I. Notaras v K. L. Armstrong

LEGISLATION CITED: Industrial Relations Act 1996

I. Notaras v K. L. Armstrong [2005] NSWIRComm 208 CASES CITED: Jane Morgan v The NSW Department of Education and Training IRC 2002/685, unreported, 9 March 2004 Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232

Applicant: Self-represented

LEGAL REPRESENTATIVES: Respondent: Mr M. Heath, of counsel Solicitor: McNamara James & O'Connor, Solicitors

• 9 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Application by I Notaras to extend time to appeal against a decision of Commissioner Ritchie of 13 May, 2005 No IRC 4893 of 2004.

1 In this matter Ms Kelly Armstrong ("the respondent") makes an application for costs following my decision of 17 June 2005 to refuse an application brought by Ms Irene Notaras ("the applicant") to extend time in which to appeal: I. Notaras v K. L. Armstrong [2005] NSWIRComm 208. 2 The application to extend time was brought in order to institute an appeal against a decision of Ritchie C to award monetary compensation to the respondent, a former employee of Ms Notaras, on the basis that the respondent's dismissal from employment by Ms Notaras was harsh, unjust and unreasonable. 3 Following my refusal of the application to extend time, the respondent was given the option to pursue a costs application. Written submissions seeking costs were filed on 21 June 2005. Ms Notaras, who was given twenty one days in which to forward a reply, sent a reply by facsimile on 11 July 2005. The reply was also filed in the Registry of the Commission on 13 July 2005. 4 The respondent seeks costs under s181(2)(a) and (b) of the Industrial Relations Act 1996 ("the Act") and contends that the application to extend time was either vexatious, frivolous, instituted without reasonable cause, or, a combination of all three. Relevant law 5 In Tapia v Emibarb Pty Limited trading as Lagoon Seafood Restaurant [2005] NSWIRComm 232 I dealt with an application for costs under s181(2)(a) and (b) of the Act in circumstances where a costs order was sought by the successful respondent following a decision of Glynn J to dismiss an application under s213 of the Act. 6 I made a number of observations in that decision in relation to s181(2) which also apply to the present matter (at [93] - [97]):

[93] Section 181(2) imposes strict limits on the power of the Commission to award costs: see, for example: CFMEU v Newcrest Mining [2005] NSWIRComm 129 at [7].

[94] Emibarb in the present proceedings relies on sections 181(2)(a) and (b). These provisions focus on the commencement of proceedings and permit an award for costs to be made only if specific criteria are made out, that is, if the Commission considers that the application to it was frivolous or vexatious; or, if the proceedings were instituted without reasonable cause.

[95] Sections 181(1) and 181(2) are inter-related in proceedings of the present kind. The provisions operate together when the Commission is exercising its jurisdiction not in court session. If, upon an application for costs made in the Commission not in court session, the Commission is satisfied that one or more of the sub-sections in s181(2) are made out in an applicant's favour, the provisions of s181(1) then become operative and the Commission may exercise its discretion to award costs in accordance with that section.

[96] In Bankstown City Council v Paris , the Full Bench of the Commission, in entertaining an application for costs made under s181(2)(c), said (at 219):

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 s181(1) are available for exercise. (My emphasis).

[97] Section 181(1) is expressed to be subject to the Rules of the Commission and any other Act of law. This means that although the section clearly confers a wide discretion, it is not a discretion at large if there are in existence other statutory provisions, and Rules, etc, which may impact on the section. Rule 209 of the IRC Rules is one such provision. 7 I also considered in Tapia v Emibarb a number of decisions of this jurisdiction, and other jurisdictions which have dealt with the definition of relevant terms in circumstances where costs orders were sought on the basis of what were said to be frivolous and vexatious applications and applications instituted without reasonable cause. 8 An extract of my decision which addresses those matters is reproduced below:

[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:

[118] 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 the 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. Submissions of the parties

9 Mr Heath, counsel for the respondent, presented a number of arguments in support of his submission that costs should be awarded to the respondent. In brief, Mr Heath contended:

(i) the Commission not in court session has only limited powers to award costs;

(ii) the power to award costs can be exercised against an applicant who fails in an application to extend time to appeal: Jane Morgan v NSW Department of Education and Training IRC 2002/685, unreported, 9 March 2004 per Wright J, President;

(iii) The application for extension of time was already twenty two days out of time. No draft notice of appeal was provided with the application in order to consider the merits of such an appeal nor was any ground articulated to the Court at the time the application was made. Ritchie C's reasons as published showed no discernible error;

(iv) The decision refusing leave to appeal in this matter found that Ms Notaras did not provide a "satisfactory explanation" for the delay in filing the application;

(v) There was no justifiable excuse for not obeying the court rules to extend time. There was no draft appeal provided to enable consideration of the merits of an appeal nor was there any evidence deposing to the excuses sought to be made. The conclusions to be drawn from those matters are that the application to extend time on its face was not going to succeed (notwithstanding opportunities for Ms Notaras to provide further explanation during the application itself); and, it was manifestly groundless;

(vi) for reasons explained in (iii), (iv) and (v) above, the application to extend time was bound to fail;

(vii) there are no "special circumstances" existing here which might otherwise warrant a costs order not being made: Jane Morgan v NSW Department of Education and Training. 10 Ms Notaras in written submissions sought an order that each party pay their own costs of the application to extend time. In support of this proposal, Ms Notaras relied on the following matters:

(i) the application to extend time was based on her belief that Ritchie C erred in his decision;

(ii) she represented herself on the application, and was unfamiliar with the procedures or legal principles for lodging and presenting such applications. She was also fortified in deciding to represent herself, by unidentified persons from the registry of the Commission who, she said, informed her that a number of self represented litigants on appeal, "represented themselves quite satisfactorily";

(iii) an unidentified "legal officer" in the Commission registry advised her that each party would pay its costs;

(iv) she did not act for any frivolous or vexatious reason, but genuinely believed her application had merit;

(v) her actions in relation to the application to extend time were taken on the basis of advice given by persons from the Industrial Relations Commission. 11 Ms Notaras also provided in her written submissions, detailed reasons as to why, in her view, Ritchie C erred in his decision. Consideration

12 In refusing Ms Notaras' application to extend time I made a number of findings. Ms Notaras, I found, had not been forthcoming with a reasonable explanation for the delay in filing a notice of appeal, which at the time the application to extend time was heard, had not been filed. The applicant had also relied on her lack of familiarity with the prevailing practices and procedures, and, the fact that she was self-represented, to explain the delay. She also contended that a notice of appeal had not been filed because she had a business to run which placed demands on her time. None of these explanations I found were acceptable to explain the delay. 13 Neither did Ms Notaras point to any injustice which might otherwise arise if her application were not granted. When asked to comment on whether the respondent might suffer prejudice if the application were granted, Ms Notaras said that she did not think the respondent would suffer any prejudice. 14 Ms Notaras also provided no material upon which the Commission could make any meaningful assessment of the prospects of success of an appeal if the application were granted. 15 All of these matters lead me to conclude that the application to extend time had no chance of success and was manifestly groundless. This brings the application for costs within s181(2)(a). In my view, the application was both frivolous and vexatious on the objective test for vexatiousness. 16 This finding opens the jurisdictional gateway for the operation of s181(1) and requires me to consider whether I should exercise my discretion to award costs under that section. 17 In Jane Morgan v NSW Department of Education and Training, Wright J, President, found "special circumstances" existed which rendered it inappropriate to make a costs order in the matter. A key ingredient of those circumstances in his Honour's view was the fact that Ms Morgan, an unrepresented litigant, was not on notice of the possibility that she may face a costs order. 18 In the present matter it was apparent to me during the application to extend time proceedings that Ms Notaras had little, if any, appreciation of the practices and procedures of this Commission, or court practices in general, and little understanding of the legal and evidentiary principles involved in presenting her application. These facts alone would not preclude the making of a costs order against Ms Notaras. There is no right to legal representation recognised in this jurisdiction, and, there is an obligation on any litigant to make enquires as to the implications of any proceedings they might commence or carry on: Jane Morgan v NSW Department of Education and Training at p5. 19 The same key ingredient however, which significantly persuaded Wright J not to award costs in the exercise of his Honour's discretion, is also present here, namely the fact that Ms Notaras was not aware that a costs order could be made against her. 20 The respondent submitted on the costs application that in the absence of a costs order against the applicant, the compensation order made by Ritchie C would be, "unnecessarily depleted". In addition, the respondent argued that she resides outside of Sydney and therefore had no choice but to expend money engaging counsel to prepare the matter and appear in Sydney on her behalf to meet what was ultimately a "doomed application". 21 All of these matters I take into account in the exercise of my discretion not to make an order for costs against Ms Notaras. I am particularly persuaded by the fact that Ms Notaras was not on notice that a costs order could be made against her in the event of an unsuccessful application. Order 22 I make the following order:

The respondent's application for costs is dismissed. 23 The proceedings are concluded. ooo000ooo

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