Kelsey v Logan City Council & Ors

Industrial Relations Act 1999 (Qld) (repealed), s 326

Public Interest Disclosure Act 2010 (Qld), s 3, 13, 17, 40, 48

Local Government Act 2009 (Qld), s 11, s 12, s 13, s 162, s 170

Crime and Corruption Act 2001 (Qld), s 38

Corporations Act 2001 (Cth), Part 9.4AAA

Civil Aviation Act 1988 (Cth)

Privacy Act 1988 (Cth)

Constitution of Queensland 2001 (Qld), s 70

Fair Work Act 2009 (Cth)

Civil Aviation Regulations 1988 (Cth) r 51,

(Dissolution of Logan City First Respondent) Amendment Regulation 2019 (Qld)

Local Government Regulation 2012 (Qld),

Industrial Relations (Tribunals) Rules 2011 (Qld), r 70

Austin v Honeywell Ltd (2013) 277 FLR 372; [2013] FCCA 662

Australian Building and Construction Commissioner v Parker [2017] FCA 564; (2017) 266 IR 340; [20217] FCA 564

Australian Licenced Aircraft Engineers Association v Sunstate Airlines (Qld) Pty Ltd (2012) 208 FCR 386; [2012] FCA 1222

Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; (2012) 86 ALJR 1044; 220 IR 445; 290 ALR 647; [2012] HCA 32

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336

Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273; [2015] FCAFC 157

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; [2014] HCA 41

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50

Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd

(No 2) [2017] FCA 1046

Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150; [2015] FCAFC 76

Crump v Equine Nutrition Systems Pty Ltd Trading as Horsepower (No 2) [2007] NSWSC 25

Curwen & Ors v Vanbreck Pty Ltd (2009) 26 VR 335; [2009] VSCA 284

Degiorgio v Dunn (No 2) [2005] NSWSC 3; (2005) 62 NSWLR 284

Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833

Federal Commissioner of Taxation v Whitfords Beach Pty Ltd [1982] HCA 8; (1982) 150 CLR 355

General Motors-Holden's Pty Ltd v Bowling (1976) 12 ALR 605; 51 ALJR 235

Hanley v AMWU [2000] FCA 1188; (2000) 100 FCR 530

Kelsey v Logan City Council and Another [2018] QIRC 9

Kelsey v Logan City Council & Ors (No 7) [2019] QIRC 085

Kelsey v Logan City Council & Ors (No 8) [2019] QIRC 114

Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs [2018] QSC 96

_Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Lt_d [2017] VSCA 88

McDonnell v McDonnell [1977] 1 WLR 34

Morris v McEwan [2005] SASC 284; (2005) 92 SASR 281

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and others (1992) 110 CLR 445; [1992] HCA 66

Newmont Pajingo Pty Ltd v Tomac Enterprise Pty Ltd (No. 2) [2005] ICQ 23

Otto v Boxgrove Pastoral Co Pty Ltd (No. 2) [2002] ICQ 45

Seven Network Ltd v News Ltd [2007] FCA 1489

SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323

Smith v Kelsey & Ors; Dalley & Ors v Kelsey & Ors [2020] QCA 55

Stipanov v Mier (No 2) [2006] VSC 424

Tattsbet v Morrow [2015] FCAFC 62; (2015) 233 FCR 46

Tesco Ltd v Nattrass [1971] UKHL 1; [1972] AC 153

Environmental Group Ltd v Bowd [2019] FCA 951; (2019) 288 IR 396

Trustees of the Property of Cummins (A Bankrupt) v Cummins (2006) 227 CLR 278

Unsworth v Tristar Steering and Suspension Australia Ltd [2008] FCA 1224

Zhao v Commissioner of the Australian Federal Police [2014] VSCA 137; (2014) 43 VR 187

• [1] This Decision arises as a result of applications from all parties seeking an award of costs. In Kelsey v Logan City Council & Ors (No 8) ('Kelsey No 8'),[1] I dismissed Ms Kelsey's application against the Respondents and informed the parties that I would hear them on the orders to be made in respect of costs. Subsequently all parties have sought costs orders.

• [2] This matter has a long history beginning with the Applicant's Public Interest Disclosure ('the PID') on 12 October 2017 pursuant to the Public Interest Disclosure Act 2010 (Qld) ('the PID Act'). On 1 December of that year, the Applicant filed with this Commission an application seeking:
  1. An interim order pursuant to section 54 of the PID Act and section 314 of the IR Act that the First Respondent must not consider or vote upon any resolution in respect of the Applicant's employment, whether pursuant to a probationary process or otherwise, until the hearing and determination of this proceeding.
  2. An order pursuant to section 51 of the PID Act and section 314 of the IR Act that the Second Respondent take no part in any resolution in respect of the Applicant's employment or have any involvement, direct or indirect, in the development or provision of information for any such resolution of the First Respondent.
  3. An order pursuant to section 314 of the IR Act for damages caused by the Second Respondent.
  4. Declarations pursuant to sections 451(2)(c), 464 and 572 of the IR Act that the Second Respondent is taken to have contravened section 285 of the IR Act
  5. Orders pursuant to sections 572 and 574 of the IR Act for the Second Respondent to pay the penalties referred to in Column 4, Scheduled 3 of the IR Act in respect of the corresponding contraventions.
  6. An order under section 55 of the PID Act that the whole of the proceeding not be published.
  7. Such further order as the Commission sees fit.[2]
• [3] On 25 January 2018 the Applicant filed an application seeking interim orders. This matter was heard by Fisher IC on 1 February 2018. The Commissioner ordered:
  1. The application for the interim order (which prevented a decision being made on her employment other than to confirm said employment) be refused; and
  2. The Second Respondent be precluded from taking part in any resolution of the First Respondent in respect of the Applicant's employment.[3]
• [4] On 22 February 2018, the Applicant amended her application to include a further seven Respondents. Those Respondents were councillors who had voted to terminate her employment at a meeting on 7 February 2018.
• [5] On 13 March 2018 the Applicant filed an amended application seeking an order that:
  1. The First Respondent must not consider or vote upon resolutions with respect of her employment until the completion of the contract terms on 25 June 2021;
  2. The Second through Ninth Respondents must not take part in any resolution with respect to the Applicant's employment until completion of the contract terms on 25 June 2021;
  3. The Applicant be reinstated; and
  4. There be an interim order that the Applicant be reinstated or in the alternative, that the First Respondent pay her normal salary.
• [6] On 4 May 2018, Thompson IC ordered that the Applicant be reinstated. This reinstatement order was appealed to the Industrial Court of Queensland ('ICQ').[4] The appeal was allowed, but Martin J (as his Honour then was) dismissed the application for injunction on the basis that the relevant test in ABC v O'Neill [5] was not made out.
• [7] A notice to produce was filed by the Applicant. This notice was directed towards the CCC, who subsequently produced these documents.
• [8] The Third to Ninth Respondents brought an application in the Commission to set aside the notice on 6 July 2018. An application to the same effect was brought by the Second Respondent three days later on 9 July 2018.
• [9] The CCC documents were provided to the Industrial Registry and subsequently sighted by Commissioner Thompson who at that time had carriage of the matter.[6]
• [10] The Respondents took issue with the Commissioner's viewing of the material. Applications for recusal from the Second and Third to Ninth Respondents were filed on 18 July 2018.
• [11] In short, the objections were couched in terms of the notice to produce being a 'fishing expedition',[7] and that the coercive powers of the CCC meant the documents contained highly sensitive information that the rules of evidence would ordinarily exclude.
• [12] The Respondents argued that as the Commissioner had sighted the documents, the Respondents had lost the opportunity to object to inadmissible evidence, and that the process had been 'tainted' by actual or apprehended bias.[8]
• [13] On 17 December 2018 the substantive hearing commenced, and the evidence was heard over 15 days concluding on 15 February 2019. The parties were due to give their closing submissions on 2 and 3 May 2019.
• [14] On Friday 26 April 2019 the Second to the Ninth Respondents were each arrested by officers of the CCC and charged with fraud under s 408C of the Criminal Code 1899, on the basis that they dishonestly caused a detriment to Ms Kelsey by terminating her employment.
• [15] The Appellants applied to the Commission for a stay of the proceedings on the basis that the Commission proceedings would require the Commission to determine the same factual matters that would need to be determined by the jury in the criminal trial, and that the likely publicity associated with that determination would prejudice the fair trial of the criminal charges.
• [16] The Commission refused to grant the stay.[9]
• [17] That decision was then appealed to the ICQ. The appeal was dismissed.[10]
• [18] The decision of the ICQ was appealed to the Queensland Court of Appeal and dismissed.[11]

• [19] The power of the Commission to order a party participating in litigation to pay the costs of another party is derived from statute and not the common law.
• [20] The power to award costs by the Commission is found in s 545 of the IR Act.
• [21] Section 545 of the Industrial Relations Act 2016 (Qld) ('the IR Act') deals with the general powers to award costs and provides:

(1) A person must bear the person's own costs in relation to a proceeding before the court or commission.

(2) However, the court or commission may, on application by a party to the proceeding, order -

(a) a party to the proceeding to pay costs incurred by another party if the court or commission is satisfied -

(i) the party made the application or responded to the application vexatiously or without reasonable cause; or

(ii) it would have been reasonably apparent to the party that the application or response to the application had no reasonable prospect of success; or

• [22] The rationale for s 545 of the IR Act can, in part, be gleaned from the decision of Augusta Ventures Ltd v Mount Arthur Coal Pty Ltd,[12] which explains the legislative policy underpinning s 570 of the Fair Work Act 2009 (Cth) which, like s 545, abrogates the usual rule that costs follow the event:

[103] The evident legislative policy is that persons who seek by legal proceedings to vindicate rights or to obtain relief under the FW Act should be able to do so without exposing themselves to the risk of having to pay the costs of another party in the event that they are unsuccessful. So much was made express by the Minister in the Second Reading Speech for the introduction of s 197A into the Conciliation and Arbitration Act in 1973:

This is part of our policy of bringing the courts to the people, of overcoming the deterrent which often prevents a person from seeking to right a wrong because of the burden of costs he might incur where his argument has failed to carry the day ... The possibility of having costs awarded against an applicant discourages the use of the courts as a means of settling disputes.

[107] It is important not to lose sight of legislative policy which underpins s 570. This can easily occur if one characterises it as being no more than a statutory fetter on the making of the usual order for costs. It is that, but it also reflects an attempt to address the underlying inequality of position commonly experienced by applicants in litigation for the enforcement of industrial entitlements.

• [23] Rule 70 of the Industrial Relations (Tribunals) Rules 2011 (Qld) ('the IR Rules') applies to the Commission when making an order for costs under s 545 of the IR Act.

• [24] Relevantly, rule 70(2) of the IR Rules provides:

(2) The court or commission, in making the order, may have regard to -

(a) for a proceeding before the commission - the costs payable on the scale of costs for Magistrates Courts under the Uniform Civil Procedure Rules 1999, schedule 2; or

(b) for a proceeding before the court or the full bench - the costs payable on the scale of costs for the Supreme Court and District Court under the Uniform Civil Procedure Rules 1999, schedule 1; or

(c) any other relevant factor.

• [25] In Watpac Construction Pty Ltd v The Regulator under the Work Health and Safety Act 2011,[13] I had the opportunity of surveying the relevant authorities in respect of awarding costs under the IR Act:

• [17] It is acknowledged that s 545 of the IR Act 2016 preserves s 335 of the IR Act 1999 by providing that a person must bear their own costs in relation to a proceeding unless the court or commission has ordered costs to another party.[14] However, s 545 goes further than s 335 by giving the Commission a discretion in circumstances where a party to the proceeding made the application, or responded to the application, when there was no reasonable prospect of success.

• [18] As a matter of ordinary expression, the words 'reasonable prospects of success' involves weighing up the circumstances of the case to determine whether they are reasonable in the sense that they provide a rational base for a decision to proceed with a matter or, as in this case, whether to respond to the application.

• [19] In Keddie & Ors v Stacks/Goudkamp Pty Ltd,[15] the New South Wales Court of Appeal was called on to consider a costs application in the context of s 345 of the Legal Profession Act and the obligation of a law practice not to provide legal services unless the claim has reasonable prospects of success.

• [20] In considering the phrase "reasonable prospects of success" the Court of Appeal had reference to the reasoning of Barrett J (as his Honour then was) in Degiorgio v Dunn

(No 2),[16] where his Honour observed:

... 'without reasonable prospects of success' ... equates its meaning with 'so lacking in merit or substance as to be not fairly arguable'. The concept is one that falls appreciably short of 'likely to succeed'.

• [21] Beazley JA (with whom Barrett JA and Sackville AJA agreed) held that the phrase 'without reasonable prospects of success' means 'not fairly arguable' and as to establish 'on the basis of provable facts and a reasonably arguable view of the law that the claim has reasonable prospects of success'.[17]

The circumstances in which indemnity costs should be awarded

• [22] The Commission was referred to a number of authorities which consider the circumstances in which a court would be justified in making an order for indemnity costs.

• [23] In the matter of (Bruce) Campbell Gordon v Department of Corrective Services, [18] Fisher IC considered the awarding of indemnity costs in the Commission and wrote:

Both Counsel referred the Commission to the decision in Park Avenue Motor-Hotel Pty Ltd v Beck, where the President reaffirmed earlier decisions of the Court that "the discretion which arises under s 335 of the Industrial Relations Act 1999 extends to the award of indemnity costs". Consideration was given to when an award of indemnity costs might be triggered. Although the President's decision was made in the context of s 335(1)(a) of the Act it was accepted by both Counsel that something more than unreasonable conduct must be shown in order to trigger an award of indemnity costs under s 335(1)(b), otherwise the statutory discretion would be "swallowed up".

In determining whether the conduct meets the description of "something more" I have considered the decision of the Queensland Court of Appeal in Di Carlo v Dubois & Ors, and the decision of Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd, the circumstances in which a court will be justified in exercising discretion to award indemnity costs are outlined. One of the categories identified by Sheppard J is misconduct that causes loss of time to the court and the proceedings. (Citations omitted)

• [24] The Applicant referred to Gold Coast City Council AND Natalia Bedran,[19] where Shepherd J, in reviewing the authorities in Colgate-Palmolive Company v Cussons Pty Ltd[20] as cited by the Queensland Court of Appeal in Legal Services Commissioner v Bone,[21] identified some instances where a court would be justified in exercising a discretion to award indemnity costs:

(a) the making of allegations of fraud knowing them to be false and the making of the irrelevant allegations of fraud;

(b) evidence of a particular misconduct that causes a loss of time to the court and to other parties;

(c) the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard to known facts or clearly established law;

(d) the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions; and

(e) an imprudent refusal to an offer of compromise.

• [25] Applegarth J in Fick v Groves (No 2)[22] identified the following factors to be considered in determining whether to award indemnity costs:

• the fact that proceedings were commenced or continued in wilful disregard of known facts;
• the making of allegations which ought never to have been made;
• the undue prolongation of a case by groundless contentions;
• evidence of particular misconduct that causes loss of time to the Court and to other parties;
• any imprudent refusal of an offer to compromise.

• [26] In John Holland Pty Ltd v Adani Abbot Point Terminal Pty Ltd (No 2) (John Holland),[23] Jackson J considered whether a warning ought to be given as a precondition to the making of an order for indemnity costs. John Holland involved an application for costs relating to an earlier application for leave to appeal under s 38 of the Commercial Arbitration Act 1990 between John Holland Pty Ltd and Adani Abbot Point Terminal Pty Ltd. The application took two days and involved in excess of 2,000 pages of affidavit material. The application for costs was commenced by the Respondent on the basis that the application for leave to appeal involved three special or unusual features that warranted an order for costs to be awarded on an indemnity basis. Jackson J concluded there was an oppression in the material filed in support of the application and therefore indemnity costs were awarded in favour of the Respondent. He wrote:

Next, a number of cases have considered whether a party who proposes to seek a special order that costs be assessed on the indemnity basis should give notice of an application for indemnity costs before the hearing of the matter. In Australia, that conception appears to have originated in the Court of Appeal of New South Wales in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd where Kirby P said:

If such an order is to be made, it would be preferable that it should follow due and timely warning by the successful party to the unsuccessful that indemnity costs will be sought. In short, if the legal representatives of parties to an appeal (particularly perhaps in commercial litigation such as the present) consider that the appeal, or points in it, are obviously hopeless and doomed to fail, they would be well advised to warn their opponents that continued prosecution of the appeal, or of the hopeless points, will result in an application to the Court for a special costs order.

That approach has been consistently followed since. However, as the cases show, lack of warning is a relevant consideration to take into account but a warning is not a precondition to making an order for indemnity costs. (Citations omitted)

• [26] In addition to the above analysis, the Third to Ninth Respondents directed my attention to the observations of the Full Court in A_ustralian Workers Union v Leighton Contractors Pty Ltd (No 2)_,[24] where the Full Court held:

[7] In Khiani v Australian Bureau of Statistics [2011] FCAFC 109 ("Khiani") the Full Court endorsed the summary of the authorities provided by Reeves J in Nimmo, in the matter of an application for an inquiry relating to an election for an office in the Australian Education Union (NT Branch) (No 2) [2011] FCA 728 at [27]- [30]. In our view the authorities establish the following principles:

(1) The purpose or policy of the section is to free parties from the risk of having to pay their opponents' costs in matters arising under the Act, while at the same time protecting those parties who are forced to defend proceedings that have been instituted vexatiously or without reasonable cause.

(2) It follows from the protection offered by s 570(2) that a person will rarely be ordered to pay the costs of a proceeding. But it is not necessary to prove that there are exceptional circumstances warranting the making of an order: Spotless Services Australia Limited v The Hon Senior Deputy President Jeanette Marsh [2004] FCAFC 155("Spotless") at [12]-[13] (to the extent that the Full Court in Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275 ("Kangan") held otherwise, we would respectfully disagree).

(3) The relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed: R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 473 per Gibbs J; Kangan at [60]. In Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 at 264-5 (approved in Kangan) Wilcox J said:

If success depends on 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.

• [27] In Kelsey v Logan City Council and Ors,[25] Davis J said, of s 545 of the IR Act:

• [25] Section 545 and provisions like it have been the subject of analysis in various decisions. The following principles can be identified:

(a) The starting point is that each party bears their own costs.

(b) A discretion to depart from that point only arises, relevantly here, if one of the jurisdictional facts identified in s 545(2)(a)(i) or s 545(2)(a)(ii) are established.

(c) The assessment of 'reasonable cause' in s 545(2)(a)(i) is:

1. an objective assessment; and
2. made considering the facts existing as at the time of the institution of the proceedings, here the appeal.

(d) Section 545(2)(a)(ii) prescribes a separate and distinct jurisdictional fact giving rise to a discretion to award costs. In consideration of whether s 545(2)(a)(ii) is engaged, facts which arise after the commencement of the proceedings may be relevant.

• [28] The Applicant seeks an order for costs for all stay applications between 2 May 2019 and 5 June 2020.
• [29] The Applicant makes the following submissions in respect of the order sought:

a) the Applicant has incurred costs as result of the stay applications; > > b) the stay applications were entirely unrelated to the Applicant and her substantive case and were wholly concerned with separate, unrelated criminal proceedings against the Second to Ninth Respondents, and to protect their interests in those proceedings; > > c) the stay applications were made at a point in the proceedings (After the close of evidence and when written submissions had already been exchanged) either without reasonable cause or with no reasonable prospect of success (see the decisions of the Commission, the Industrial Court of Queensland and the Court of Appeal); > > d) ultimately, the closing submissions were heard some 13 months later, after suppression orders were sought and granted in June 2020. Ms Kelsey was disadvantaged both by the necessity to incur costs and by the delay which resulted from the making of the unsuccessful applications.[26]

• [30] The Applicant seeks these orders pursuant to s 545(2) of the IR Act or in the alternative, pursuant to s 536(h).
• [31] The Second to the Ninth Respondents oppose the application and submit that the Applicant's application ought to be dismissed.
• [32] The Third to Ninth Respondents oppose the making of an order for costs for the stay on the basis that:

a. s. 536(1)(a) of the IR Act is subject to the limitation contained in s. 545; and

1. whilst the Stay Application was unsuccessful, it was not commenced without reasonable cause or in circumstances where it would have been reasonably apparent to the third to ninth respondents that the application had no reasonable prospects of success.[27]

• [33] On 2 May 2019 the (Dissolution of Logan City First Respondent) Amendment Regulation 2019 caused the first Respondent to be dissolved.
• [34] On Friday 26th April 2019 the Second to the Ninth Respondents were each arrested by officers of the CCC and charged with fraud under s 408C of the Criminal Code 1899, on the basis that they dishonestly caused a detriment to Ms Kelsey by terminating her employment.
• [35] The Third through Ninth Respondents collectively brought an Application before the Commission seeking a stay of proceedings until the criminal charges were determined.
• [36] The Second Respondent brought an application of the same nature six days later, on 22 May 2019.
• [37] On 4 June 2019 I ordered that the applications of the Second and Third to Ninth Respondents be dismissed with costs to be reserved.[28]
• [38] This decision was subsequently appealed by the Respondents to the ICQ,[29] and dismissed by Martin J (as his Honour then was). No order was made as to costs in the ICQ. The matter was then appealed the Court of Appeal. The Court of Appeal dismissed the Respondents' appeal and ordered costs.[30]

• [39] In the Applicant's submission it is argued that s 536(h) of the IR Act, the requirement for the interlocutory 'matter' to be prior to the hearing of the matter must be taken to mean prior to the conclusion of hearing (including oral submissions and decision), and the word 'necessary' should be read with the word 'just' to require a conclusion that it is necessary to make an order in relation to costs to achieve a 'just' outcome. Otherwise, the section cannot be given sensible operation.
• [40] The Applicant contends that the failure of the Second to Ninth Respondents to meet the threshold required for a stay to be granted, demonstrate that the stay applications of the respondents were made without reasonable cause or in circumstances where it would have been reasonably apparent to them, given the state of the law and the distinguishing circumstances that the applications had no reasonable prospects of success.

1. As the authorities suggest, the relevant question is whether the proceeding had reasonable prospects of success at the time it was instituted, not whether it ultimately failed.[31]

• [42] But, as in any other case under s 545 of the IR Act, costs may be awarded only where the interlocutory application was made vexatiously or without reasonable cause.[32]
• [43] The Third to the Ninth Respondents submit that s 536 of the IR Act confers power on the Commission to deal with interlocutory applications. Sub-paragraphs (a) to (i) are merely examples of the types of orders the Commission may make in dealing with such applications. As is identified in s 545, the Commission may make whatever orders are necessary to justly dispose of the interlocutory application.
• [44] Section 545(2) of the IR Act deals with the general powers to award costs.
• [45] Section 536 of the IR Act provides:

For conducting proceedings under this Act or another Act, the court, commission or registrar may make orders or give directions the court, commission or registrar considers just and necessary in relation to interlocutory matters to be taken before the hearing of the proceedings, including matters about the following -

(b) persons to be served with notice of proceedings;

(e) the issues to be referred to the court or commission;

(f) admissions, discovery, interrogatories or inspection of documents or property;

• [46] I accept that s 536(h) clarifies that the Commission has power to make an award for costs in respect of an interlocutory proceeding. Section 536 of the IR Act relevantly confers a discretion on the Commission to make orders and directions the Commission considers just and necessary in relation to interlocutory matters to be taken before the hearing of the proceedings. The matters referred to in paragraphs (a) to (i) are not exhaustive and are illustrative of the types of matters that may be the subject of interlocutory proceedings.[33]
• [47] Moreover, I accept that a mere conferral of a power on the Commission to award costs prior to the commencement of the hearing of the proceeding, does not mean that the power to award costs in interlocutory matters is not subject to the conditions imposed in s 545 of the IR Act.
• [48] In my view, the conditions imposed in s 545 of the IR Act apply equally in respect of an order for costs in interlocutory proceedings. This construction is confirmed by the decision of the ICQ in VCB National Services Pty Ltd v True Feelings Pty Ltd ('VCB').[34]
• [49] In that case, the respondent at first instance was successful in obtaining a costs order in its favour pursuant to s 326(h) of the Industrial Relations Act 1999 (Qld) ('the 1999 Act'). No interlocutory application was made. The Appellant appealed against the costs order. In setting aside the costs order Hall P wrote:[35]

The Commission dealt with the application for costs on the assumption that s. 326(h) of the Act was a grant of power to award costs in interlocutory proceedings. The submissions at first instance encouraged the assumption, on the appeal counsel for the appellant challenges the assumption. In my view counsel is entitled to challenge the assumption. There is no issue of fact or discretion to bind the appellant to its argument at first instance. The argument is all about statutory construction.

I have emphasised the words "orders" and "considers just and necessary" because counsel for the appellant emphasises these words and submits that in interlocutory proceedings, the Commission may make such orders as it "considers just and necessary" about any of the matters at paragraphs (a) to (i).

In my view the section cannot be read in that way. Paragraphs (a) to (i) are but an inclusive (and not exhaustive) list of examples of the matters upon which interlocutory proceedings may touch. The power vested by s 326(h) of the Act is a power to give orders and directions considered necessary and just to facilitate the conduct of interlocutory proceedings to be taken before the hearing of the cause. It does not follow that costs may not be awarded in respect of interlocutory proceedings. An interlocutory application is an application within the meaning of s. 335, compare Seair Trading Co Pty Ltd v Lewin and Ors [2000] QIC 68; (2000) 165 QGIG 789. But, as in any other case under s. 335, costs may be awarded only where the interlocutory application was made vexatiously or without reasonable cause (by s. 335(1)(b) reinstatement cases are special cases).

Here, of course, there was no interlocutory application. The Commission acted on its own motion. This [sic] being no interlocutory application, there was no power to award costs. I may add that it is because the costs power at s. 335 is limited to applications made "vexatiously or without reasonable cause" that s. 326(h) refers to matters relating to the interlocutory whilst the other paragraphs refer to matters relating to the cause. Very often, issues about vexation or reasonableness will be dealt with (perhaps in writing) after the decision upon the interlocutory application is known. (emphasis added).

• [50] In respect of the application for costs of the stay application, I accept that s 536(h) of the IR Act confers on the Commission a power to award in respect of interlocutory proceedings. Under s 536 of the IR Act, the legislature has restricted the costs that can be awarded in interlocutory proceedings to those costs which have been incurred prior to the hearing. That is prior to the hearing of the substantive matter and do not extend to matters such as instituting the proceedings or any prior interlocutory proceedings such as attending to disclosure.
• [51] The stay application required an exercise of judicial discretion. The authorities support the submission that the mere fact that the Third to Ninth Respondents were unsuccessful does not enliven the discretion to award costs.
• [52] The question of whether a stay should be granted is a matter of discretion for the Commission. As I observed in my decision, McMahon v Gould[36] requires the Commission to consider whether is it in the interests of justice that the proceeding be stayed. In undertaking that exercise, the Commission is required to embark on a balancing exercise to determine whether the discretion should be exercised in favour of refusing the application for a stay of the proceedings. On balance, it was concluded that the prejudice to Ms Kelsey outweighed any potential prejudice to the Second to Ninth Respondents.
• [53] The Applicant places reliance upon the Third to Ninth Respondents' conduct in seeking a stay and not merely seeking non-publication orders. The position of the Third to Ninth Respondents was, it was contended, consistent with what was said by the Victorian Court of Appeal Court in Zhao v Commissioner of the Australian Federal Police.[37] Where there is the scope for prejudice to the criminal proceedings, it is for the Commission to do the best that it can to prevent that prejudice.
• [54] In hearing the stay application, the Third to Ninth Respondents further contended that the non-publication orders were, in circumstances where the Applicant in a high-profile case had sought reinstatement, insufficient to ensure that there could be no prejudice. That is, even if the reasons were not published, that fact of reinstatement would likely become known to the public or otherwise come out in any criminal trial.
• [55] Importantly, the Commission found that this case could be distinguished from some of the authorities on the basis that the Applicant would suffer prejudice from the delay; that the resolution of the proceedings would attract some publicity; and that the intervening period between that publicity and any direction to the jury would ameliorate that prejudice.
• [56] However, having weighed all the competing arguments, the Commission concluded that the prejudice to the Applicant outweighed any potential prejudice to the Second to Ninth Respondents.
• [57] The Second to Ninth Respondents had an entitlement to apply for a stay of the proceedings. I accept the argument that each of the Commission, the ICQ and the Court of Appeal concluded, after weighing the relevant considerations on the evidence, that the discretion ought not be exercised but none pointed to some crucial evidence that was missing from the beginning or some part of a section which was not satisfied even on the evidence in support.
• [58] There is not a proper basis for an award of costs of the kind the Applicant now seeks. In my view, it could not be properly said that the application for a stay brought by the Second to Ninth Respondents could be said to have been brought without reasonable cause.
• [59] Accordingly, the discretion to award costs on the application for the stay has not been enlivened.

Application for costs by the Respondents - Costs in the substantive proceedings

• [60] The First Respondent seeks an order that, '... the Applicant pay the First Respondent's cost of and incidental to the application on the indemnity basis or, in the alternate, to be assessed on the standard Supreme Court scale of costs'.[38]
• [61] In support of the costs argument the First Respondent submits:
  1. The primary reason why it is submitted that the proceedings were instituted without reasonable cause or that from the outset (and many times during the course of the proceedings), it would have been reasonably apparent to the Applicant that her application against the First Respondent had no reasonable prospects of success, is that the proceedings were not instituted because she thought or believed that any of the Third to Ninth Respondents who voted in favour of her termination were misconducting themselves or were actuated by improper or corrupt motives, as she alleged.
  2. Rather, these allegations against the Third to the Ninth Respondents were exaggerated and confected as a means of the Applicant "reverse engineering" her case, that is to find some facts or circumstances in an attempt to sustain the outcome that she was determined to achieve for quite different reasons, rather than the traditional approach of examining the conduct of the alleged perpetrators and seeking to understand whether the conduct gave rise to any, and if so what, remedy. This led to the Applicant entirely misrepresenting interactions between herself and her opponents in order to recruit those matters into a manufactured case of a legal wrong against her. In these circumstances, it is little wonder that the case failed in its entirety.
• [62] It is contended by the First Respondent that all of the costs incurred in these proceedings were incurred because the Applicant elected to take the speculative path of commencing litigation, the success of which wholly depended upon the evidence of the Third to Ninth Respondents.
• [63] In support of the exercise of the discretion to award costs, the First Respondent submits that the Commission should exercise that discretion having regard to what is said to be the unreasonable rejection of settlement offers and attempts to mediate.[39] The Second Respondent's submissions refer to an unreasonable prolonging of the case as justifying a costs order.[40] The Third to Ninth Respondents' submissions refer to the rejection of what is said to be reasonable offers as 'sufficient to engage the discretion to award indemnity costs'.[41]
• [64] The affidavit of Mr Fynes-Clinton dated 27 May 2021 contains a compilation of the correspondence passing between the solicitors for the First Respondent and the Applicant.
• [65] On 26 June 2018, after the ICQ had found that there was no prima facie case against the First Respondent, the Respondents offered to settle the matter with the Applicant for the amount of $250,000.00 being an amount equal to her contractual notice period.[42]
• [66] On 5 October 2018 a 'Without Prejudice Save as to Costs' letter from King & Company Solicitors to Minter Ellison offering on behalf of all Respondents the sum of $260,000 to the Applicant plus an additional $500,000 for legal costs by way of settlement of these proceedings. This offer to settle was formally rejected by the Applicant on 31 October 2018.[43]
• [67] On 22 December 2018 a 'Without Prejudice Save as to Costs' letter was sent from King & Company Solicitors to Minter Ellison offered on behalf of all Respondents the sum of $350,000 to the Applicant. The offer was expressed to be a 'Calderbank' offer and noted that it would be brought to the attention of the Commission when applying for an order that the Applicant meet the Respondent's costs of the proceedings in the likely event of a successful outcome for the Respondents.[44]
• [68] A letter dated 31 January 2019 from Minter Ellison to King & Company Solicitors confirmed that the Applicant had rejected the offer to settle and proposed a counter-offer based on reinstatement or alternatively that the Applicant receive financial compensation on terms which had been previously proposed.

• [69] The Second Respondent seeks orders that:

(a) the Applicant pay his costs of and incidental to this proceeding because the Application against him was made without reasonable cause in circumstances where only the Council could take adverse action, there was no pleaded basis for anything other than a narrow case against the Second Respondent and there was no evidence as to a material change in position - and it has emerged at trial that the Applicant's case in that regard was based largely on her guesses or opinions. As a legal practitioner (and no ordinary litigant in this regard) the Applicant ought to have appreciated that was fatal - particularly where the Applicant ultimately and correctly conceded that she was required to meet the Briginshaw standard. Mere assertions and the like were never enough to establish the case against the Second Respondent; or,

(b) alternatively, the Second Respondent seeks an order that the Applicant pay his costs of the proceeding from the time the Further Amended Application was filed after the termination of the Applicant's employment (or such other date as is discussed below) because it ought to have been reasonably apparent to the Applicant at those times that the Application against him had no reasonable prospects of success. There was never any detail of any case against the Second Respondent set out in relation to the termination (despite request and protest), no proper evidence led in that regard and no cross-examination despite assertions it would occur.

• [70] The Second Respondent submits that the Applicant made the application against him without reasonable cause. In support of that submission, the Second Respondent contends that the claim against him can be broadly divided into two parts. First, the claim that he caused, in some unidentified way, the termination of the Applicant's employment and second, the balance of the claims.
• [71] The Second Respondent raises an alternative argument that if the Commission does not accept the primary argument that the action did not have reasonable prospects of success at the outset then in the premises of the matters set out below, the Second Respondent submits that the Commission should find the Applicant ought to have realised that her Application against the Second Respondent had no reasonable prospects of success and brought it to an end.
• [72] The position of the Second Respondent was set out in the written submissions of 22 June 2018. Relevantly those submissions provided:
  1. The Applicant alleges that the Second Respondent is taken to have engaged in adverse action and contravened section 285 of the IR Act because he committed all of the acts pleaded in paragraphs 26 to 30 of the Further Amended Application. That is obviously an error because he did not personally engage in all such acts. It must sensibly only be a reference to the acts which are alleged to have been done by the Second Respondent himself.
  2. In summary then, the Applicant only alleges that the Second Respondent relevantly:

(a) Commenced a different probation process for her to that of the previous CEO;

(b) Participated in the probation review process in relation to the Applicant to a greater degree than she alleges he should have;

(c) Reduced and cancelled some meetings with her;

(d) Made certain statements in two meetings of Councillors; and,

(e) Asked for her response to a query about legal advice received by the Council and sought her response by the following day.

1. In response, the Second Respondent submits that the evidence relied upon contains much speculation, opinion and bare assertions as to conclusions. A robust analysis of the direct evidence of what actually occurred (leaving aside observations or conclusions as to the effect) shows that the evidence is limited in effect.

1. In any event, none of these matters amounts to "adverse action" within the definition of the IR Act for the reasons set out in more detail below. In particular:

(a) Only the employer of the Applicant, the Council, can take adverse action. The Second Respondent was not the employer and therefore none of the matters alleged against him can be "adverse action". The majority of the claim against the Second Respondent fails for that reason;

(b) In any event, the Applicant alleges (and only alleges) that the conduct was "adverse action" because each aspect of it allegedly altered her position. She does not explain how each matter did so; and,

(c) The actions complained of can only be "adverse action" if they alter the Applicant's position in meaningful and substantial way to her prejudice. None of them are established to have done so.

1. Further, and in any event, the IR allegations against the Second Respondent ought not succeed because the complaints made by the Applicant were not the exercise of "workplace rights" within the definition in section 284 of the IR Act. The legislation relied upon by the Applicant in that regard bears an insufficient connection with the employment. That is also enough to be fatal to the majority of the claim against the Second Respondent.

1. Further, and in any event, the evidence for the Applicant does not establish any form of causal link at all between the alleged conduct on the part of the Second Respondent and the termination: in circumstances where he did not vote upon the resolution to terminate and did not attend the relevant meeting.
2. Finally, there is no proper basis for any award of penalties or damages because there is no evidence to establish any link between the alleged conduct and the alleged losses (such as they are: the evidence falls far short of establishing any kind of loss or the quantum of that loss).
3. For the same reasons, there is no sound basis for an order against the Second Respondent that he pay for remuneration lost as a result of the termination: when he did not participate in the vote to terminate. There is no need to consider that aspect any further than the absence of such a link because it is fatal to that claim against the Second Respondent.
4. Finally, the Second Respondent does not oppose, without any admission of liability, an order in the form set out in paragraph 2 of section 3 of the Further Amended Application (the injunction) - if the Applicant establishes the right to be reinstated as against the First Respondent. That may involve some delegation of his statutory obligations. There is therefore no need for any determinations in connection with the Public Interest Disclosure issues insofar as he is concerned. If the Applicant is reinstated (and that is primarily a matter for the Council) he does not object to not taking part in resolutions concerning her employment.

• [73] It is contended by the Second Respondent that having regard to the complexity and length of the hearing it would be appropriate that any costs order made by the Commission be made on the Supreme Court scale.
• [74] The Second Respondent further submits that having regard to the matters identified in his submissions and in the supporting Affidavit it is appropriate that his costs be awarded and paid on an indemnity basis. Moreover, he contends that the commencement and continuation of the proceeding against the Second Respondent was so unreasonable as to warrant an order for costs on an indemnity basis.

Submissions of the Third to the Ninth Respondents

• [75] In short, the Third to Ninth Respondents seek an order for costs of the proceeding on an indemnity basis or alternatively on the standard basis to be assessed in accordance with the Supreme Court Scale.
• [76] The Third to Ninth Respondents submit that the Applicant either made the application without reasonable cause or in circumstances where it would have been reasonably apparent to her that the application had no reasonable prospect of success against the third to ninth respondents. Further, it is submitted that the Applicant's conduct of the proceedings was such to warrant an order for indemnity costs.
• [77] The Third to Ninth Respondents accept that to be entitled to an order for indemnity costs, they must establish that:

(a) the applicant commenced or maintained the proceeding either without reasonable cause or with no reasonable prospect of success; and

(b) the conduct of the litigation by the Applicant must involve something more than the factor enlivening the Commission's discretion pursuant to s 545(2)(a) of the IR Act.

• [78] The Third to Ninth Respondents argue that if the Commission is not satisfied that an award of costs should be made on the indemnity basis, they seek that the costs be payable on the Supreme Court Scale.
• [79] The Third to Ninth Respondents submit that the power to award costs is enlivened because the case against them was "hopeless".[45]
• [80] The Applicant claimed against the Third to Ninth Respondents that they were persons involved in a contravention under s 285 of the IR Act; and that they caused a detriment to the Applicant in breach of s 40 of the PID Act by voting to terminate her employment.
• [81] The claim concerning contraventions of civil penalty provisions under the IR Act was said to be commenced without reasonable cause and or was doomed to fail because the Applicant never alleged the essential elements of the contravention.
• [82] The Third to Ninth Respondents contend that the lack of evidence can be inferred from the Applicant's failure to:

• [83] It was submitted that if the Applicant had a basis to allege that the Third to Ninth Respondents had the requisite knowledge, then those matters should have been pleaded. The fact that they were not, it was contended, leads to the inescapable conclusion that the Applicant had no proper basis for alleging that the Third to Ninth Respondents were personally involved in the alleged contravention.
• [84] The alleged contravention of s 285 of the IR Act was, it was argued, bound to fail because the Applicant did not plead the essential elements of the offence. Having not pleaded those matters, the Applicant was never able to prove the necessary elements of the contravention. Thus, the claim as framed from the outset could not possibly succeed.[46]
• [85] In respect to the allegation concerning a contravention of s 40 of the PID Act it too was doomed to fail because as a matter of law, the casting of an individual ballot by the third to ninth respondents could not constitute a detriment. The individual ballots had no effect by themselves.
• [86] The Applicant bore the onus of establishing the ballots were cast for a proscribed reason. As a consequence, and without the benefit of the reverse onus, the Applicant needed to adduce evidence that the Third to Ninth Respondents terminated the Applicant's employment because she had made a PID.
• [87] The Third to Ninth Respondents urged the Commission to conclude that the proceedings were commenced without reasonable cause or made in circumstances where it would have been reasonably apparent to the Applicant that she had no prospect of success against the Third to Ninth Respondents. Accordingly, the Commission's discretion to award costs is enlivened in accordance with s 545(2) of the IR Act.

• [88] Without again rehearsing the relative merits of each of the respective parties and the findings in the substantive matter, let me set out in short form the following summary.
• [89] In the substantive matter, it was accepted that the First Respondent's reason for acting in respect of the termination can be determined by ascertaining the reasons of the individual Councillors who comprised the majority which became the Council decision.
• [90] When the Third to Ninth Respondents participated in a collective decision-making process authorised by the Local Government Act 2009 (Qld), they were, along with the other Councillors, the directing mind and will of the Council. The Third to Ninth Respondents did not have the legal right to act as the First Respondent, other than by participating in a meeting of the Council. If the reasons of a sufficient number of the Third to Ninth Respondents for voting as they did include a proscribed reason, the outcome of the vote may be examined by the Commission accordingly.
• [91] The approach adopted by the Commission in the substantive proceedings was to ascertain whether any, and if so which, Councillors may have voted on 7 February 2018 with a proscribed motive. If any of them were found to have done so, the vote of each such person on that day would be disregarded as if it had not been cast, and the resultant effect on the vote on 7 February 2018 would be assessed.
• [92] The First Respondent's reason for acting in respect of the termination is to be found in the individual reasons of those persons who made up a majority in the vote. It was for the Commission to determine the actual reasons why the Third to Ninth Respondents voted to terminate Ms Kelsey's employment.
• [93] What was submitted by the First Respondent was that the allegations against the Third to the Ninth Respondents were exaggerated and confected as a means of the Applicant 'reverse engineering' her case.
• [94] The submissions of the First Respondent invite the Commission to assess the cogency of the Applicant's evidence; to assess her credit and her motives in bringing the proceedings in the Commission. That is an assessment to be made at the hearing. In that respect, each of the Third to Ninth Respondents gave evidence and were cross-examined as to their reasoning. For the reasons advanced in the decision in the substantive hearing those allegations were rejected.
• [95] The evidence relied upon by the Applicant which supported the claim against the Second Respondent was, as canvassed in the Second Respondent's written submissions, limited.
• [96] The Second Respondent submits that as he was no longer the Mayor of the Council, there was no proper basis for injunctive relief against him and at the time the other Councillors provided their evidence disclosing their reasons for the termination, the Applicant ought to have realised that there was no prospect of the application against him succeeding in connection with the termination.
• [97] Whilst it has been argued by the Respondents that there were defects within the case pleaded by the Applicant, there remained both legal and factual matters which required resolution.
• [98] It was asserted by the Applicant that if the case advanced by her was inadequate then an application ought to have been brought to strike out the proceedings.[47] The Second Respondent answers that submission by arguing that a forensic decision was taken not to proceed with such an application on the basis that the Applicant would have relied upon the need to cross-examine the Third to Ninth Respondents to defeat that application.[48] Implicit in that submission is the recognition that there were factual matters which needed to be resolved. In the hearing of the substantive matter, the Second Respondent took the position of restricting the Applicant to the pleaded case and to identify the deficiencies of her case.
• [99] As is submitted by the Applicant, the First Respondent made a number of admissions including:
  1. the Council complaint and the CCC Referral were public interest disclosures under ss 13 and 17 of the PID Act;
  2. the termination of the Applicant's employment caused a detriment to the Applicant; the Applicant had workplace rights of a role or responsibility under an industrial law;
  3. she was able to start or participate in a process or proceedings under an industrial law; and
  4. that she exercised her workplace rights; and the termination of the Applicant's employment amounted to adverse action.[49]
• [100] The First Respondent is a corporation which can only 'decide' things by a vote of the Councillors.
• [101] It was not in contention in the substantive hearing that when the Third to Ninth Respondents participated in a collective decision-making process authorised by the Local Government Act 2009, they are, along with the other Councillors, the directing mind and will of the Council.
• [102] The First Respondent can be found to have contravened the PID Act if the minds of the Councillors who voted and decided the question of termination are proved to have been actuated by the fact that the Applicant had made a PID against the Second Respondent.
• [103] The Third to Ninth Respondents accept that the First Respondent's reason for acting in respect of the termination are to be found in the individual reasons of those persons who made up a majority in the vote. Central to the question to be resolved was whether the Third to Ninth Respondents ought to be believed as to their reasons for terminating the Applicant's employment. In order to do that, the Commission was called upon to assess the relative credit of each witness and to determine whether or not their decision to terminate her employment was for a proscribed reason.
• [104] It is correct, as was submitted by the Applicant that there needs to be an examination of the reasoning employed by the Third to the Ninth Respondents. That, of course was an enquiry that took place at the hearing. It was a question of fact, which was answered in the light of all the facts established in the proceeding.
• [105] Each of the Third to Ninth Respondents set out their individual reasons for voting to dismiss the Applicant and what they said motivated them to vote for termination. Those reasons were set out in some detail in a multitude of affidavits filed in the proceedings. The Commission's function was to ascertain the collective will in relation to the alleged adverse action taken against the Applicant.
• [106] The Applicant contended that there was a sound basis to doubt the veracity of the evidence of the Third to Ninth Respondents. There were a number of grounds advanced to support that proposition.[50] As the Applicant submits, the provision of evidence alone is not determinative. In that regard, reference is made to Board of Bendigo Regional Institute of Technical and Further Education v Barclay,[51] where French CJ and Crennan J said:

There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?".

This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity. (citations omitted)

• [107] There was a clear contest between the Applicant and the Respondents as to what evidence the Commission should accept. The mere fact that the Respondents advanced a contrary argument or that the proposed evidence presented by the Applicant ought not to be accepted is not a basis for concluding, in hindsight, that the case advanced by her was one which ought to be characterised as being made without reasonable cause or made in circumstances where it would have been reasonably apparent to the Applicant that she had no reasonable prospect of success.
• [108] What I am being asked to do, with the benefit of hindsight, is to infer or to speculate about what might occur at the final hearing.
• [109] The matter which I am now called on to consider is whether a discretion to award costs has been enlivened and if satisfied that it has, whether the discretion ought to be exercised.
• [110] For the reasons advanced above, I am not convinced that the Applicant's case could be characterised as having no objective prospects of success.
• [111] Should the discretion to award costs have been enlivened, the Second to Third Respondents urged the Commission to have regard to what the First Respondent described as the Applicant's unreasonable rejection of settlement offers and attempts to mediate.[52] The Second Respondent's submissions refer to an unreasonable prolonging of the case as justifying a costs order.[53] The Third to Ninth Respondents' submissions refer to the rejection of what is said to be reasonable offers as 'sufficient to engage the discretion to award indemnity costs'.[54]
• [112] The chronology of offers and attempts to mediate were set out in the affidavit of

Mr Fynes-Clinton.[55] As noted in that chronology, the offer made on 22 December 2018[56] was characterised as a Calderbank offer.[57]

• [113] A Calderbank offer is a factor that may influence the Commission in exercising its discretion to award costs.[58]
• [114] In SMEC Testing Services Pty Ltd v Campbelltown City Council,[59] Giles JA wrote:

The making of an offer of compromise in the form of a Calderbank Letter ... where the offeree does not accept the offer but ends up worse off than if the offer had been accepted, is a matter to which the court may have regard when deciding whether to otherwise order, but it does not automatically bring a different order as to costs. All the circumstances must be considered, and while the policy informing the regard had to a Calderbank letter is promotion of settlement of disputes an offeree can reasonably fail to accept an offer without suffering in costs. In the end the question is whether the offeree's failure to accept the offer, in all the circumstances, warrants departure from the ordinary rule as to costs, and that the offeree ends up worse off than if the offer had been accepted does not of itself warrant departure.

• [115] In Crump v Equine Nutrition Systems Pty Ltd Trading as Horsepower (No 2)[60] Hoeben J made clear that the reasonableness or otherwise of the refusal to accept a Calderbank offer must be considered by reference to the situation at the time when the offer was made and not solely by reference to the ultimate outcome of the proceedings.
• [116] There is no room for hindsight in assessing whether the rejection of a Calderbank offer was reasonable. The authorities have warned of the dangers of judging the reasonableness of a settlement offer through the prism of hindsight.[61]
• [117] According to the chronology set out in the First Respondent's submissions, the final offer of settlement by the Respondents was communicated at a time before the calling of the witnesses for the First and Third to Ninth Respondents. The offer must be considered by reference to the situation at the time when the offer was made.
• [118] The Applicant consistently expressed her position to be that she wished to protect her reputation and future employment prospects. She argued that she should be reinstated before her contract of employment came to an end on 25 June 2021. By being reinstated, the Applicant submitted that she would be afforded the opportunity to demonstrate that she was capable of performing the responsibilities as Chief Executive Officer with the First Respondent with the hope of securing a second contract.
• [119] It was against that background that the Applicant rejected the offer. At the point in time when an offer was made and rejected, the witnesses for the First and Third to Ninth Respondents had not yet been examined or cross-examined. In those circumstances, it was not unreasonable that the Applicant did not accept the offer.
• [120] As noted elsewhere, the starting point for a consideration of these applications is the statutory presumption contained in s 545(1) of the IR Act that a party must bear their own costs of a proceeding before the Commission.
• [121] It is readily accepted by all parties that s 545(2)(a) of the IR Act authorises the Commission to order an unsuccessful party to the proceeding to pay costs in circumstances where an application is made vexatiously or without reasonable cause, or that it would be reasonably apparent to a party that the application or response to the application had no reasonable prospect of success.
• [122] In Newmont Pajingo Pty Ltd v Tomac Enterprises Pty Ltd (No. 2) Hall P said: '... one must not be deceived by the clarity of vision which comes with the advantage of hindsight'.[62] This is such a case.
• [123] The adequacy of the Applicant's case is being assessed after having had the benefit of hearing and assessing the evidence. As was observed in Degiorgio v Dunn (No 2)[63]

... 'without reasonable prospects of success' ... equates its meaning with 'so lacking in merit or substance as to be not fairly arguable'. The concept is one that falls appreciably short of 'likely to succeed'.

• [124] The submissions of the Respondents have, unsurprisingly, been influenced by the evidence given during the hearing. Notwithstanding the inadequacies in the pleaded case as identified by the Respondents, I think it is fair to say that this is a case which was arguable, only to fail to persuade the Commission to adopt that view.[64]
• [125] For the reasons given above, I am not persuaded that I ought to depart from the general rule established by s 545(1) of the IR Act and conclude that an award of costs is appropriate. The proper balancing of the respective interests of the parties is best served by ordering that each party bear their own costs in relation to a proceeding before the Commission.
• [126] The Commission orders as follows:

1. Applications for costs dismissed.
2. Each party to bear their own costs in relation to the proceeding before the Commission.

[1] [2021] QIRC 114 ('Kelsey No 8').

[2] Application filed 1 December 2017, 3 [3].

[3] Kelsey v Logan City Council and Another [2018] QIRC 9.

[4] Dalley v Kelsey [2018] ICQ 6.

[6] Kelsey v Logan City Council & Ors [2018] QIRC 99.

[9] Kelsey v Logan City Council & Ors (No 7) [2019] QIRC 85 ('Kelsey No 7').

[10] Dalley & Ors v Kelsey & Ors [2019] ICQ 8.

[11] Smith v Kelsey (2020) 4 QR 1.

[12] (2020) 384 ALR 340.

[13] [2020] QIRC 187.

[14] See explanatory notes to the Industrial Relations Bill 2016.

[15] [2012] NSWCA 254 (17 August 2012).

[16] [2005] NSWSC 3; 62 NSWLR 284.

[17] See also: Lemoto v Able Technical Pty Ltd & Ors [2005] NSWCA 153; 63 NSWLR 300.

[18] (Bruce) Campbell Gordon AND Department of Corrective Services, [2010] QIRC 20, [21], [24].

[19] Gold Coast City Council AND Natalia Bedran (B/2013/14) - Decision http://www.qir.qld.gov.au [8].

[20] [1993] FCA 536; (1993) 46 FCR 225 (cited in (Bruce) Campbell Gordon v Department of Corrective Services [2010] QIRC 54.

[21] [2014] QCA 179.

[22] [2010] QSC 182 [4].

[23] [2018] QSC 48 [15]-[16].

[24] [2013] FCAFC 23; (2013) 232 FCR 428, 430-431 [7].

[25] [2021] ICQ 11.

[26] Applicant's Submissions dated 27 May 2021, 1-2 [3].

[27] Third to Ninth Respondents' Submissions dated 10 June 2021, 1-2.

[29] Dalley & Ors v Kelsey & Ors [2019] ICQ 8.

[30] Smith v Kelsey (2020) 4 QR 1, 29-30 [109].

1. [31] R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia [1978] HCA 51; (1978) 140 CLR 470, 473

(Gibbs J); Kanan v Australian Postal and Telecommunications Union [1992] FCA 539, [60].

[32] VCB National Services Pty Ltd v True Feelings Pty Ltd [2004] QIC 56; (2004) 177 QGIG 28 ('VCB').

[33] Wicks v Workers' Compensation Regulator (No. 2) [2021] QIRC 112 [17].

[34] VCB (n 32); See also Sea Air Trading Co Pty Ltd v. Lewin & Ors [2000] QIC 68.

[36] McMahon v Gould (1982) 7 ACLR 202 [22].

[37] [2014] VSCA 137; (2014) 43 VR 187.

[38] First Respondent's Submissions dated 27 May 2021 [63].

[39] First Respondent's submissions dated 27 May 2021, [50] onwards.

[40] Second Respondent's submissions dated 27 May 2021 [3], [28].

[41] Third to Ninth Respondents' submissions dated 27 May 2021, [30].

[42] Affidavit of T Fynes-Clinton dated 27 May 2021, Annexure TFC-3.

[45] Third to Ninth Respondents' submissions in reply dated 9 July 2021, [51] - [56].

[46] Third to Ninth Respondents submissions dated 27 May 2021.

[47] Applicant's submissions in response dated 14 June 2021.

[48] Second Respondent's submissions dated 27 May 2021.

[49] Applicant's submissions in response to the Respondents' Application for costs dated 11 June 2021.

[50] Applicant's submissions dated 27 May 2021, 3-4, 8-10 [24]-[30].

[51] [2012] HCA 32; (2012) 248 CLR 500, 517 [44]-[45].

[52] First Respondent's submissions dated 27 May 2021, [50] onwards.

[53] Second Respondent's submissions dated 27 May 2021, [3], [28].

[54] Third to Ninth Respondents' submissions dated 27 May 2021 [30].

[55] Affidavit of Timothy Pelham Fynes-Clinton filed 28 May 2021.

[58] Morris v McEwen [2005] SASC 284; (2005) 92 SASR 281, 289 (Besanko J), 300 (White J).

[59] [2000] NSWCA 323 [37].

[60] [2007] NSWSC 25 [41].

[61] Stipanov v Mier (No 2) [2006] VSC 424 [12]; Seven Network Ltd v News Ltd [2007] FCA 1489 [44]; McDonnell v McDonnell [1977] 1 WLR 34, 38.

[62] Newmont Pajingo Pty Ltd v Tomac Enterprise Pty Ltd (No. 2) [2005] ICQ 23.

[63] [2005] NSWSC 3; (2005) 62 NSWLR 284.

[64] Otto v Boxgrove Pastoral Co Pty Ltd (No. 2) [2002] ICQ 45.