LNC Industries Ltd v BMW [2001] FCA 1665 | Case summary

proceeding in a matter arising under the act 4 Section 347 of the Act applies only to "a proceeding (including an appeal) in a matter arising under [the] Act (other than an application under section 170CP)". The application dismissed by the Court was not made pursuant to s 170CP of the Act. Mr Crozier commenced this proceeding in the High Court of Australia under s 75(v) of the Commonwealth Constitution. The proceeding was later remitted to this Court. The second respondent submitted that the matter arose under s 75(v) of the Constitution and not under the Act. 5 The Full Court of this Court considered much the same issue in Re Ross; Ex parte Australian Liquor, Hospitality and Miscellaneous Workers Union [2001] FCA 770. It said at [74]: Although it has succeeded in its application, the union is not entitled to an order for its costs of the proceeding if [s 347] is applicable. This proceeding was instituted in the High Court. The union sought prohibition, certiorari and mandamus. In such cases, the test for determining whether a proceeding is in a matter arising under the … Act for the purposes of s 347 is whether the right or the duty that is sought to be enforced owes its existence to a provision of the … Act. [Emphasis added] This test derives from a number of judgments of the High Court of Australia: see, e.g., Re Polites; Ex parte Hoyts Corporation Pty Ltd (1991) 173 CLR 78 at 93; LNC Industries Ltd v BMW (Australia) Ltd (1983) 151 CLR 575 at 581; and R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154. 6 In Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 178 ALR 61 at [42], the High Court noted, however, that not all applications made under s 75(v) of the Constitution with respect to the duties of the Commission involve matters arising under the Act. The Court observed at [43]: It was pointed out in Re McJannet; Ex parte Australian Workers' Union of Employees (Qld) (No 2) [(1997) 189 CLR 654] that relief by way of prohibition is not relief for the enforcement of a right or duty created or conferred by statute. Rather, the right in issue when relief is sought by way of prohibition is the right conferred by s 75(v) of the Constitution to compel an officer of the Commonwealth to observe the limits of that officer's power or jurisdiction. The corresponding duty to observe those limits also derives from s 75(v). And that is so even if the asserted limits derive from statute. Accordingly, it was correctly held in McJannet that s 347(1) of the IR Act has no application to a proceeding for the issue of prohibition under s 75(v) of the Constitution. The Full Court of this Court applied the same analysis in Quickenden v Commissioner O'Connor of the Australian Industrial Relations Commission [2001] FCA 303. 7 Mr Crozier claimed that the Commission's decision of 11 May 2000 was vitiated by jurisdictional error and sought a writ of certiorari and a writ of mandamus "to compel the [Commission] to reconsider the matter in accordance with law". Prohibition to restrain the Commission from exceeding its jurisdiction was not sought. In its decision of 11 May 2000, the Commission had dismissed an appeal brought by Mr Crozier from the dismissal of his application for relief under s 170CE(1)(a) of the Act. The duties of the Commission in connection with an appeal are created, expressly or impliedly, by the Act: see ss 45 and 170JF. Having given Mr Crozier leave to appeal, the Commission was bound by the Act to hear and determine the appeal according to law. In the present case, such hearing and determination involved the application of s 170CG(3) of the Act, which led to the decision that Mr Crozier has attempted unsuccessfully to impugn. In the circumstances, the duty invoked by Mr Crozier, which he erroneously thought had not been performed, owed its existence to the provisions of the Act: cf Re Polites at 93.

without reasonable cause 8 Accordingly, the second respondent is not entitled to an order for costs unless the proceeding was instituted vexatiously or without reasonable cause. The second respondent did not contend that Mr Crozier had instituted the proceeding "vexatiously" within the meaning of s 347 of the Act. 9 As to the meaning of "without reasonable cause", both Mr Crozier and the second respondent relied on the observations of Wilcox J in Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257. His Honour said at 264-265: [O]ne 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. 10 In this regard, it may also be relevant to bear in mind the purpose of s 347 of the Act. In Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 272, Northrop J said of s 197A of the Conciliation and Arbitration Act 1904 (Cth) (which was a predecessor provision to s 347): The policy of s 197A of the Act is clear. It is designed to free parties from the risk of having to pay the costs of an opposing party. At the same time the section provides a protection to parties defending proceedings which have been instituted vexatiously or without reasonable cause. This protection is in the form of conferring a power in the court to order costs against a party who, in substance, institutes proceedings which in other jurisdictions may constitute an abuse of the process of a court. 11 After referring to the observations of Gibbs J in R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 cited Northrop J in Heidt, the Full Court of this Court said in Thompson v Hodder (1989) 21 FCR 467 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. See also Hatchett v Bowater Tutt Industries Pty Ltd (No 2) (1991) 28 FCR 324 at 325 per von Doussa J. 12 The test imposed by the expression "without reasonable cause" is similar to that adopted in an application for summary judgment: see Heidt at 272-273; Geneff v Peterson (1986) 19 IR 40 at 87-88; and Hatchett at 327. 13 In its reasons for judgment delivered on 1 August 2001, the Court set out the submissions made on behalf of Mr Crozier. There were, it may be recalled, three grounds advanced by Mr Crozier in support of his application for prerogative relief. Leaving aside the second and third grounds which were plainly very weak, the first ground, which involved the question of the proper construction of s 170CG(3)(a) of the Act, raised an arguable point of law: cf Kanan at 264-265. As Gibbs J said in Moore at 473, "a party cannot be said to have commenced a proceeding 'without reasonable cause' … simply because his argument proves unsuccessful". Although the Court rejected Mr Crozier's submissions, without calling on counsel for the second respondent, this was not because Mr Crozier's first ground was clearly hopeless. Rather, it was because it became apparent in the course of the argument put by counsel for Mr Crozier, following questions from the Court (which had the benefit of the second respondent's written submissions filed in advance of the hearing) that the application should not succeed. For this reason, we do not accept the second respondent's submission that the applicant instituted the proceeding "without reasonable cause" for the purpose of s 347 of the Act. 14 The second respondent's application for costs is therefore refused. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

LNC Industries Ltd v BMW

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