Hamberger (Employment Advocate) v Williamson & Construction, Forestry, Mining and Energy Union

REASONS FOR JUDGMENT 1 On 23 November 2000, the Court delivered its reasons for judgment in Hamberger (Employment Advocate) v Williamson and Construction, Forestry, Mining and Energy Union [2000] FCA 1644. The application of the applicant, Mr Hamberger, which alleged two contraventions of s298P(3) of the Workplace Relations Act 1996 (Cth) ("the Act"), was dismissed. These reasons should be read together with the Court's reasons in Hamberger. 2 The first contravention was dismissed because there was no evidence that if a relevant threat had been made, it had been communicated to its alleged target. The second contravention was dismissed because the Court excluded certain evidence pursuant to s138 of the Evidence Act 1995 (Cth). The excluded evidence consisted of a tape recording and the transcript of it. By dealing with the alleged second contravention in this way it was not necessary for the Court to consider the effect of the tape recording vis-ŕ-vis any breach of s298P(3) of the Act insofar as it concerned persons other than Mr Lyten. 3 By Notice of Motion dated 30 November 2000, the respondents applied for a costs order against Mr Hamberger, Mr John Lyten and Mr Lee Carson. The motion was heard on 11 December 2000. Mr Herman Borenstein, of counsel, appeared for the respondents. Mr Justin Bourke, of counsel, appeared for Mr Hamberger and also for Messrs Lyten and Carson.

Mr Hamberger 4 Pursuant to s347(1) of the Act, costs will only be awarded against Mr Hamberger if it can be shown that he "instituted the proceeding vexatiously or without reasonable cause". 5 In Thompson v Hodder (1989) 21 FCR 467, after reviewing some relevant authorities, a Full Court of this Court said (at 470): "It is apparent from these authorities that an applicant who has the benefit of the protection of s 347 will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances." 6 The test for determining whether a proceeding has been instituted without reasonable cause was examined by Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 where his Honour said (at 264 to 265): "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. That is the situation in the present case. The qualification of s 347 applies. The Court has power to order costs against the applicant." 7 Assuming the first contravention alleged by Mr Hamberger to be an unsustainable one, the question arises whether the second alleged contravention had no substantial prospect of success at the time the proceeding was instituted. 8 The second contravention was dismissed after the exclusion of pivotal evidence upon which it was based. It could not have been known at the time the proceeding was instituted that the Court would exercise its discretion under the Evidence Act to refuse to admit the excluded evidence. Much depended on the way the case proceeded and how the relevant witnesses dealt with questions when being cross-examined. 9 However, Mr Borenstein contended that the second contravention was always doomed to fail having regard to Mr Lyten not being an employee of Mr Carson's company. Mr Bourke submitted that if the excluded evidence had been admitted it would have disclosed a breach of s298P of the Act in respect of persons other than Mr Lyten. While there is no point in now determining what is a moot issue, it suffices to say that Mr Bourke's contention in that respect is not an unarguable one. 10 Accordingly, I do not consider that when this proceeding was instituted it could be described as one which had no substantial prospect of success. In my view, the success of the second alleged contravention depended upon the resolution in Mr Hamberger's favour of arguable points of law including the largely "unchartered waters" of the impact of s138 of the Evidence Act. I do not consider that the proceeding fits the "exceptional" description, referred to in Thompson, as being one which was instituted "without reasonable cause". 11 Mr Borenstein also submitted that the proceeding was instituted vexatiously. As North J said in Nilsen v Loyal Orange Trust (1997) 76 IR 180 (at 181): "A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage … ." 12 Mr Borenstein relied on certain observations at [22] in Hamberger in which the Court effectively made comments critical of Mr Hanley for not foreseeing the possibility of Mr Lyten secretly taping a conversation with the first respondent. Further reliance was placed on Mr Hanley's alleged lack of concern over the true employment status of Mr Lyten and the applicant's failure to make full disclosure at an interlocutory hearing. 13 A proceeding cannot be said to have been instituted vexatiously by reference to conduct which occurred after it was instituted. The failure to make full disclosure at an interlocutory hearing can only be confirmatory of other evidence that the proceeding was instituted vexatiously, if that other evidence exists. I do not believe that it does exist. Mr Hanley's failure to find out Mr Lyten's true employment status is not evidence of an intention to harass or embarrass the respondents. It was evidence of Mr Hanley being misled by Mr Lyten. Further, Mr Hanley's failure to perceive what Mr Lyten may have done with respect to the tape recording, whilst regrettable, is not so reprehensible as to amount to vexation. 14 In my opinion, the applicant did not institute the proceeding vexatiously. Accordingly, s347(1) of the Act operates to prevent the Court from making any costs order against Mr Hamberger.