitting as the Commission and not the Commission in Court Session, had no power to order costs against the appellant. Mr Latham referred to the terms of s 181(1) and (2) of the Act which provide: (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 6 of Part 11 of the Legal Profession Act 1987 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 (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.

5 Reference was also made to r 209 of the Commission's Rules which is in the following terms: 209. Barrister or solicitor or agent to repay costs due to delay, misconduct etc (1) Where costs are incurred improperly or without reasonable cause, or are wasted by undue delay or by any other misconduct or default, and it appears to the Commission that a barrister, solicitor or agent is responsible, the Commission may, after giving the barrister, solicitor or agent a reasonable opportunity to be heard: (a) disallow the costs as between the solicitor or agent and the solicitor's or the agent's client, (b) disallow the costs as between the barrister and that barrister's instructing solicitor or as between the barrister and the client, (c) direct the barrister, solicitor or agent to repay to the client costs which the client has been ordered to pay to any other party, (d) direct the barrister, solicitor or agent to indemnify any party other than the client against costs payable by the party indemnified. (2) Without limiting the generality of subrule (1), a barrister, solicitor or agent is responsible for default for the purposes of that subrule where any proceedings cannot conveniently proceed, or fail or are adjourned without useful progress being made, because of the failure of the barrister, solicitor or agent: (a) to attend in person or by a proper representative, (b) to file any document which ought to have been filed, (c) to deliver any document which ought to have been delivered for the use of the Commission, (d) to be prepared with any proper evidence or account, or (e) otherwise to proceed. (3) The Commission may, before making an order under subrule (1), refer the matter to the Registrar for enquiry and report. (4) The Commission may order that notice of any proceedings or order under this Rule must be given to the client in such manner as may be specified in the order under this subrule. (5) The term solicitor in this Rule includes the solicitor's agent.

6 Mr Latham submitted that neither under s 181 nor r 209 was the Commission as constituted by Harrison DP empowered to make an order for costs in the terms that he did. It was further submitted that in any event, the appellant was not provided with a reasonable opportunity to be heard on the question of costs and was, therefore, denied natural justice.

7 As to balance of convenience it was contended that it favoured the appellant because if the costs order were to be enforced the appellant would be required to sell his house. On the other hand, if the appeal was denied the respondent would likely be entitled to costs orders in its favour in relation to the appeal and at first instance.

8 Mr B Cross of counsel appeared for the respondent. His submissions may be summarised as follows:

· The onus is on the applicant to demonstrate there is a proper basis upon which to grant the stay that would be fair to all of the parties;

· If the appellant only has finite resources and the stay is granted there is the prospect of any judgment in favour of the respondent not being satisfied;

· The appellant in the proceedings below was given a reasonable opportunity to be heard on the question of costs;

· On 27 November 2002 the appellant filed an application for declaration in relation to the costs order made by Harrison DP seeking orders including an order that Harrison DP did not have the power to make the costs order and an order that he was entitled to appeal pursuant to s 187 of the Act against the costs order. In the grounds and reasons supporting the application the appellant acknowledged s 187 of the Act only allows a party to proceedings to appeal against a decision of the Commission. The appellant was not a party to the proceedings before Harrison DP;

10 Whilst the assessment by the Commission as to the prospects of success of any appeal must necessarily be preliminary the appellant faces what may be a formidable obstacle in that it is contended by the respondent that he was not a party to the proceedings before Harrison DP. On the face of it, therefore, the appellant has no standing under s 187 of the Act to bring the appeal. Accordingly, the appellant's prospect of success could be described as slim.

11 On the other hand, it cannot be entirely ruled out that by giving Mr Francis an opportunity to respond to an application for costs against him (see pars [34] and [35] of the decision of Harrison DP) that his Honour placed Mr Francis in the position of being a party to the proceedings albeit only for a limited purpose.

12 Another consideration going to the appellant's chances of success is that whilst the appellant contended that the costs order made by Harrison DP was beyond power, it does seem to me that there is scope to argue that in ordering Mr Francis to "pay costs incurred by Ladehai Pty Ltd t/as North Star Holiday Resort in these proceedings …", what the Deputy President meant to do was order that Mr Francis repay to his client costs which the client had been ordered to pay to the respondent. Harrison DP obviously had regard to both s 181 and r 209 in deciding to order costs and in fact referred to these provisions in making his order.

13 In the context of dismissing Ms Fairweather's application on the grounds it was frivolous and vexatious it was open to his Honour under s 181(2)(a) of the Act to award costs against Ms Fairweather and then under r 209(1)(c) order Mr Francis to repay to Ms Fairweather the costs she had been ordered to pay to the respondent. This may have been what his Honour intended but which did not find clear expression in the terms of his order.

14 All in all the appellant's prospects of success on appeal do not look good but there are other considerations. The appellant's evidence about his financial state was that he would be financially crippled if the costs order was enforced and that he doubted that he would be able to afford to continue the appeal without selling his house. The appellant was not cross examined on his affidavit.

15 In the circumstances, I propose to grant the stay of order 2 of the orders made by Harrison DP on 20 December 2002 on the condition that the appellant will pay one third of the costs ordered by Harrison DP in an amount as agreed or, failing agreement, as assessed by the Registrar. The remainder of the costs at first instance is a matter to be determined on appeal. I so order.

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