MAZZEI & ORS v THE INDUSTRIAL RELATIONS COMMISSION OF NSW IN COURT SESSION & ORS

COUNSEL : P C Coleman - Claimants R Reitano - Second and Third Opponents SOLICITORS : Comlaw by their Sydney Agents Mavrakis & Associates - Claimants Barry Lazarus Lawyers - Second and Third Opponents CATCHWORDS : SUPREME COURT PRACTICE AND PROCEDURE - Costs - Security for costs - failure to comply with costs orders in proceedings before Industrial Relations Commission - abuse of process - Supreme Court Rules, Pt53 and Pt 51r16 LEGISLATION CITED : Supreme Court Rules CASES CITED: Marchant v Dunlop (1927) 44 WN (NSW) 108 Young v Jackman (1986) 7 NSWLR 97 DECISION : Application dismissed with costs

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40760/99 IRC CT96/1168 SPIGELMAN CJ PRIESTLEY JA SHELLER JA

MAZZEI & ORS v THE INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION & ORS JUDGMENT

1 SPIGELMAN CJ: I will ask Sheller JA to deliver the first judgment. 2 SHELLER JA: The claimants, Dino Mazzei, Silvio Mazzei, Ross Bridgman and Rawson Manor Pty Limited, apply by notice of motion for orders reviewing the decision and orders of Deputy Registrar Howe dated 28 February 2000 that those claimants provide security for costs in the proceedings which are number CA 40760/99. That application was supported by an affidavit made by Charles Leonidas on 22 March 2000. The opponents to the application are the Industrial Relations Commission of New South Wales in Court Session, Craig Darren Smith, Kelly Ann Smith and Nutshack Franchise Pty Limited. 3 The proceedings in this Court were begun by the claimants by summons, which was amended as ordered by Registrar Jupp on 22 November 1999. Orders were sought in the nature of prohibition, certiorari and mandamus on the ground that the first opponent, the Industrial Relations Commission, had wrongfully stayed the claimants' application for leave to appeal and appeal in matter 6593/98 and had wrongfully refused to exercise its jurisdiction. 4 The application for leave to appeal and appeal in the Industrial Relations Commission was an appeal from a decision of Maidment J given on 28 August 1998. 5 Maidment J made orders that a franchise agreement and various other associated agreements between the second, third and fourth opponents in this application and the claimants should be void from their commencement. His Honour also ordered five respondents, of which the claimants were four, jointly and severally to pay to the opponents Craig Darren Smith and Kelly Ann Smith $139,005 plus interest calculated at $37,686.95. 6 The orders made by Maidment J were made on 25 November 1998. The claimants' appeal from his Honour's decision was filed on 8 January 1999. On 13 January 1999 the respondents to that appeal filed a notice of motion in the Industrial Relations Commission in Court Session seeking, amongst other things, an order that the appellants should not be heard in respect to the appeal until they had complied with his Honour's order. The respondents also sought an order that the appeal by the appellants be stayed until further order. 7 That application came on for hearing before the Full Bench of the Industrial Relations Commission, which, on 17 August 1999, made orders that the claimants' application for leave to appeal and the appeal should be stayed until further order and that the appellants pay the respondents' costs of the motion on a joint and several basis. It is from that decision that the application for prerogative relief is made in this Court. 8 In the course of their reasons for judgment, the Industrial Relations Commission referred to the fact that the claimants had not made any payment on account of the amounts ordered to be paid by Maidment J and have made no application for a stay pending the appeal. Their Honours observed in that event, whether a stay be refused or not sought, the unsuccessful party has a legal liability to comply with the order against it, in default of which it is prima facie in contempt of court. 9 Their Honours referred to Marchant v Dunlop (1927) 44 WN (NSW) 108 at 109 and Young v Jackman (1986) 7 NSWLR 97 at 99 and 101. Their Honours then continued by saying: "Apart from the concept of contempt, which has its own remedies under s180, …. there remains the position, as here, where an unsuccessful party at first instance has sought to further utilise the jurisdiction of the Court by way of appeal but by expressly eschewing its ability to obtain a stay of the challenged order pending the determination of its appeal- that, in our view, is to abuse the processes of the Court by disclaiming use of the stay facility in relation to a decision which is otherwise final and, it may be added, where the appeal is not even as of right but only by leave."

It was on the basis of that consideration that their Honours made the order which I have already referred to. 10 The application that came before Deputy Registrar Howe was one by the second and third opponents in this Court that the first to fifth claimants provide security for their costs in the sum of $13,000. Deputy Registrar Howe gave reasons for judgment and ordered that the first to fourth claimants to the amended summons pay the sum of $12,750 in a form acceptable to the Registrar into Court by 27 March 2000 and that the proceedings be stayed until such time as that sum is paid, and he made an order that the first to fourth claimants pay the costs of the application. 11 In the course of giving his reasons for judgment the Deputy Registrar referred to Pt 53 of the Supreme Court Rules and said that that was not an exhaustive list but merely indicative of the reasons for an order for security for costs. He dealt with the question of his own power on the application and then referred to Pt 51 r16, which deals with applications for security for costs in this Court. In particular, that rule provides that: "... the Court of Appeal may, in special circumstances, order that such security as the Court of Appeal thinks fit be given for the costs of the appeal."

and that "subject to [that] rule, no security for the costs of an appeal to the Court of Appeal shall be required."

Subrule (3) provides that subrules (1) and (2) do not affect the powers of the Court under Pt 53. 12 The Deputy Registrar then set out the background of the matter in terms of the decision by Maidment J and the grant of the stay in the Full Bench of the Industrial Relations Commission. It was put to the Deputy Registrar, and he acknowledged the fact, that in the substantive matter in this Court the question that the claimants wished to argue was whether the Full Bench had failed to exercise a discretion which it was obliged to exercise. 13 Mr Coleman, in the course of his submissions for the claimants, took exception to the way in which the Deputy Registrar made mention of this when he said the question was whether the Full Bench had exercised a discretion or not, but for present purposes, I do not think this is a matter of significance. 14 The Deputy Registrar went on to say: "[I]t appears to me that this argument [that is to say the argument about discretion] can be neatly reversed. Any application to the Court of Appeal seeking prerogative relief against the Full Bench of the Industrial Relations Commission must surely be classed as special circumstances."

The Deputy Registrar went on to say: "The residence or impecuniosity of any of the members of the Nutshack group was not contested before me." I would understand the Deputy Registrar by that expression to be referring to the claimants. The Deputy Registrar then said: "Therefore, I have decided that security for costs should be ordered because - · there has been the failure to comply with the orders of Maidment J, · the comity attaching to the finding of the Full Bench of the Industrial Relations Commission of New South Wales that the application for leave was an abuse of process, and · the prerogative relief sought in this Court can be described as a special circumstance."

15 In submissions put to this Court, it was said that the fact that the claimants were seeking prerogative relief in this Court could never be described in itself as a special circumstance. I have no doubt myself that by this reference the Deputy Registrar intended to indicate, particularly bearing in mind the privative section in the relevant Act, that an application for prerogative relief is a difficult application successfully to pursue in this Court. 16 For my own part, having heard what has been said by Mr Coleman in the course of his submissions, it seems to me that to say that in this Court this particular application would be a difficult one is no over statement. 17 Mr Coleman stressed in his submission that the fact that the claimants had failed to make payment in accordance with Maidment J's orders made them no different from any other party that came before the Court, whether or not a stay application had been made and granted or refused. However, in my opinion, it was clearly a factor properly to be taken into account that, in this case, the claimants had failed to comply with the orders of Maidment J, had failed to make any application to the Court for a stay of those orders, and indeed had conducted themselves in a way which the Full Court regarded as an abuse of process. I think it is in that sense that the Deputy Registrar was referring to the factor of comity. 18 It was accepted by Mr Coleman that, in concluding whether or not it is appropriate that security for costs be granted, it is appropriate for the Court to take into account factors other than those that are listed in Pt 53. To my mind, the particular matters to which the Deputy Registrar referred are powerful considerations indicating that this is an appropriate case in which an order such as that made by the Deputy Registrar should be made. 19 For my own part, and taking account of what the Deputy Registrar said about the nature of the ground for the substantive application to this Court, I would not differ from the reasons that the Deputy Registrar found appropriate to make the order that he did. I am not persuaded that there is any ground on the basis of which this Court should interfere to review that decision. Indeed, it seems to me that the opponents, who mounted the application for security for costs, were entirely justified in all the circumstances to which the Deputy Registrar referred to do so. 20 At the end of his argument, Mr Coleman raised a question about the amount of security that was ordered but nothing was advanced to this Court to suggest that it was excessive. Accordingly, in my opinion, the application for review should be dismissed with costs. 21 SPIGELMAN CJ: I agree. 22 PRIESTLEY JA: I also agree. 23 SPIGELMAN CJ: The order of the Court is the application is dismissed. (Counsel addressed as to costs.)

24 SPIGELMAN CJ: The order of the Court is as indicated by Sheller JA. The application is dismissed with costs. 25 In respect to the summons, the Court makes an order vacating today's date as the date of the hearing of the summons and orders the claimants to pay the opponents' costs thrown away by the vacation of the date.

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